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Exclusion Clauses

Pleading, The old system of

Exclusion of Liability for Negligence
Last updated: 06-Oct-2014

Rutter v Palmer [1922] 2 KB 87, at p.92 by Scrutton LJ:

For the present purposes a rougher test will serve. In construing an exemption clause certain general rules may be applied: First the defendant is not exempted from liability for the negligence of his servants unless adequate words are used; secondly, the liability of the defendant apart from the exempting words must be ascertained; then the particular clause in question must be considered; and if the only liability of the party pleading the exemption is a liability for negligence, the clause will more readily operate to exempt him.

Where the only liability would have been for negligence, there is a rule that it is necessarily against that liability that the clause is intended to give protection, per Goddard LJ in Beaumont-Thomas v Blue Star Line Ltd. (1939) 3 All ER 127, at p 136:

… first of all, find what is the nature of the liability which, but for the exception, would rest on the person for whose protection the clause exists. If such liability arises only where there is a lack of due care and skill, it follows that a clause exempting that person from liability exempts him from the consequences of his negligence.

Canada Steamship Lines Ltd v R [1952] 1 All ER 305,  per Lord Morton at page 310:

1. If the clause contains language which expressly exempts the person in whose favour it is made (hereafter called "the proferens") from the consequence of the negligence of his own servants, effect must be give to that provision…

2. If there is no express reference to negligence, the court must consider whether the words used are wide enough, in their ordinary meaning, to cover negligence on the part of the servants of the proferens…

3. If the words used are wide enough for the above purpose, the court must then consider whether "the head of damage may be based on some ground other than that of negligence" … The "other ground" must not be so fanciful or remote that the proferens cannot be supposed to have desired protection against it, but, subject to this qualification, which is, no doubt, to be implied from Lord Greene’s words, the existence of a possible head of damage other than that of negligence is fatal to the proferens even if the words used are, prima facie, wide enough to cover negligence on the part of his servants.

Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71, per Salmon LJ:

It is well settled that a clause excluding liability for negligence should make its meaning plain on its face to any ordinarily literate and sensible person. The easiest way of doing that, of course, is to state expressly that the garage, tradesman or merchant, as the case may be, will not be responsible for any damage caused by his own negligence. No doubt merchants, tradesmen, garage proprietors and the like are a little shy of writing in an exclusion clause quite so bluntly as that. Clearly it would not tend to attract customers, and might even put many off. I am not saying that an exclusion clause cannot be effective to exclude negligence unless it does so expressly, but in order for the clause to be effective the language should be so plain that it clearly bears that meaning. I do not think that defendants should be allowed to shelter behind language which might lull the customer into a false sense of security by letting him think—unless perhaps he happens to be a lawyer—that he would have redress against the man with whom he was dealing for any damage which he, the customer, might suffer by the negligence of that person.

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