Spreadsheets took a star turn in court cases even before the world ran on Excel, the workhorse for government and businesses. In October 1981 the Ford Motor Co introduced
spreadsheet evidence into court proceedings against a company infringing on their trademarks. The US motor giant’s lawyers submitted its spreadsheet exhibits in a successful claim against a business selling $3.2 of knockoff car parts “stamped with Ford’s registered trademarks packaged in boxes bearing Ford’s copyrighted artwork and color schemes.” [Ford Motor Co. v. Auto Supply Co., 661 F.2d 1171, Oct. 14, 1981]. In the case, Chief Judge Lay reiterated that “spreadsheets” (the term was so novel it was put in quotation marks by the court) were allowed as evidence despite remonstrations by the opposing counsel.
The Legal Case for Spreadsheets in Court
Spreadsheet evidence, the court heard, was what the framers of “Rule 1006”–a statute allowing admittance of “Voluminous or Bulky Records”–had in mind when discussing the admission of large amounts of data into proceedings.
This rule encompasses “any presentation in the form of a chart, summary, or calculation (including demonstrative charts).” Much later in United States vs Keck (2011) the court confirmed that “original spreadsheets constitute business records, the evidence is admissible, either directly under Federal Rule of Evidence 803(b) or as a summary.” With spreadsheets firmly established in court for more than 40 years, we look at legal cases from 2022 to 2024. This reveals how cases-and sometimes business fortunes-have been decided on the formula, cells, and calculations of the ubiquitous spreadsheet.
How Spreadsheets are central to Tender and Procurement Bids
Spreadsheets are a central feature in government procurement bids. The US Department of Justice discusses spreadsheets as central to cost analysis of bids arguing that “even though a spreadsheet is not mandatory, its use is highly recommended.” In the UK, the government website includes a downloadable Excel file: ”Financial viability risk assessment tool to aid with procurements”. Furthermore, one out of three US small-to-medium sized businesses rely exclusively on Excel for all their core finance processes putting spreadsheets central to economic activity. Specifically, 53% of US SMB CFOs primarily use Excel for workforce planning, month end closes and reconciliations. Excel is the only tool in the toolbox for 45% of board presentations and 42% of sales forecasts (Datarails, SMB CFO sentiments: State of Finance Departments).
The crazy Excel court Cases 2022-2024
Here are 12 legal cases which show how the turn of a cell or error in Excel has led to bumper $210million court cases between 2022 and 2024.
1. Spreadsheet error lands German conglomerate a $10m bill
Thyssenkrupp Materials (UK) Ltd v Revenue and Customs Commissioners, WL 01316446 (2024)
The UK division of German industrial conglomerate Thyssenkrupp, appealed after being hit with a $10 million (£8 million) bill after submitting incompatible “bills of discharge (BoD)” to HMRC in Excel spreadsheets.
The basis of HMRC’s demand was that they considered that Thyssenkrupp’s quarterly BoDs contained spreadsheet errors which breached the relevant requirements. This triggered HMRC’s demand for payments of custom duty and import VAT. The financial implications for TK were staggering. HMRC issued a demand for £8,889,275.43.
This was a combination of £2,409,009.91 for Customs duty and £6,480,265.52 for import VAT, all for the period from March 2014 to December 2014. Thyssenkrupp agreed that its BoDs contained some errors and some data that was inconsistent but maintained that the overwhelming majority of entries were accurate and that the identified errors were immaterial or de minimis.
HMRC did not concur, maintaining its position that a single Excel error on a BoD means that Customs duty and import VAT liabilities arise regarding all the imports covered by the quarterly BoD in question.
In turn, Thyssenkrupp (plaintiffs) appealed. The court allowed the appeal. Discussing the error Mrs Justice Bacon Judge Greg Sinfield said in her judgment that for context “each of the relevant BoD spreadsheets contained around 100,000– 200,000 data points.” She wrote: “The proposition that a single error in a single cell within a BoD will lead to a customs debt being incurred in relation to all goods covered by that BoD is, however, so disproportionate as to be entirely absurd.
2. “Stolen “Floor Dashboard” spreadsheet’s in Trade Secret dispute
Rescue 1 Fin., LLC v. Complete Debt Relief, LLC,(C.D. Cal, 2023)
Rescue 1 Financial LLC alleged that Defendants Michael Eeg and Cory Gipson—previously a sales manager and sales directors at the company— misappropriated trade secrets. They did so while in the process of establishing a competing company, the court heard. Central to the dispute was a Google spreadsheet titled “Floor Dashboard.”
The court heard this spreadsheet “contain[s] trade secret key performance metrics pertaining to sales representatives’ performance, lead-to-close ratios, deals, and historical data.”
The court heard the allegation that when Gipson left his employment he removed the company’s access to the spreadsheet and kept complete access for himself. The Defendants’ motion to dismiss was partly granted and partly denied by the court.
3. Company accused of billing millions for fake lab tests appeals
against “glorified Excel spreadsheets”
United Healthcare Servs., Inc. v. Synergen Health LLC, No. 3:20-CV-0301-X, 2023 WL 4186370
United HealthCare Services sued Synergen Health. They alleged Synergen worked
with another company, Next Health, to defraud United over insurance payouts.
