Quantum judgment in HP/Autonomy fraud trial

31/07/25

In 2011, Hewlett-Packard announced the acquisition of Autonomy for US $11 billion. In 2015, the HP group filed claims in the High Court against Autonomy’s CEO, Dr Mike Lynch, and CFO, Sushovan Hussain, alleging that they had fraudulently inflated Autonomy’s true financial performance both in its published results and directly to HP.

The original trial ran from March 2019 to January 2020. While it covered both liability and quantum, Hildyard J’s eventual judgment – which was handed down in May 2022 and ran to over 800,000 words – addressed liability only. The Judge found that the Claimants had substantially succeeded in their claims (news item; [2022] EWHC 1178 (Ch) part A, part B, Schedule, but concluded that he required further assistance on a number of issues in order to assess damages. In July 2023 he directed a further hearing for that purpose: [2023] EWHC 1847 (Ch).

At that hearing, which was held in February 2024, the Court heard further expert evidence and submissions. In August 2024, between the hearing and judgment being handed down, Dr Lynch died alongside several other passengers when his yacht, The Bayesian, sunk off the coast of Sicily, such that the claim proceeds against his estate.

Dr Lynch’s position at the quantum hearing had been that despite the Court having found that he and Mr Hussain had conducted an extensive fraud whose aim was “to portray Autonomy as a much larger and more successful company than it really was” and thereby shore up its share price, their actions had either not affected the share price at all, or positively harmed it. Thus, Dr Lynch argued that absent the fraud HP would have paid the same, or more, for Autonomy as it did in fact, and so had suffered no loss.

The quantum judgment, which runs to over 100,000 words, addresses the differences between the valuation experts’ approaches in considerable detail, although the Judge ultimately reaches his conclusion at a high level, by application of the “broad axe”. As foreshadowed in his liability judgment, he finds the Claimants’ losses to be substantial, if substantially less than claimed: a sum in excess of £700,000,000, excluding interest. The great majority of that amount is owed in US dollars. The US dollar amount, and interest, will be determined following a further hearing later this year.

The judgment is available here.