Limitations of liability Case Study no.1

A consultant was appointed by a developer to undertake various environmental surveys in respect of the redevelopment of former brickworks into housing.

Griffiths & Armour
20 September 2014
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The site itself included the former brickwork buildings and various stockpiles of materials, some visible and some buried. The consultant’s standard terms and conditions limited the consultant's liability to five times the contract price. The contract price was £7,000 and therefore the consultant's liability was capped at £35,000.

Following construction of five dwelling houses, in 2006 asbestos was discovered in the gardens of the properties.

The developer was registered with a home warranty provider.

The developer entered into liquidation and assigned any rights under the contracts with the consultant to the home warranty provider. 

In 2009, the warranty provider sought to recover from the consultant the cost of removal/remediation of the asbestos which was estimated to be in excess of £1m. 

Outcome

Given the limitation arguments and the strong cap on liability, the home warranty provider was persuaded to discontinue the claim entirely.

To contact Griffiths & Armour about this story, please email contractualrisk@griffithsandarmour.com.