This included millions of dollars for fake lab tests (United alleged that the labs in
question did not even exist).
United retained Jacob Adams, a data analyst and fraud examiner to build
their case. However, in a move to exclude his expert testimony, Synergen
complained Adams’ “methodology amounted to using a glorified Excel
spreadsheet.” In overruling Synergen’s objections, Brantley Starr, US District
Judge said: “Synergen fails to explain why the assembly and interpretation of
spreadsheets are categorically verboten for upstanding experts. Nor could it.
Courts routinely allow expert testimony based on spreadsheets.”
4. Court overturns government defense contract decision after spreadsheet error
Aspire Therapy Servs. & Consultants, Inc vs United States), Aspire Therapy Services May 2023
Aspire filed suit after losing out on a procurement contract with the Defense Commissary Agency (DeCA’s). The procurement process required “offerors, including Aspire, to break down their proposed services and prices and submit a cost in a breakout spreadsheet via Microsoft Excel.”
Kathryn C Davis, Court of Federal Claims said: “Aspire states that the inclusion of the number 51 in cell C16 formula was a typo, and it should have entered 81- the correct number from the Direct and Indirect Labor Summary Spreadsheet. As a result of this typo, the Material Handling Labor hours were 30 hours less than intended, as were the total Direct Labor hours in cell C.26.” The bid was disqualified by the government procurement process as “Aspire’s number of direct labor hours reflected in two different spreadsheets submitted within its proposal did not match”.
Aspire fought back, alleging that DeCA’s disqualification of its proposal over spreadsheet omissions and errors was “arbitrary and capricious and an abuse of discretion.”
Ultimately, the Court ruled that DeCA should have allowed the bidder to correct what was “a minor typographical error” in its Excel sheets.
It emerged that DeCA received seven other proposals in response to the solicitation – DeCA rejected 4 other proposals for failing the spreadsheet test.
5. Excel error sees company lose out on $138,000 contract (and no luck in court)
Matter of: Aurora Indus., LLC, B-419448.4 (2023)
In a 2023 case, Virginia-based Aurora Industries found that an Excel error put them out of the running to land a contract – ultimately worth $138,572 – with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The court found Aurora’s proposal was rightly rendered invalid by ATF for being noncompliant after “adding cells” to the Excel-based Request for Proposal. The court upheld ATF’s position that their “RFP prohibited adding or deleting cells from the pricing chart” making it “ineligible for award”.
The ruling states: “The RFP included a pricing spreadsheet, which listed numerous items of clothing, firearms accessories, body armor, and medical, safety, and measuring equipment. Offerors were to provide a price for each listed item and a total price for each year of performance. The RFP prohibited adding or deleting cells from the pricing chart noting contractors will not add or delete cells or make format changes to the Attachment B (the Excel spreadsheet).”
The Aurora contract was flagged for an “unsatisfactory” technical/managerial approach. The court agreed with the government.
6. US Government spreadsheet error brings parties back to court in $10m
Ponzi scheme case
United States v. Springer, S.D. Texas (2022)
Dean Lester Springer was already convicted for running a Ponzi scheme in which people invested more than $10m in intermodal shipping containers. But lawyers were brought back to court as the Government was forced to file a motion to correct an “arithmetic” spreadsheet error related to orders for Springer and co-defendant Steven Patrick Jones. The Government attached spreadsheets that “correct the arithmetical error in the total loss column of the original judgments” said Gary H. Miller, Senior United States District Judge. “The initial spreadsheet contained entries for investors who were not owed restitution.” Springer objected to the court granting the motion to correct the spreadsheet error without his input-denied by the court.
7. Unsuccessful attempt to invalidate rival’s $200m contract flags Excel errors
Ahtna Logistics, LLC v. United States, 163 Fed. Cl. 488, 495 (2022)
The highest value spreadsheet spat saw Ahtna try, unsuccessfully, to invalidate the awarding of a winning contract worth $200m by a rival bidder over its rival’s Excel omissions.
Ahtna’s argument was that the U.S. Immigration and Customs Enforcement (ICE) should nullify the winning bid from Akima Infrastructure Protection, LLC (“AIP”) an Indigenous-owned company to develop facilities at Port Isabel Detention Center in Los Fresnos, Texas.
Ahtna used the court proceedings to try and secure the ICE contract for itself over the Excel mistake. In a 60-page complaint, ultimately rejected by the court, Ahtna, also a Native-owned company, alleged the competitor’s tender “failed to follow the solicitation instructions regarding spreadsheet calculations and errors’’.
This included that their rival was at fault for “not showing certain calculations in its spreadsheets”. In his decision, U.S Claims Court Judge Solomson ruled: “The court rejects Ahtna’s claim the absence of some formulas in AIP’s spreadsheets required ICE to eliminate AIP’s proposal from consideration.”
8. Spreadsheet used in employment dispute proves problematic
Contingent & Future Technologies Limited v Onea, 2022
Before the business and property court in London, it was alleged that Ionut Cosmin, an ex-Chief Product Officer at Contingent accessed the company’s computer systems “without authorisation” after his suspension. His alleged specific times accessing this data were cataloged in a spreadsheet-known as the “Access Spreadsheet”.
