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Liability – exclusion clause Print
These days, many law firms limit their potential liability by putting a cap on potential damages in the retainer letter. Whilst a simple cap on damages is the usual approach, it is also sensible to consider seeking to exclude indirect or consequential losses. All these approaches are valid, provided liability is not reduced below the minimum required level of cover.

More sophisticated clauses might also have a provision stating that claims must be made within a particular period. For instance, the clause may require notification of a claim within the first period, and the commencement of claims within a further period. Such provisions are generally enforceable, if reasonable. A still more sophisticated approach is to include a net-contribution clause. This short circuits the effects of potential contribution claims and leaves the solicitor with only that liability that it is fair for him to have, bearing in mind the blame attached to any other professional. A typical clause might read:

‘The firm’s liability under this retainer or otherwise relating to it shall be limited to that proportion of your losses that it would be just and equitable to require the firm to pay having regard to the extent of the firm’s responsibility for the same on the basis that all other professional advisers involved in matters relating to this retainer shall be deemed to have provided an undertaking in terms no less onerous than this clause.’

This suggested wording (which is hardly a model of clarity!) comes from a useful article in [2007] 12 The Commercial Litigation Law Journal 2. © Practical Lawyer

June 2007
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