BSkyB Wins £200 Million HP Liability Case

A little present of sorts for BSkyB as the broadcaster gears up to report its earnings later this week: the UK High Court has ruled in favor of the company against EDS, saying that the systems integrator had lied about its expertise in an outsourcing deal. EDS, which is now part of Hewlett-Packard, is liable for at least £200 million ($323 million) in the landmark case.

The suit highlights some of the major hiccups that a broadcaster can go through in the transition to trying to offer more services. The whole thing goes back a decade, when BSkyB says it awarded EDS a contract worth £48 million ($77 million) in 2000 to design, build and implement an “advanced” customer-relationship system for BSkyB’s operations in Scotland.

The project overran budget and faced numerous delays and problems. Eventually BSkyB (NYSE: BSY), part-owned by News Corp. (NYSE: NWS), ditched EDS in 2002. By March 2006 it finished the work itself at a cost of £265 million ($428 million)…

This is the first such ruling in a UK court, assigning liability in an outsourcing case, and sets a precedent for any future cases of its kind.

But it’s not the only controversy that EDS faced in the years leading up to its eventual purchase by HP. Among them, the company was dropped by the NHS after failing to deliver on a £90 million contract to overhaul the health service’s directory and email services in 2004. That deal was settled without going to court, though.

BSkyB claims that EDS mislead the broadcaster about its capabilities and had sued the company for £709 million, plus court costs. The judge has yet to make a decision on the final award amount. HP says it will appeal the decision, writes ComputerWorld.