Fierce exemption clause? That’s tough.

A satisfyingly muscular exemption clause decision from Stuart-Smith J yesterday in Persimmon Homes Ltd & Ors v Ove Arup & Partners Ltd & Anor [2015] EWHC 3573 (TCC) (on BAILII). Arup advised a consortium of capitalists which wanted to bid for derelict land at Barry Docks in Cardiff (not a million miles from where this blog is based). The consortium bought the site and then, having had a nasty contamination surprise when the land turned out to be replete with asbestos, sued Arup for negligence in failing to spot it. Arup told them to go fish, or at least limit their claim, relying on a clause saying: “The Consultant’s aggregate liability under this Agreement whether in contract, tort (including negligence), for breach of statutory duty or otherwise (other than for death or personal injury caused by the Consultant’s negligence) shall be limited to £12,000,000.00 (twelve million pounds) with the liability for pollution and contamination limited to £5,000,000.00 (five million pounds) in the aggregate. Liability for any claim in relation to asbestos is excluded.”

Stuart-Smith J was rightly impatient of the consortium’s attempts to slide out of this clause by interpreting it to death. Such clauses, he said, should be interpreted like any other contractual term: there was no reason not to take this one au pied de la lettre and hold that, as any businessman would have thought who hadn’t been brought up with academic contract lawyers snuffling round his heels, it protected Arup. Interestingly, he suggested that the third “rule” in Canada Steamship (the one about clauses apt to cover negligence not applying to it when there was a conceivable alternative cause of action to tie them to) need not be taken terribly seriously these days, noting that Lord Hope in Geys v Société Générale [2013] 1 AC 523 had (probably deliberately) omitted it in his discussion.


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Professor Andrew Tettenborn

Professor Andrew Tettenborn joined Swansea Law School and the Institute of International Shipping and Trade Law in 2010 having previously taught at the universities of Exeter (Bracton Professor of Law 1996-2010), Nottingham and Cambridge. Professor Tettenborn is a well-known scholar both in common law and continental jurisdictions. He has held visiting positions at Melbourne University, the University of Connecticut and at Case Law School, Cheveland, Ohio. He is author and co-author of books on torts, damages and maritime law, and of numerous articles and chapters on aspects of common law, commercial law and restitution.

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