Southwark London Borough Council v IBM UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 17 March 2011 |
| Neutral Citation | [2011] EWHC 549 (TCC) |
| Docket Number | Case No: HT-09-325 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 17 March 2011 |
[2011] EWHC 549 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: Mr Justice Akenhead
Case No: HT-09-325
Nicholas Stewart QC and Simon Perhar (instructed by the Legal Services Department of the London Borough of Southwark) for the Claimant
Jeremy Nicholson QC and Terence Bergin (instructed by Blake Lapthorn) for the Defendant
Hearing dates: 7–10, 14, 15 and 17 February 2011
Mr Justice Akenhead:
Introduction
These proceedings relate to the provision of software and associated consultancy services by IBM UK Ltd ("IBM") to the London Borough of Southwark ("Southwark") in 2006 and 2007. The software was to be provided in connection with the implementation of a Master Data Management ("MDM") system within Southwark which would rationalise a large amount of information historically and continuously logged on to a number of different computer systems within Southwark.
Southwark complains that the software provided and in particular what was called Arcindex, manufactured and marketed by a different company, Orchard, was unsatisfactory and otherwise unfit for purpose. Southwark's claim was put in a variety of ways ranging from misrepresentation, breach of a collateral warranty, negligence and breach of one of the three specific contracts entered into between the parties, although the first three of these grounds were expressly abandoned by Counsel for Southwark in closing. Having been provided in late 2006 and up to about June 2007, the software and services provided by IBM were abandoned by Southwark in the second half of 2007.
The Background
As a highly populated London borough, Southwark has and has had a large number of properties and people within the borough and contact between the borough and the people who live and work in it is through a number of points of contact. For instance, Council Tax payers and business rates payers have to be identified and billed. It is necessary to keep extensive records and most of these are kept on a number of disparate computerised systems, disparate in the sense that each of them deals with different subject matters. These included systems (sometimes called "source systems") for Customer Relationship Management ("CRM"), Strategic Services Application ("eReg"), National Non-Domestic Rates ("NNDR"), Local Land and Property Gazetteer ("LLPG"), Housing Maintenance Application ("iWorld") and Council Tax ("CTAX"). Unsurprisingly, over the years a mass of information has been computerised about people, property and businesses within the borough and, equally unsurprisingly, some people, businesses or property are entered by mistake more than once within the same source system; sometimes, there are discrepancies between the names, properties and other details in the different entries. Sometimes, records on one system record different information about the same person and property. These mistakes arise from many reasons, which include incorrect information provided or transposed.
The concept of MDM by way of a central computerised system has gathered in popularity and for some 10 years computer companies, such as IBM, have invested research and development of, and cost in acquiring, software and hardware to accommodate the aspirations of potential clients in this context. The main objective of MDM is to try to harmonise and improve data. As the concept has developed, the heart of MDM is a central index which in broad terms signposts all of the data within an organisation located within the different source systems; that central index provides, houses or procures a master data set which can be accessed to obtain consistent and accurate master data. At least in so far as MDM related to management of local authority data, MDM systems were in 2006, if not in their infancy in terms of development, at least in the relatively early stages of development. The market for MDM was described as being immature in 2006. Indeed, until IBM acquired the "Ascential" products from another organisation, it did not have a viable MDM capacity. In practice, it has been found by a number of the London boroughs which have introduced or tried to introduce MDM systems that they are complex. In the Best Practice Guide for MDM Implementations issued by DataConnects published in June 2008, the following was said:
"Time & Resources
Be under no illusion, projects of this nature take time, do not underestimate the number of resources and time required, estimate how long you think it will take and triple it and then double that. The perception by many is the matching of data and resources required should take one or two person[s] just a few weeks to sort out, this simply isn't true. Projects of this nature are complex, often due to the data quality issues they revealed, they often serve to highlight how poor current processes and practices are. It can be often likened to opening a can of worms that cannot be ignored once opened, revealing disasters waiting to happen.
Costs
Some LAs reported that additional costs were incurred due to:
• The immaturity of the matching product purchase, extra money, time and resource was required to develop software to cope with product deficiencies and test product enhancements
• Investment in operator skill set was far higher than anticipated
• A higher number of matches than anticipated that required manual resolution."
Southwark can be classified as one of the major London boroughs, having in 2006 to 2007 expenditure of more than £1.2 billion. It had a separate Information Technology Department, staffed by experienced IT managers and other professionals, some directly employed and others engaged as consultants. It outsourced a number of its IT operations to organisations such as Pearson (later Vangent) and Serco.
In about 2005, Southwark was considering the introduction of an MDM system. At this stage, a number of key personnel were involved in this project. David Currey, initially a programme manager for systems at Southwark, became the head of information services in December 2005. Mike Katz was an independent consultant who had been retained as a project manager since 2001. James Orrom was probably also an independent consultant with experience in IT matters. Initially, Southwark approached SAP (UK) Ltd which was part of a German group and Southwark with SAP which drew up a document entitled "SAP Master Data Management Phase 1 Project Brief" ("The SAP Brief"), the version in the trial papers being dated 13 March 2006. This was a high level and non-detailed document and is written in a language in part at least familiar to those involved in this type of project:
"1 Overview
Master Data Management refers to key reference information about customers, products, vendors, employees, organisational units, accounts, etc.
