We've all been concentrating on the Sky v EDS case (on which there was a useful seminar from SCL and Intellect this week), but there was another recent judgment on direct loss and exclusion of liability, in a dispute over the supply and maintenance of an IT system.
In GB Gas Holdings v Accenture, Accenture was contracted to design, supply, install and maintain a new IT system for Centrica, which included an automated billing system. The billing system was the third of five software releases required to deliver the system. There were substantial delays to its release and, after finally switching millions of customers over to the new billing system, Centrica experienced significant problems with functionality and performance.
The parties failed to resolve the various issues and Centrica issued proceedings against Accenture for breach of warranties. Accenture sought to rely on the limitation of liability clause in the contract which excluded liability for indirect or consequential loss and loss of profits, business or revenues.
The Court found that Centrica could claim the following as direct losses:
- around £18.7m paid by Centrica to gas distributors based on incorrect data of customers' gas consumption provided by the IT system;
- £8m for compensation paid to Centrica's customers for the poor service and billing problems;
- £2m for additional borrowing charges incurred to finance the business due to late billing or non-billing;
- around £400,000 for the cost of chasing customer debts which were not actually due; and
- additional stationery and correspondence costs of around £100,000 required to keep customers up to date on fixing the issues.
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