Exclusion clauses: Court of Appeal confirms broader approach
Steven Williams, Mark Breslin & Katherine Butler
A Court of Appeal decision handed down yesterday has upheld the applicability of an exclusion clause covering asbestos liability in a consultant appointment. The decision follows other recent Court of Appeal decisions in adopting a natural and unstrained interpretation of exclusion clauses, free from the application of restrictive default rules. The decision also provides important guidance as to the application of the Canada Steamship principles to the interpretation of exclusion clauses.
Persimmon Homes Limited and Others v Ove Arup & Partners Limited and Anor Persimmon and its fellow Appellants were part of a consortium of house builders (the “Consortium”) who bought and developed a large site in Wales known as the Barry Waterfront. The Respondents (“Arup”) were also involved with the development, advising and providing professional services initially to the original owners of the Barry Waterfront and then subsequently to the Consortium. Over a number of years, Arup provided various advisory and design services under a series of contracts; namely: - The 1996 Appointment – An appointment between Arup and the previous owners of Barry Waterfront; - The 2007 Contract – A contract between Arup and the Consortium in relation to the purchase of the Barry Waterfront site; - The 2009 Agreement An agreement between Arup and the Consortium to provide engineering services in 2009 in relation to the development of the site; and
- The 2010 Warranties – Arup provided warranties to each consortium member in relation to services carried out under both the 1996 Appointment and the 2009 Agreement (the “2010 Warranties”). This case concerns clause 6.3 of the 2009 Agreement and clause 4.3 of the 2010 Warranties (the “Clauses”) which are, for all intents and purposes, identical providing that: ‘The Consultant’s aggregate liability under this [Agreement/Deed] 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/£5,000,000.00] 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.’ After committing itself to the purchase and development of the site, the Consortium discovered asbestos contamination in greater levels than it had expected. The Consortium brought proceedings against Arup alleging that Arup, inter alia, ought to have advised the Consortium of the presence of asbestos in the nature, extent and quantities found.