Herbies wins payout for BSkyB in long-running EDS dispute

Herbert Smith has secured a £318m payout for client British Sky Broadcasting, which was in dispute with Electronic Data Systems (EDS).

The broadcaster had been in dispute with the IT supplier for the last seven years over a customer relationship management (CRM) system it installed for the broadcaster in 2000.

The original contract was worth £54m, but after EDS failed to fulfil the contract BSkyB instructed Herbert Smith to launch a £709m claim against EDS for misrepresentation.

DLA Piper partner Matthew Saunders instructed One Essex Court’s Mark Barnes QC (now retired) to defend the case for EDS.

The resulting trial took 110 court days to be heard and involved nine barristers, more than 500,000 documents and 70 witnesses and costs thought to exceed £70m.

In January Mr Justice Ramsey upheld just one of the five claims against EDS in a 468-page judgment revealing that Joe Galloway, who was head of EDS’s CRM Solutions when the contract was negotiated, had misled the claimant.

Under cross examination Galloway was forced to defend the origins of his MBA, which, said the opposing counsel, could be bought online.

Brick Court’s Mark Howard QC, who led for BSkyB, caused uproar in the court when he produced an identical MBA he purchased online for his miniature Schnauzer dog Lulu.

The judge said Galloway “had quite evidently obtained a fake degree from the Concordia College website”, despite the fact he maintained otherwise under cross examination.

EDS has agreed to an interim payment of £270m, but in total will pay out £318m.

Counsel:

BSkyB: Herbert Smith partner Ted Greeno instructed Brick Court’s  Mark Howard QC and 4 Pump Court’s Alex Charlton QC to lead Brick Court’s Alec Haydon and Fionn Pilbrow and 4 Pump Court’s Matthew Lavy.

Electronic Data Systems: DLA Piper partner Matthew Saunders instructed One Essex Court’s Mark Barnes QC (now retired), who led Alan Gourgey QC and Stephen Tudway of 11 Stone Buildings and One Essex Court’s Zoe O’Sullivan.