Master Data Management is about bringing the multiple variances of the key data elements into a single harmonised data set so that everyone has the same view of the world. Once harmonised this key data is needed by an organisation at an operational level and from a leadership perspective. It allows consistent answers to management questions…
The council had recently implemented a Customer Service Centre in partnership with Pearson eGovernment Solution which is supported by a SAP Customer Relationship Management (CRM) System. The CRM system holds data on the Council's customers and properties. Each back office department within the Council also holds the same customer and property data multiple times in differing formats and differing states of completeness/accuracy in the many IT systems that support the delivery of services across the organisation.
The Problem:
• Data on a single customer/property is held multiple times in the same system.
• Data on a single customer/property is maintained in multiple systems in multiple formats.
• Data on a single customer/property is going to be held in varying degrees of accuracy and consistency.
• The Council needs to understand the relationship that a customer has with the property in order to improve service delivery.
• It is not possible to deliver truly joined up service delivery if each of the departments/services are using different instances of the Master Customer.
The Solution:
• Bring the multiple customer/property data sets together, using MDM cleanse and match each data into two distinct Master Data sets the customers, property and establish a relationship/link between them….
2.1 Project Objectives
The purpose of this document is to define the scope Phase 1 of this project so that a total fixed price can be calculated enabling LBS to make a checkpoint Go/go decision for this project. The project will decide whether to proceed on the merits on the benefit is realised in Phase 1 alone, therefore the deliverables in Phase 1 must be achievable and provide sufficient business benefit.
Project Objectives:
To obtain a complete master data set for customers and properties within Southwark.
To provide a system for maintaining (and where required establishing) the relationships between customers and properties. To realise operational efficiencies in the maintenance of Master Data.
To provide the infrastructure for ID Management/Authentication for customer self-service through Government Connect.
To provide the capability for a 360 degree view of the customer within the Data Warehouse.
3. Project Scope
3.1 …It it should be understood that the scope of this project is to build the basis for developing a consistent master data set for the entire organisation. It should not be assumed that this initial project would encompass all the business process changes required. This project will not be implemented in a...
To continue reading
Request your trial
-
Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc.
...been reached on the express term of the contract, it should be afforded significant weight. 82 That case was referred to in London Borough of Southward v IBM UK Ltd [2011] EWHC 549 (TCC). That was another case in which software supplied to a local authority was said to be unsatisfactory an......
- Walter Lilly & Company Ltd v Mackay and another (No 2)
-
Software Incubator Ltd v Computer Associates UK Ltd
...made the obvious point that software was not in the minds of the legislators at the time of the original Sale of Goods Act 1898. 53 In Southwark v IBM [2011] EWHC 549, Akenhead J held that the supply of software pursuant to a perpetual licence with copyright being retained by the licensor c......
-
Epsom College (A Private Company Ltd by Guarantee) v Pierse Contracting Southern Ltd ((in Liquidation), Formerly Biseley Construction Ltd)
...have been awarded from a certain date in special circumstances where an offer which ought to have been accepted was not: see Southwark LBC v. IBM UK Ltd (Costs) [2011] EWHC 653 (TCC), [2011] NLJ 474 (Akenhead J) and Barr v. Biffa Waste Services Ltd (Costs) [2011] EWHC 1107 (TCC), [2011] 13......
-
Case Law Update - October 2011
...CONTRACT AND PROCUREMENT LAW Terms as to fitness for purpose and quality not implied Southwark London Borough Council v IBM UK Ltd [2011] 135 Con LR 136 TCC In a contract for the supply of software and IT services, the court refused to imply terms as to fitness for purpose and satisfactory ......
-
Software Was Fit For Purpose
...Borough of Southwark v IBM UK Limited [2011] EWHC 549 (TCC) The London Borough of Southwark was looking for a "master data management" system which was to act as a central index of data used by Southwark's different computer systems. The idea was to prevent duplication and wrong entry of da......
-
Contract terms
...Ltd [1969] 2 AC 31 at 123, per Lord Wilberforce. 501 Which could include computer software: London Borough of Southwark v IBM UK Ltd [2011] EWHC 549 (TCC) at [95]–[97], per Akenhead J. 502 See Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd [2013] 2 Qd R 1 at [2], per......
-
Table of cases
...of Newham v Taylor Woodrow-anglian Ltd (1981) 19 BLr 99 II.10.66, II.13.58, III.18.56 London Borough of Southwark v IBM UK Ltd [2011] EWhC 549 (TCC) I.3.122 London Borough of Southwark v Transport for London [2018] UKSC 63 II.8.63 London Central & Suburban Developments Ltd v Banger [1999] a......