CSC told investors contract termination would cost NHS £430m

"The Company believes that the NHS contract is enforceable and that NHS has no existing right to terminate the contract."

This is the key sentence in the financial document National Programme for IT supplier CSC gave to Wall St and its investors last month which seems to be the basis for most of this week's sound and fury over the possibility the firm may be so well entrenched at the DoH it will make money no matter where any contract negotiations may end up.

And here's the key figure: if the NHS had torn up the contract at the end of September it would have then had to write a cheque to CSC in the amount of no less than "£430m".

CSC's lawyers would have gone over this document with an electron microscope to avoid any risk of further shareholder lawsuits from disgruntled sharholders, so it's worth seeing exactly what was stated.

The NHS has the right to terminate the contract for convenience, it says - but then the customer (as in, the UK taxpayer) "would owe significant termination fees to [us] and would be subject to claims by the Company as further described below.

That's the main basis CSC "believes" that the NHS, when considering its alternatives of maintaining the contract in existing or varied form or terminating the contract, "will consider costs and risks [it] may incur over and above those related to termination fees, damages and costs that may be payable to [us] and the associated legal processes, including the cost of initiating and managing a public tender procedure or procedures to obtain one or more suitable replacement suppliers, the operational risk of switching suppliers at this stage in the contract with the Company, the cost of alternative suppliers, and the cost of obtaining exit management services from the Company to ensure an orderly transition to one or more replacement suppliers".

Plus, if the NHS terminated the contract for convenience, possible claims that the Company has against NHS include "claims for compensation due to delays and excess costs caused by NHS or for contractual deployment delay remedies or for costs associated with change".

In the event of termination for convenience, the contract states that the total amount recoverable by the Company solely from termination fees payable by NHS is determined in accordance with a contractual formula. This formula includes a cap which varies by reference to the date of termination, but in any event decreases on a monthly basis with total elimination of termination fees by April 2015. 

"Based upon events to date, the Company does not anticipate that the NHS will terminate the contract."

If NHS wrongfully seeks to terminate the contract and refuses to withdraw its termination notice following the Company's demand, the Company could assert a claim for wrongful termination and seek damages for repudiatory breach of contract. Although the parties have not asserted claims formally in any arbitration or other legal proceeding, there can be no assurance that in any such proceeding NHS will not assert claims against the Company for damages in a material amount, says the document. 

"If the NHS wrongfully terminated the contract on the basis of alleged material breach by the Company, the Company believes that the Company's recovery for damages would be substantial."

In other words, if Connecting for Health was Shakespeare's Macbeth, it will say to itself that, "I am in blood/Stepp'd in so far, that, should I wade no more/Returning were as tedious as go o'er".