TCS UK court case: Tata Consultancy Services and UK's Disclosure and Barring Service in court battle, to claim damages for project delay

London High Court will hear expert evidence in the three disciplines of IT, delay and forensic accountancy, in the case involving TCS and the Disclosure and Barring Service of the Home Office of the UK. (Photo via Wikimedia Commons)

In October 2012, Tata Consultancy Services (TCS) won a contract from the UK government to design, build and operate an IT system for the Disclosure and Barring Service (DBS). It was an eight-year contract worth £350 million for DBS, which operates a safeguarding service by providing criminal record checks and a "barring" service list to prevent people deemed unsuitable from working with children or vulnerable adults. A decade later, both parties are locked in a bitter dispute in the high court in London, in what has been described as the biggest IT trials in recent years.

TCS has made a claim for £125 million, while DBS has issued a counterclaim for £150 million. By UK standards, the amounts may not be really eye-watering, but the eight-week trial involving over 30 witnesses and a dispute that centres around a failed modernization project involving a UK public service body, raises the profile of the case.

The dispute

TCS claims its attempts to progress and go live with the modernized systems were frustrated by DBS at every stage. The court was told that DBS through mismanagement of its IT hosting provider and by its decision to abandon part of the modernization hindered the project. The agreement expired in March 2020, and TCS’s main claim is for the increased costs it had to incur due to delays to the project.

DBS denies these claims and instead puts the blame for the delay on TCS, saying that the IT major was unable to deliver on time or “in relation to part of the system, at all within the term of the agreement.” It also characterized part of the system that was delivered by TCS in September 2017 as suffering from “serious defects.” DBS says it is entitled to substantial sums from TCS due to the delay, and non-compliance of the delivered system with contractual standards.

However, TCS claims that DBS’s criticisms of the software are “difficult to reconcile with the fact that the bulk of it is still in daily use by DBS.” In court filing, the company maintains: “It is difficult to resist the conclusion that the primary function of DBS’s counterclaim is to match and then over-top TCS’s claim.” On the other hand, DBS counters TCS’s delay claim by saying that the latter relies on conduct of a third-party supplier which does not amount to breaches of agreement by DBS. They say that the critical delay was caused as the software was “not ready to be deployed due to problems with development and testing.”

Broadly speaking, the court will hear expert evidence in three disciplines of IT, delay and forensic accountancy. Simon Croall, Andrew Carruth and Will Mitchell instructed by Bristows partner Anna Cook appear from DBS, while Stephen Kogley, Matthew Lavy and Ian Munro instructed by Joby Davies and Rachel Ziegler from BCLP represent TCS.

As both the sides continue their arguments, Justice Adam Constable’s court at any given time is packed by over 20 members comprising legal teams representing both the parties.

The contract

In 2012, when TCS got this contract, it became the first exception to the UK government policy of not awarding any public sector contract greater than £100 million to one single party unless in exceptional circumstances. TCS beat UK-based Capita which had managed the Criminal Records Bureau disclosure service, DBS’s predecessor, for 10 years.

In 2018, the UK National Audit Office came out with a report which stated that the updated service has not delivered the savings the Home Office originally intended. The report stated: “Modernisation of DBS is currently running over three and a half years late. The first stage was originally due by March 2014 but was only delivered in September 2017.”

The House of Commons Public Accounts Committee (PAC) criticized the Home Office for failing to effectively manage the DBS modernization program terming it a “masterclass in incompetence” in May 2018. The influential PAC also noted: “The DBS modernisation programme is another example of a Home Office project marred by poor planning and contracting delays, spiralling costs, and a failure to understand what service users want.”

The PAC spoke to various stakeholders and its report mentioned that both the Home Office and TCS accepted that the contract for modernization was signed in 2012 without “anyone having a clear understanding of what it would take to make the programme successful.”

The contract thus came under intense media glare and public scrutiny and gives the background for the keenly fought legal battle.

What the parties want

The thrust of TCS’s argument is that DBS is completely responsible for the delay for which it must be compensated. TCS is pleading that DBS is seeking extravagant sums, whereas the latter’s counterclaim should in reality fail. DBS has invited the court to dismiss TCS’s claim and instead award them damages and various other payments which they say are rightly due to them.

The trial continues and a judgment by Justice Adam Constable is most likely expected in 2024.