BSkyB has asked a high court judge to order a £49 million payment from HP, so that it can recover its full legal costs in the parties’ ten-year dispute.
The amount, if awarded in full alongside a £3 million additional tax payment it is seeking, would take BSkyB’s total court takings so far to £322 million. That amount is equivalent to nearly half a billion US dollars, and worth over a third of HP’s entire global IT services profits for the three months to 31 January.
Notably, the £49 million legal costs alone are £1 million more than the value of the original contract under dispute. The £48 million deal, judged to have been won by EDS through “deceit”, was to deliver a customer relationship management system to help BSkyB process viewers’ calls as well as retain customers by offering them new entertainment packages.
The parties began to fall out in the early 2000s, but the situation has become HP’s problem since it acquired EDS in 2008, during the trial. EDS is understood to have spent an amount approaching that spent by BSkyB on legal costs, as well as tens of millions of pounds attempting to deliver the system.
HP has insisted EDS did “nothing” to deceive BSkyB, and plans to appeal the judgement. While EDS was found to have fraudulently exaggerated the speed with which it could deliver the system, the judge decided it had not knowingly deceived BSkyB on resources, cost, technology, or methodology.
HP is strongly contesting the request for it to pay BSkyB’s £49 million legal costs, asking the judge for a 38 percent reduction, equivalent to £19 million. It says that following BSkyB’s loss on four counts it would be “unreasonable” for HP to have to pay the broadcaster for its costs pursuing those arguments.
Alan Gourgey QC, barrister for HP, said that BSkyB lawyers were “seeking to underplay the effort they made on issues they lost”, adding that it was “simply not correct” that the broadcaster needed to have spent so much time and money investigating the issues it ultimately lost.
BSkyB, however, contends that all of its claims were “intertwined”, and that it could not have effectively pursued the time argument, which it won, without investigating EDS’ promises including what it said its available resources were.
The broadcaster is seeking an indemnity costs order, as part of its efforts to ensure it recovers its entire £49 million outlay on the case, an order that is frequently seen in legal and financial terms as penal. It also argued that EDS was wrong to have relied heavily on evidence from the head of its customer software division, who was found to have lied in court. HP accepts that the EDS customer software head lied about his qualifications, but says he told the truth about BSkyB.
Mark Howard QC, barrister for BSkyB, told the judge that BSkyB had been “drawn into the most time consuming, extraordinary litigation”. He also claimed that during the discovery EDS “dumped” on BSkyB’s lawyers “all manner of documents, with no consideration as to their usefulness”. HP contends it acted reasonably.