The court heard that the Access Spreadsheet “purported to show 64 times the Defendant accessed the Claimant’s computer systems after being suspended and without authorisation”. However In the words of Joanne Wicks QC, sitting as a Deputy High Court Judge, of 64 instances outlined in the spreadsheet “57 were on 4 October 2021. It is now accepted that those entries for 4 October 2021 were in error.”
The case is ongoing.
9. “Material Errors” in HMRC spreadsheets sees UK Government lose in court
Brac Saajan Exchange Ltd v Revenue and Customs Commissioners (UK) 2022
Brac Saajan Exchange Ltd (BSEL), as a money service bureau is required to register with the UK’s HMRC, the UK’s tax, payments and customs authority.
Representatives of the company successfully appealed against HMRC’s decision to cancel their license under The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. HMRC had revoked Brac’s registration as it believed that there were wide scale breaches of the Money Laundering Regulations.
However in a 10-day hearing at the First Tier Tribunal, BSEL was “able to demonstrate that the majority of the breaches HMRC contended were not made out” according to Abbas Lakha QC.
Fallible spreadsheets again appeared!
Ms Sarah Chapman, an Officer of HM Revenue and Customs (“HMRC”) made the case to cancel the registration of the finance company, the court heard. Supporting HMRC’s case was Mr Allington-Jones, an HMRC data specialist who produced spreadsheets found by the court to contain “material errors.” The final ruling by Tribunal Judge Anne Redston said: “Ms Chapman asked for and received BSEL’s detailed transactional data, who in turn gave that data to Mr Allington-Jones, who produced around 150 spreadsheets.
“Ms Chapman relied on some of Mr Allington-Jones’s spreadsheets in her ‘Table of Failures’. But Redston continued that “HMRC accepted in the course of the hearing that one of those 16 spreadsheets contained ‘material errors’.
She added” “Parts of Ms Chapman’s evidence depended on Mr Allington Jones’s spreadsheets; to the extent that those figures are unreliable, the same is true of her related evidence.”
In one instance referencing an offending spreadsheet (Exhibit SAJ05) Judge Redston said: “I was unable to identify the £22m figure from Mr Allington-Jones’s spreadsheet; it instead showed a figure of £20,111,766.71, a difference of some £2m”. She concluded “Mr Allington-Jones’s further witness evidence should not be admitted.”
10. Court unconvinced that innocent “Spreadsheet Error” caused Tax Return Failure
Khan v Secretary of State for the Home Department, 2022
In the UK, Marks Solicitors, representing “Individual A” submitted a letter aimed to convince the UK government that errors in this tax return was due to the fact that an “initial filing contained a spreadsheet error, later rectified”, according to the final summary in the case. The UK Government and an upper court were unconvinced about this
spreadsheet excuse. The court summary concludes: “The Upper Tribunal (UT) noted that A was given “ample notice of concerns regarding income genuineness but failed to provide satisfactory explanations”. The court upheld the Secretary of State’s conclusion that there “was no genuine error”, and A had “intentionally sought to deceive”.
11. Blaming the spreadsheet doesn’t work as fine of $5k upheld
R. PA Accountancy Services Ltd v Revenue and Customs Commissioners, 2022
R.FPA, an accountancy firm was fined £4343.70 ($5,500) for an 836 days-late return of its corporation taxes. In its submission, Mrs. Noor, an employee at R.FPA, told the UK Tribunal she had “prepared a spreadsheet with filing dates on it to check that the accounts were submitted on time”-a spreadsheet that let her down. Mrs Noor said: “As a firm of accountants where we advise our clients to pay and submit accounts on time, there is no reason why we would not be submitting returns.” The court dismissed the appeal and upheld the full penalty.
12. Spreadsheet errors highlighted in Prototype trade dispute
Instrument Product Development Ltd v WD Engineering Solutions Ltd (UK), 2022)
Spreadsheets featured heavily in this trade dispute between Instrument Product
Development Ltd and WD Engineering Solutions. It rested on the cloudy details
of a venture for manufacturing prototype props for coffee pod maker, Nespresso,
for an upcoming Cannes Film Festival (64 serving tray sets, 74 aroma tray sets
and 20 capsule openers).
He [Mr Beale] explained that he was not fluent in the use of Excel, and appeared
genuinely surprised when the errors in the spreadsheet were pointed out to him. I
accept that these were genuine mistakes on his part.
By contrast the counterparty had argued the exchange indicated a lack of
transparency. The judge ultimately ruled that WDES must pay IPD 50% of the
profits from the disputed agreement relating to orders made for certain
Nespresso products.
At issue, the court heard, was the scope of the original agreement between the
parties. Part of the problem was a spreadsheet sent by one party indicating
incorrect costings for the venture. In his final judgment, Richard Farnhill in the
Chancery Division in 2022 explained the role of the problematic spreadsheet: “I
accept that this was not deliberate on the part of Mr Beale ”(the party that
produced the contested spreadsheet).”
