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

Thackray Williams—Lucy Zhu

Thackray Williams—Lucy Zhu

Dual-qualified partner joins as head of commercial property department

Morgan Lewis—David A. McManus

Morgan Lewis—David A. McManus

Firm announces appointment of next chair

Burges Salmon—Rebecca Wilsker

Burges Salmon—Rebecca Wilsker

Director joins corporate team from the US

NEWS
What safeguards apply when trust corporations are appointed as deputy by the Court of Protection? 
Disputing parties are expected to take part in alternative dispute resolution (ADR), where this is suitable for their case. At what point, however, does refusing to participate cross the threshold of ‘unreasonable’ and attract adverse costs consequences?
When it comes to free legal advice, demand massively outweighs supply. 'Millions of people are excluded from access to justice as they don’t have anywhere to turn for free advice—or don’t know that they can ask for help,' Bhavini Bhatt, development director at the Access to Justice Foundation, writes in this week's NLJ
When an ex-couple is deciding who gets what in the divorce or civil partnership dissolution, when is it appropriate for a third party to intervene? David Burrows, NLJ columnist and solicitor advocate, considers this thorny issue in this week’s NLJ
NLJ's latest Charities Appeals Supplement has been published in this week’s issue
back-to-top-scroll