Tuesday, 23 March 2010

Limitations of liability and statutory interest

Beware the eiusdem generis rule! Charles Russell's commercial law Critique blawg - which I have just discovered, but will add to my already impossibly extensive reading list - reports Marketstudy Insurance Co & Ors -v- Endsleigh Insurance Services [2010] EWHC 281 (Comm) in which David Steel J (not, as that blag calls him, Steel J) construed a pretty bog-standard limitation of liability clause to exclude liability for statutory interest. The clause in question read:

Endsleigh’s total liability in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of the Agreement shall be limited to the aggregate amount of fees received pursuant to clause 6.1 above.”

To cut a short story even shorter (because you should be reading this on the Critique blawg, along with the commentary there) the judge seems to have applied the eiusdem generis rule to interpret what the word "otherwise" meant here (although the words "eiusdem generis" don't appear in the judgment), so it meant other matters like contract, tort, misrep and restitution - and statutory interest was, he thought, a different matter because it arose from an exercise of the court's discretion.

Better recast the limitation clauses in any precedents I have lurking on my computer, then. Either mention interest specifically, or displace the eiusdem generis rule (with words like "without prejudice to the generality of ..." perhaps? Working them into the right place would give an ugly result - better to strengthen the "otherwise" with an "any" before and "whatsoever" after, perhaps - and, what the hell, add "interest" to the list for good measure).

This is not legal advice. (Hey, there's a great title for a blog!)

No comments:


blogger templates | Make Money Online