2.34 On 1 August 2001 responsibility for the Department's supervision of Magistrates' Courts was transferred from its Policy Group to its Court Service Agency. The move, designed to provide a more coherent administration of separate court jurisdictions prior to their potential merger, also transferred senior client management of the Libra project to a new team. This team faced a very difficult situation when it took stock in August 2001. The Department's perceived alternatives at this point were to accede to the proposed repudiation of the contract or to enter into the proposed phases of re-negotiation. The team took the following factors into account. The Libra application roll-out timetable had not been achieved, although there was some promise demonstrated in trials of the software. ICL was asking for an immediate commitment to £30 million and about £200 million extra in total over the lifetime of the contract (which was the projected scale of its loss). ICL was also threatening to repudiate the contract. Senior managers from ICL made it clear to the Department that deadlines were being dictated by their parent company, Fujitsu in Japan. On the one hand, the Department could have terminated the contract. But its legal advice was that ICL would counter claim. And termination would have involved severe disruption to service delivery with the probability of long and contentious litigation for little apparent gain even if successful. Moreover, the Department at that stage had no developed contingency plan. It had no intention of meeting ICL's demands as it believed that any additional payments would not be for future additional value.
2.35 The Department needed time to evaluate all the possibilities. It needed to assess ICL's proposition fully as the emerging view of the Libra application built to date showed some potential to meet the requirements. At this time ICL had reinforced its technical input to the development of the core application, and user representatives had been impressed by the on-screen developments they saw. The Department thought that despite successive failures to meet cost and time objectives to date, the potential prize was worth accepting some further risk and cost over a strictly defined period. At the same time the Department judged that it needed time to prepare contingency plans; to develop relationships between the new teams on both its and ICL's side; to build confidence about any proposed way forward among the user community, which had naturally been disappointed by failure to deliver hitherto; and to prepare for litigation if necessary; thus allowing a final decision to be based on the complete facts.