Government contractual disputes prove costly - Palmers Solicitors

Government contractual disputes prove costly

A body that represents alternative dispute resolution professionals has highlighted the high financial cost to the government of legal battles with technology suppliers.

In July, a range of media reported that taxpayers could end up footing a bill estimated at bill up to £700 million after the government was said to have lost a legal battle with Fujitsu over a failed NHS IT system.

The parties to the case did not comment but the BBC reported on its website on 17 July: “The case was heard in secret but the arbitrator is thought to have found in favour of the Japanese IT giant.”

On 18 August, the BBC reported that a binding arbitration tribunal had ordered the Home Office to pay £224 million to a US corporation Raytheon, after the company was sacked for failing to deliver the e-Borders programme to improve border controls. The figure included £50 million in damages for ending the contract,

The Chartered Institute of Arbitrators (CIArb), a membership organisation representing the interests of alternative dispute resolution practitioners worldwide, commented on its website on 21 August: “Both cases have become a topic of much debate given the gravity of the impact on UK taxpayers.

“The Chartered Institute of Arbitrators suggests that greater steps should be taken by the government to effectively manage contractual relationships with suppliers.

“One way of minimising costly disputes in future could be through the use of Dispute Boards (DB). As DBs exist throughout the duration of the contract, this can be a useful method of determining a disagreement that may arise before the completion of the contractual arrangement. More should be done by government and industry to emphasise the benefits of using an impartial intermediary, such as a standing DB, in dispute avoidance.”

Commercial disputes can prove costly and time-consuming for the businesses involved.

Palmers’ Courts and Dispute Resolution team can advise on a wide range of disputes, from internal partnership and shareholder disputes to disagreements over breach of contract and those affecting construction or property projects.

Alongside our litigation expertise, we are experienced in mediation and other alternative dispute resolution (ADR) procedures – which can offer a wider range of options for resolving a dispute than those available in the courts – and our consultant Luke Morgan is a member of CIArb. For more information, please contact Luke Morgan.