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2322. I now summarise some of the main findings and conclusions arising from this judgment.

2323. In relation to construction of the Entire Agreement clause at Clause 1.3.1 of the Prime Contract, this clause does not preclude SSSL from advancing a claim for negligent misrepresentation or misstatement against EDSL.

2324. Except for claims in deceit, Clause 20.2(ii) of the Prime Contract has the effect of excluding EDSL’s liability to SSSL for Call Rate Reduction benefits.

2325. Paragraph 17 of the Letter of Agreement is an exclusion clause for claims for breach of the Prime Contract between EDSL and SSSL but is not an exclusion of “All known claims and all unknown claims” (in the latter case up to 17 June 2001) which SSSL could advance against EDSL on the basis of breach of contract as EDS contend.

2326. In relation to the Memorandum of Understanding, there was no separate binding agreement made by Richard Freudenstein and Steve Leonard on 6 March 2002.

2327. The Memorandum of Understanding signed on 26 March 2002 was not a legally binging agreement when it was signed. It was and was intended to be “subject to contract” and both parties envisaged a later contract which would govern the changed relationship between Sky and EDS dealing with the matters in the document. It is not possible to spell out any contractual relationship founded on conduct after 6 or 26 March 2002.

2328. As a result the Memorandum of Understanding does not give rise to any full and final settlement nor does it give rise to new warranty provisions.

2329. No duty of care should be imposed upon EDSC in favour of BSkyB or SSSL or upon EDSL in favour of BSkyB which circumvents or escapes the contractual exclusion or limitation of liability which the parties put in place between EDSL and SSSL. That contractual structure negatives such duties of care and no such duties arise in this case. Any liability of EDSL to SSSL arising under a duty of care will not permit SSSL to circumvent or escape the contractual exclusion or limitation of liability provisions for the act or omission that constitutes the tort.

2331. As to the alleged misrepresentations as to time prior to the selection of EDS and the Letter of Intent, EDS represented that they had carried out a proper analysis of the amount of elapsed time needed to complete the initial delivery and go-live of the contact centre and that they held the opinion that, and had reasonable grounds for holding the opinion that they could and would deliver the project within the timescales referred to in the Response. That representation was false as there was no “proper analysis” nor were there “reasonable grounds”. It was made dishonestly by Joe Galloway who knew it to be false. In making the misrepresentation, EDS intended Sky to rely on it and to select EDS for the Sky CRM Project and Sky did so.

Accordingly, EDS are liable to Sky in deceit for that misrepresentation.

2332. As to the alleged misrepresentations as to cost prior to the selection of EDS and the Letter of Intent, EDS represented that they had carried out a proper estimate of the cost of completing the project and that they held the opinion that, and had reasonable grounds for holding the opinion that, they could and would deliver the project within that budget in the Response. In putting in an estimate of some £54m in the EDS Response, EDS carried out a proper estimate of the cost of completing the project and had reasonable grounds for holding the opinion that they could and would deliver the project within that budget in the Response. Accordingly, EDS are not liable to Sky for misrepresentation in relation to cost.

2333. EDS has no liability in misrepresentation for the Proven Technology Representation or the Significant Risk Representation or the alleged misrepresentation as to methodologies.

2334. Accordingly, I find that EDS made fraudulent representations as to time both prior to the selection of EDS and the Letter of Intent but otherwise Sky’s other allegations of misrepresentation fail.

2335. As to the alleged misrepresentations made prior to the Prime Contract, EDS represented that they had carried out a proper analysis of the amount of elapsed time needed to complete the initial delivery and go-live of the contact centre and that they held the opinion that, and had reasonable grounds for holding the opinion that they could and would deliver the project within the timescales referred to in the Response. That representation was false as there was no “proper analysis” nor were there “reasonable grounds”. It was made dishonestly by Joe Galloway who knew it to be false. In making the misrepresentation EDS intended Sky to rely on it and to select EDS for the Sky CRM Project and Sky did so. Accordingly, EDS are liable to Sky in deceit for that misrepresentation.

EDS did not carry out a proper analysis and re-planning exercise to produce a programme which would have been achievable and the representation was false and was made negligently. The misrepresentation was a material misrepresentation which EDS intended Sky to rely upon and which Sky did rely upon in entering into the Letter of Agreement. EDSL are therefore liable to SSSL for negligent misstatement and under section 2(1) of the Misrepresentation Act 1967. Otherwise, EDS is not liable for any other misrepresentation prior to the Letter of Agreement.

