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Capping the well

25 February 2016 / Chris Nillesen
Issue: 7688 / Categories: Features , Commercial
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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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MOVERS & SHAKERS

CBI South-East Council—Mike Wilson

CBI South-East Council—Mike Wilson

Blake Morgan managing partner appointed chair of CBI South-East Council

Birketts—Phillippa O’Neill

Birketts—Phillippa O’Neill

Commercial dispute resolution team welcomes partner in Cambridge

Charles Russell Speechlys—Matthew Griffin

Charles Russell Speechlys—Matthew Griffin

Firm strengthens international funds capability with senior hire

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