In Goodlife Foods Limited v Hall Fire Protection the High Court re-assessed clauses in terms and conditions seeking to exclude liability for negligence.
Under section 2(1) of the Unfair Contract Terms Act 1977 (UCTA) a clause cannot exclude negligence for death or personal injury.
In Goodlife, a fire prevention system was installed in a warehouse. A fire broke out causing £6 million of damage, although thankfully no one was injured.
The claim was defended seeking to rely upon a clause excluding liability for loss, damage or expense to property or persons, directly or indirectly caused by negligence or the malfunction of the system.
The court accepted on the true construction of the clause damages arising from negligence for death or personal injury were being excluded which was expressly prohibited by UCTA and would render the whole clause invalid.
The court was prepared to ‘blue pencil’ to sever the clause in order that it could be read to delete reference to ‘persons’ and decided that the clause, although wide, was reasonable as it covered potential risks from faults with the fire prevention system.
The court noted these were insurable risks and considered the severed clause was a sensible allocation of risk between the parties. The clause was upheld as reasonable.
In this instance the court was willing to ‘blue pencil’ the exclusion clause, but it remains best practice to ensure terms and conditions do not exclude liability for death or personal injury.
Jacksons Law Firm has a wealth of experience dealing with all forms of dispute resolution, if you require any assistance contact Inderjit Gill via email or telephone him on 0191 206 9625/01642 356 525.
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