2337. The misrepresentations which were made prior to the selection of EDS and the Letter of Intent and also prior to the Prime Contract were only made on behalf of EDSL and not on behalf of EDSC but were made to both BSkyB and SSSL.

2338. EDSL has no liability to BSkyB for the neglegent misrepresentations made prior to the Letter of Intent, the Prime Contract or the Letter of Agreement.

2339. In relation to breach of the Prime Contract, EDS failed properly to resource the project after the Letter of Agreement; EDS were seriously in delay in carrying out the work and achieving the Milestones and delivering the Deliverables and EDS had carried out little work in the period mainly because they had failed to capture the requirements or manage that process or merely because of the general lack of progress. On that basis EDS failed to exercise reasonable skill and care or conform to good industry practice because there was no effective programme management, the design and development of the solution was not properly documented and EDS did not provide sufficient technical or managerial resources.

2340. However, neither the breaches alone nor the combination of breaches amounted to a repudiatory breach of the Prime Contract, as varied. Further, the evidence does not establish that there was an acceptance of any repudiation.

2341. In terms of causation, if EDS had not made the misrepresentations to Sky prior to the selection of EDS and the Letter of Intent, Sky would not have continued with EDS but would have engaged PwC to implement the PwC CRM System using Siebel. Sky are entitled to recover losses caused by entering into the Prime Contract on the basis of either the misrepresentations made prior to selection and the Letter of Intent or prior to the Prime Contract. PwC would have implemented the PwC CRM System with a total effort of 2794 man-months and would have achieved go-live on 1February 2003.

2342. If EDS had not made the misrepresentations to Sky prior to the Letter of Agreement, Sky would not have continued with EDS but would have engaged an Alternative Systems Integrator to continue with the CRM project and implement the ASI CRM System. An ASI would have implemented the ASI CRM System with a total effort of 4,749 man-months and would have achieved go-live on 1 February 2005. EDS are also liable for damages which represent damage for breach of the Prime Contract prior to July 2001 and I find that damages should be awarded on the basis that the wasted costs, being effort expended less useful work, are £16.3 million.

2343. Sky are entitled to damages for breach of the Prime Contract as varied by the Letter of Agreement which should be based on the costs of the effort incurred by Sky after 6 March 2002 in reaching the stage of development that EDS would have reached if they had expended the effort they had charged for in performing their obligations in accordance with their obligations under the Prime Contract as amended. On that basis the Quantum experts have agreed that the figure is £52.8m including the value of the unpaid EDS invoices or £48.8m excluding those invoices, the sum recoverable being subject to the cap under clause 20 of the Prime Contract.

2344. In terms of EDS’ contentions on mitigation, Sky did not fail to mitigate their loss by acting unreasonably in implementing the Actual CRM System or by de-scoping or by failing to introduce Self Service functionality at an earlier date.

2345. In terms of lost business benefits, the lost benefits in relation to reduction of churn rate should be assessed on the basis that the saved in practice percentages for customers who cancel (Cuscanners) should be:

(1) Home Moving: Change in Lifestyle (Home Moving): 8.1%;

(2) Value for Money: Subscription Fee Issues: 6%; Change in Financial Situation: 3%; Technical Issues (Part):10.2%; Poor Perception of Value: 9% and Contractual Account Issues (Part): 15%;

(3) Customer Service: Service Issues: 19.2% and Technical Issues (Part): 17.7%

2346. The lost benefits in relation to reduction of churn rate should be assessed on the basis that the saved in practice percentages for customers who are cancelled by the System (Syscanners) is 1.8%.

2347. In relation to the lost business benefits to be derived by a reduction in call rate (1) The benefits to be derived from Self Service by migration of calls to Self- Service should be based on 15% of Customer Service calls over some two years and on 45% of Sales Upgrade calls and 23.3% of Technical Enquiry calls being transferred to Self Service by 2011. (2) The benefits to be derived from call avoidance by root cause analysis of technical enquiries by the Actual CRM System, should be based on Simon Roncoroni’s figure of a 5% reduction in Technical Enquiry calls. (3) The benefits to be derived from an increase in First Time Resolution, should be based on a table similar to that in Simon Roncoroni’s first report at paragraph 8.40 but with figures of 95 (2000/1); 60 (2001/2); 50 (2002/3); 11 (2003/4) and 25 (2004/5) and should adopt the approach of Simon Roncoroni as to the two year period, the 60% and 40% and his approach to the B1 and B2 Scenarios.