Southwark Council Loses Legal Fight Against IBM Over Computer Equipment

Southwark Council has been unsuccessful in its bid to claim £2.5 million in damage from computer company IBM after claiming the firm supplied it with faulty software.

The council bought the software from IBM in 2007 as part of a framework agreement between the firm and the Treasury.

The council claimed that the software supplied was not fit for purpose and subsequently sued IBM for negligence, breach of contract and misrepresentation, later narrowing down the accusation to state that the system supplied to it failed to restrict user access or de-dupe data properly. It was presumed at the time that IBM had extensive professional indemnity insurance for claims of this kind should it have lost the case.

However, a judge has now ruled that Southwark Council did not specify its requirements for the software, leaving IBM to decide. The council also failed to produce any of the six people named as witnesses in earlier proceedings.

Having lost the case and as it had previously refused a settlement when offered, the council will now have to cover IBM’s legal costs. It is not known what, if any, professional insurance the council has to prevent these costs hitting front-line service budgets.

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