header-logo header-logo

25 February 2016 / Chris Nillesen
Issue: 7688 / Categories: Features , Commercial
printer mail-detail

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

If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

Church Court Chambers—Maryam Syed KC

Church Court Chambers—Maryam Syed KC

Church Court Chambers welcomes Maryam Syed KC

Devonshires—Sean Garbutt

Devonshires—Sean Garbutt

Devonshires strengthens construction team with appointment of partner Sean Garbutt

Thackray Williams—Alexandra Hubbard

Thackray Williams—Alexandra Hubbard

Thackray Williams strengthens employment team with dual-qualified solicitor

NEWS
Judges and lawyers reviewing the rules of disclosure have ruled out a return to the old system of CPR Part 31, and will consult on proposals to simplify the Practice Direction (PD) 57AD regime by early next year
A consumer organisation has hit back at the Financial Conduct Authority (FCA) for encouraging motor finance compensation claimants to steer clear of law firms and claims management companies
A fast, free and anonymous piece of software has been launched to help law practices comply with their regulatory duty to guard against an increasing onslaught of cyberattacks
A mood of cautious optimism has enveloped the criminal law sector following indications the prime minister may abandon planned jury reforms
The Court of Appeal has held user damages are recoverable in a competition claim, in Meta Platforms Inc and other companies v Gormsen [2026] EWCA Civ 993
back-to-top-scroll