A recent decision of the Court of Appeal has shown that clearly worded exclusions of liability, which comply with relevant legal restrictions, will be upheld by the Courts, according to a corporate lawyer. “The Courts have traditionally been hostile to provisions which attempt to exclude or limit liability, and often seek to restrict their scope where possible. A recent case demonstrates, however, that a clear and unequivocal exclusion will be enforceable in accordance with its terms.”

Mr Round continues, “the case of Persimmon Homes & others –v- Ove Arup & Partners Limited concerned the appointment by a developer of an environmental and engineering consultant to carry out certain site investigation, design and development services in connection with a site in South Wales. The contract incorporated exclusion and limitation clauses which amongst other things provided that liability for any claim in relation to asbestos would be excluded. When asbestos was discovered on the property in greater amounts than had been indicated in the consultant’s report, the developer claimed against the consultant, who evoked the exclusion clause. The developer argued, however, that on the construction of the clause, the exclusion was only intended to exclude liability for causing the spread of asbestos rather than a failure to discover its presence, and that the wording did not exclude liability for negligence.”

According to Mr Round, after the Technology and Construction Court had found that the clause validly excluded all liability for negligence in relation to asbestos, the developer appealed. “The Court of Appeal, however, upheld the TCC’s decision. It was impossible to conclude that the clause had only sought to exclude liability for causing the spread of asbestos because if construed in this way, the clause would not have made grammatical sense. Furthermore, whilst Courts will continue to interpret exclusion clauses strictly, in this case the wording of the clause was sufficiently wide and unambiguous to exclude all liability including negligence.”

Mr Round concludes, “the case shows that whilst it is possible to challenge successfully a badly drafted exclusion, it pays to seek professional advice in drafting exclusion clauses, as a clearly worded clause which complies with applicable laws will be enforced.”