HP’s BSkyB dispute ‘finally settled’ with £318m pay-out

Hewlett-Packard has ended its long-running dispute with BSkyB, agreeing to pay approximately £318 million in damages and legal costs following a ten-year legal wrangle.

The satellite broadcaster sued HP Enterprise Services, formerly EDS, after it failed to deliver a £50 million CRM system in 2000 within the expected timeframe. EDS was found to have misled its client over the time it would take to deploy the system.

When the final judgement in the case was given four months ago, HP was ordered to pay approximately £200 million to BSkyB, but this figure has since risen. "On 7 June 2010, EDS and BSkyB fully and finally settled the litigation between them and all related claims (including for damages, costs and interest) for a total amount of £318 million," BSkyB said in a statement this morning. "This amount includes the interim payments of £270 million that EDS has already made to Sky in February 2010."

BSkyB had been pursuing the substantially higher sum of £700 million in damages and legal costs, but some experts thought that optimistic. "Given that the liability cap [on the contract] was £30 million, I can’t imagine their losses were in the order of £700 million," Peter Brudenall, partner at technology law firm Hunton & Williams, told Information Age earlier this year. "I’m not sure how they arrived at that amount."

The case placed the spotlight on the claims made by vendors before contract terms are agreed. EDS was judged to have fraudulently misrepresented itself during verbal negotiations, thereby rendering void the £30 million liability limit.

HP confirmed in a statement that a settlement had been reached with the broadcaster and said that the issue is now "fully settled".

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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