Dispute between a Major Retailer and Software House

Jane LambertJane Lambert

21 July 2010

A major national retailer that was already a household name had commissioned bespoke applications to manage the distribution of merchandise to its sales outlets around the UK. There were major faults with the system and the retailer withheld part of the payment. The retailer brought proceedings in the Royal Courts of Justice against a company that was part of the group but not the actual company that had commissioned the software. I was instructed to settle a defence and counterclaim.

I spent a whole afternoon at the warehouse touring the installation and inspecting the system. I also had extensive discussions with the company’s managing director, head of distribution and systems manager.

My defence to the London proceedings was that the claimant had sued the wrong company. Nevertheless, as the defendant had lost profits and incurred expense as a result of the faulty software, I counterclaimed for damages for negligent misstatement and misrepresentation. I also settled proceedings for a claim by the company that had commissioned the software for damages for breach of contract in the Technology and Construction Court in Salford. Finally, I applied for the transfer of the Queen’s Bench proceedings to the Technology and  Construction Court in Salford with a view to consolidation of the actions or for the cases to be heard together.

Negotiations began between the parties shortly afterwards and I learned that they had been concluded on terms  favourable to my client. Although the court proceedings are in the public domain, the settlement was confidential. For that reason, the names of the parties to the two actions are not disclosed.