Accenture loses latest round of IT dispute with Centrica

The High Court has issued a new judgment against Accenture over its dispute with Centrica, the largest supplier of gas and electricity to homes in the UK....

The High Court has issued a new judgment against Accenture over its dispute with Centrica, the largest supplier of gas and electricity to homes in the UK.

The judgment means that Accenture has lost its arguments on nine out of the 10 contractual points that were in contention during pre-trial hearings.

Centrica is claiming about £183m from Accenture over a billing system it says was fundamentally flawed, which Accenture denies.

Had Accenture won, it could have weakened Centrica's case against the supplier - and potentially stopped a full trial from taking place. But Mr Justice Field found in favour of Centrica on nine out the 10 contractual points in dispute.

Accenture says it will lodge an appeal in the next two weeks.

Centrica's main claim is that Accenture delivered a fundamentally flawed system to manage the accounts of more than 16 million customers of gas and electricity.

Accenture denies its system was fundamentally flawed and contends that Centrica accepted and used the system for two years before making a warranty claim. It says the system was delivered on time and to budget, and that the problems were of Centrica's own making.

There were five days of preliminary hearings in the High Court in June and July 2009. Mr Justice Field has since issued two judgments, both of which went against Accenture.

He found that Centrica:

  • Can aggregate individual breaches of warranty into a single fundamental breach of warranty for the purposes of its claim. Accenture had argued that none of the individual breaches was serious enough to cause a fundamental breach. The judge said: "I can see nothing in the agreement that prevents Centrica from asserting that a breach is a Fundamental Defect when to begin with they thought that the effects of the breach did not justify such an assertion."
  • Did not have to prove that a fundamental breach of warranty had caused a severe adverse effect at the time it notified Accenture of the breach. Centrica had only to prove that the breach would have caused a severe adverse effect if left unremedied.
  • Can claim damages for the costs of fixing the problems, and also for the direct losses caused by any fundamental defect, and damages for the problems before Accenture was told of any defect.
  • Can claim other losses, such as compensation to customers.
  • Can claim for hardware. Centrica says it bought millions of pounds of extra hardware to remedy the slowness of the system.

A full trial is expected to take place in early 2011.

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