Let’s start with some stats. The judgment came in at just under 10 years after the original contract. The trial lasted for 110 days, involved 500,000 documents and 70 witnesses. The judgment is almost 500 pages and 2,500 paragraphs long. Legal fees are estimated at over £70 million to date, and set to rise further.
The dispute arose out of a £48m IT services contract between satellite broadcaster BSkyB and global IT contractor EDS (which is now part of HP). BSkyB had a catalogue of complaints – they ended up delivering the project themselves after all, but as well as the “run of the mill” contract claims BSkyB also alleged EDS lied in the pre-contract tendering process. They said 9 EDS employees lied about 5 different things.
EDS made a good fist of it. 8 of those employees were found to be honest (if not always possessing accurate memories) and the court found that no one at EDS lied about 4 of those issues.
But one was enough. One lying witness about one issue may have cost EDS upwards of £200m.
The lie was a simple, maybe even a common one - about being able to complete on time. But without it the court were convinced that BSkyB would have gone to PwC instead of EDS, and saved itself a lot of grief, and money, if it had. Every bid team in the land should be thinking hard about that.
And the worst part for EDS (well, HP now of course) is that the lie (as opposed to the contract claims) blew away the agreed liability cap of £30m. BSkyB were claiming £700m, but after the judgment seem to be reigning that in to closer to £200m. The final figure will be determined in February, when everybody has to return to court.
The judgment is a classic – not because it makes any new law – but because it reveals how dishonest people can dig bigger and bigger holes for themselves. EDS’s main witness lost all his credibility, his job, and the case when he claimed to have a real MBA from a real University. He went to the course for months, describing in detail about his regular plane rides and the college buildings, only to be shown not only that the college never existed, but that BSkyB’s lead barrister’s dog, Lulu managed to get the same “qualification” by applying online. Shame on EDS’s Mr Galloway when all was revealed, the final blow being that Lulu was awarded better marks than him.
HP is going to spend even more time and money on an appeal. And maybe a few pounds more on some employee background checks, just in case Lulu is looking for a job…