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25 February 2016 / Chris Nillesen
Issue: 7688 / Categories: Features , Commercial
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Capping the well

A cap on liability can lead to some serious sparring with clients, as Chris Nillesen reports

The recent case of Elevantine Full Circle Ltd v Amex Earth & Environmental (UK) Ltd [2013] EWHC 1191 (TCC) (Elevantine) concerned a dispute where the claimant sought £790K worth of damages for breach of contract. The defendant challenged the claim on a number of grounds, including the existence of a contractual clause limiting the total liability of the defendant to £14K.

The court ruled in favour of the defendant on other grounds and therefore did not need to examine the validity of the limitation clause, however the judge did state, obiter dicta , that if necessary he would have upheld the £14K contractual liability cap as a fair and reasonable clause. By contrast in Saint Gobain Building Distribution Ltd (t/a International Decorative Surfaces) v Hillmead Joinery (Swindon) Ltd [2015] EWHC B7 (TCC) (Gobain) the courts held a clause capping all liability in standard terms to be unreasonable.

The effectiveness of clauses capping liability

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NEWS
The government will aim to pass legislation banning leasehold for new flats and capping ground rent, introducing non-compulsory digital ID and creating a ‘duty of candour’ for public servants (also known as the Hillsborough law) in the next Parliament

An Italian financier has lost his bid to block his Australian wife from filing divorce papers in England on the basis it was no longer her domicile of choice

Reforms to the disclosure regime in the business and property courts have not achieved their objectives, lawyers have warned
The Law Society has urged ministers to hold a public consultation on the use of artificial intelligence (AI) in the justice system as a whole
Ministers have proposed bringing inquest work under a single fee scheme for legal help and advocacy legal aid work
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