Tata Consultancy Services Limited v Disclosure and Barring Service

A judge may correct an internal error in a judgment at any time before the order is sealed, where doing so serves justice and no party has detrimentally relied on the decision. A very late amendment after trial requires a strong justification and a careful balance between the applicant’s prejudice, finality, and prejudice to the other party. A contractual procedure providing that disputed invoice amounts need not be paid may mean that no qualifying debt exists for statutory interest purposes. Alternatively, such a contractual variation may remain a substantial remedy where it preserves deterrence against non-payment of sums due on any view. Costs remain discretionary, and a net-payee may recover only a reduced proportion where its success was modest and unrelated to most of the costs incurred.

This was a consequential judgment following the substantive decision in [2024] EWHC 1185 (TCC), concerning extensive contractual claims and counterclaims arising from an IT infrastructure project. The court corrected the damages calculation for delay, refused TCS permission to amend its pleadings to claim statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998, permitted an amendment concerning VAT, determined pre-judgment interest on the parties’ respective recoveries, made a costs order, and refused DBS permission to appeal.

The central issues were whether the judgment could be corrected before sealing, whether the late amendment should be allowed, whether disputed invoice sums constituted qualifying debts, whether the contractual interest regime was valid, and what consequential orders were just.

1. Correction. The order had not been sealed. Applying In re L & anr (Children), the court had jurisdiction to correct the internal inconsistency concerning delay damages. The correction was just because there was no detrimental reliance. A substantive error was distinct from a disagreement requiring an appeal.
2. Late amendment. The application to plead statutory interest was made two months after judgment and two weeks before the consequentials hearing. Applying the principles in Quah Su-Ling, Nesbit Law Group and CIP Properties, the application was very late, lacked a good explanation, and would create factual and procedural prejudice. Permission was refused.
3. Qualifying debt. Under Clause 3.3 of Schedule 2-4, DBS was obliged to pay only the undisputed part of a disputed invoice. The disputed part created no contractual obligation to pay and therefore no qualifying debt under section 3 of the Late Payment of Commercial Debts (Interest) Act 1998. The question whether an invoice was genuinely disputed was factual, but the available evidence indicated that the relevant sums were disputed.
4. Substantial remedy. Alternatively, Clause 16.3 validly varied the statutory regime. Under sections 8 and 9 of the 1998 Act, a remedy is presumed substantial unless it is insufficient both to compensate or deter late payment and unfair or unreasonable to permit. The contractual regime retained an important deterrent against non-payment of sums due on any view. The distinction between genuine disputes and casual or feckless non-payment was relevant, and the remedy remained fair and reasonable.
5. Interest. An overclaim does not prevent a demand from giving notice under section 4, as explained in Ruttle Plant Hire. However, no statutory interest was recoverable here. Interest under section 35A of the Senior Courts Act 1981 was refused on disputed invoices. The appropriate rate for recoverable pre-judgment interest was 2% over base, but TCS’s entitlement accrued only after the £4,559,439 set-off in DBS’s favour had been exhausted.
6. Other consequential orders. The VAT amendment was allowed because it caused no conceivable prejudice. TCS was the successful net-payee but had achieved only modest success on the issues generating most of the costs. It was therefore awarded 20% of its costs on the standard basis, with an interim payment of £2 million. Permission to appeal was refused because neither proposed appeal had a real prospect of success under CPR 52.6(1)(a).

First-instance consequential judgment following the substantive judgment in [2024] EWHC 1185 (TCC). Permission to appeal was refused.