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IBM exec told that High Court evidence in Co-Op Insurance case wasn't 'truth, whole truth, and nothing but the truth'

Plus: Big Blue wanted to 'turn the screw in a controlled manner' on client

An IBM exec was accused of contradicting himself at the High Court in London as he testified over the failure of a £175m ($225m) Agile platform contract with Co-Operative Insurance.

Graham Perrott, Big Blue's general manager of cloud application innovation consulting, was accused of not giving evidence that was "the truth, the whole truth and nothing but the truth" – the courtroom equivalent of calling someone a liar.

The Co-Op's barrister, Alex Charlton QC, was taking Perrott through a series of internal emails from IBM dating back to 2016-17, asking detailed questions about the point where the multi-million-pound contract to build a new backend system for the Co-Op's insurance arm was repeatedly delayed and finally collapsed altogether.

IBM and its subcontractor had agreed to use Agile methodology for building and deploying the new platform, which would underpin the whole of the Co-Op's insurance business.

Scoffing at the IBM exec – head of Big Blue's Global Business Solutions unit at the time of the Co-Op project – as he answered one of these earlier questions, Charlton said: "That's hardly 'the truth, the whole truth and nothing but the truth', is it?" The barrister expanded on this, saying: "You also gave evidence a few moments ago about the team IG was telling you was responsible for the bulk of the delay, do you recall that?"

The IBMer had just testified that some of the causes of project delays were down to IG – the Innovation Group – IBM's subcontractor on the £175m contract. IG's software arm 1insurer was supposed to deliver a customised version of its US-specific insurance software platform for the Co-Op.

If Perrott was telling the High Court that some project delays were caused by IBM and its subcontractor, he had contradicted what IBM's own legal defence filings said had happened – and an alert Charlton had spotted that while cross-examining him.

Clad in a plain blue suit and burgundy tie, the IBM exec piped up as Charlton prepared to tear him apart in the witness box: "If I may – on the bulk of delay, that was at a moment in time... Early on in the project there were delays that were caused by [Co-Op Insurance] or even IBM. In a long-running programme, delay can happen and it sort of moves around."

Unruffled, Charlton read out a part of IBM's legal defence where the American company specifically blamed Co-Op for the delays. Perrott disagreed, saying: "This is specifically a milestone in IMP18C, the build standard. Well, I think the statement here, in red, goes on to say the claimant was responsible for creating user stories, the requirements of each sprint… I think what we're calling out here, and what I signed the truth of as presented, is that CISGIL did fail in its responsibilities."

CISGIL is the legal name for Co-Op Insurance: CIS General Insurance Ltd. CISGIL underwrites the Co-Op's retail insurance products and is the legal entity that brought the lawsuit against IBM.

You say aggregator, I say insurance comparison websites

Earlier Charlton had been questioning Perrott about what the court was told were "aggregators". These aggregators needed to be plumbed into the Co-Op's new platform that IBM was building.

Documents shown to the court revealed that at a late stage in the project and during user acceptance testing (UAT), aggregator site Go Compare still had "19 defects", while had been stuck in the system integration stage for four weeks as well as having "defects with UAT".

"To maintain a pragmatic and progressive approach to this programme CISGIL has agreed to enter with these defects remaining," said the document.

Another one shown to the court said there were "over 180 open defects" by 12 May 2017 "with an average fix rate of no more than 33 defects a week" – barely a month before a fed-up Co-Op pulled the plug on the whole contract.

These were not the only internal documents that Perrott was shown.

'Turn the screw in a controlled manner'

Charlton pulled up one of Perrott's own internal emails from 7 March 2017 on the court screens. The barrister then began reading it out, suggesting that IBM was engaging in a bad-faith attempt to reduce the agreed scope of work it would carry out. He later suggested this was so IBM could get part of the platform, codenamed Project Cobalt, deployed live and so trigger the revenue-generating "support" clauses in the project contract.

"Three," said Charlton, going through a numbered list of points from the email. "We will then have a call to discuss and agree where we would stop when we’ve built a bit of a plan where we can turn the screw in a controlled manner given their lack of cooperation."

Referring to the email's second point where Perrott had written that he wanted a list of scope-reducing things ranked so they "hurt them the most to the least", Charlton asked what the GBS chief had meant by that.

Perrott, who joined the IBM project team "four to six weeks" before sending that email, answered: "When I arrived, I – it became clear to me that the client was sitting back and not participating in the [scope-setting process]. They were not participating in any creative way of getting anything live. They would not move their position."

Poker-faced, Charlton put it to him that "the point which was at issue here was CISGIL’s insistence that IBM deliver in accordance with its contractual obligations. That’s right, isn't it?"

IBM's man shrugged slightly. "The point I'm making here is IBM should be clear about its contractual obligations. There was a gap between the two."

The Co-Op's barrister replied: "What you're doing here is putting pressure on CISGIL to – cooperate I think is the word in this email – in delivering less than that which had been contracted for. Do you accept that?"

Giving a little ground, Perrott said that when he took on the project, "I did not have clarity from my own team on the scope we were contracted to do and the scope we were asked to do on top. It was a bit of housekeeping to get clarity on scope such that we could have a conversation and change in behaviour."

According to the Co-Op's legal filings, seen by The Register, IBM entered the contract knowing that the insurer wanted a completely new platform to be live by "end Q3 2016." The project was eventually abandoned amid legal acrimony in June 2017.

The case continues. ®


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