Excluding Liability in Tort
Excluding Liability For Negligence
Notices in Tort
The defendant could avoid a claim by making a contractual agreement with the claimant to waive any potential liability. Alternatively, the defendant might have attempted to limit or exclude his liability by way of a notice or sign. Any such notice needs to explicitly state that it is limiting or excluding liability or responsibility. For example:
- A sign saying ‘Warning: Path Ahead is Dangerous’ might be relevant to whether the defendant has discharged their duty of care or raise issues of volenti non fit injuria or contributory negligence. However, it would not be an exclusion notice;
- A notice saying ‘Warning: Individuals Enter This Area at their Own Risk’ might similarly raise issues of volenti non fit injuria or contributory negligence. However, it is not an exclusion notice;
- A sign saying ‘the owner takes no responsibility for losses suffered when using the path’ does raise issues of exclusion.
Any notice which limits or excludes liability is an exclusion notice. The courts will also deem a notice to be an exemption notice if it:
- Makes liability or enforcement subject to restrictive or onerous conditions;
- Excludes or limits the availability of any particular right or remedy; or
- Prejudices a person for pursuing a right or remedy: Unfair Contract Terms Act 1977, s 13(1).
Limitations on Exclusion Notices
A notice which excludes or limits liability is not automatically valid. Any notice which excludes or limits liability for negligence, occupier’s liability or defective product liability must meet the requirements of either the Unfair Contract Terms Act 1977 or the Consumer Rights Act 2015 to be valid.
When Does UCTA 1977 Apply?
UCTA 1977 applies to business-to-business interactions only, and not to dealings by traders with consumers. A trader is a person who is acting acting ‘for purposes relating to [their] trade, business, craft or profession’, either personally or through an agent: Consumer Rights Act 2015, s 2(2).
When Does the CRA 2015 Apply?
The CRA 2015 applies when a trader is dealing with a consumer. A consumer is ‘an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession’: Consumer Rights Act 2015, s 2(3). This excludes employment relationships: s 61(2), s 61(5).
Exclusion of Tortious Liability under UCTA 1977
It is not possible to exclude liability for death or personal injury: UCTA 1977, s 2(1). A notice can exclude liability for property damage or pure economic loss if it satisfies the requirement of ‘reasonableness‘: s 2(2).
A notice is ‘reasonable’ if it is ‘fair and reasonable to allow reliance on [the notice], having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen’: UCTA 1977, s 11(3). The burden is on the person relying on the notice to prove that it is reasonable: s 11(5).
Where the notice limits liability to a specific sum of money, the court will consider in particular:
- The resources the person relying on the notice could be expected to make available for meeting liability; and
- Whether insurance was available for that kind of loss: UCTA 1977, s 11(4).
Exclusion of Tortious Liability under the CRA 2015
The Consumer Rights Act 2015 controls the validity of any notice (written or otherwise – s 61(8)) which ‘relates to rights or obligations as between a trader and a consumer’ or which ‘purports to exclude or restrict a trader’s liability to a consumer’: CRA 2015, s 61(4).
There is no need for the notice to state it applies to consumers. It must, however, be ‘reasonable to assume [the notice] is intended to be seen or heard by a consumer’: s 61(6). When interpreting a consumer notice, the courts will resolve any ambiguity in favour the consumer: 69(1).
It is not possible to exclude liability for personal injury or death under the CRA 2015: s 65(1). A notice excluding liability for property damage or pure economic loss is not binding on consumers unless it is ‘fair‘: s 62(2).
A term is unfair if ‘contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer’: CRA 2015, s 62(6). Relevant factors include:
- The ‘the nature of the subject matter of the notice: CRA 2015, s 62(7)(a); and
- All ‘the circumstances existing when the rights or obligations to which [the notice] relates arose and to the terms of any contract on which it depends’: s 62(7)(b).
Excluding Liability For Statutory Torts
Special rules may apply where the notice attempts to exclude or limit liability under the special statutory liability regimes:
Occupiers Liability Act 1957
Section 2(1) of OLA 1957 allows occupiers to exclude and limit liability under the 1957 Act, where allowed under the CRA 2015 and UCTA 1977.
Occupiers Liability Act 1984
There is no reference in the CRA 2015, UCTA 1977 or OLA 1984 to occupiers being able to exclude liability against trespassers. It is controversial whether it is possible to exclude liability under the 1984 Act as a result.
Consumer Protection Act 1987
Section 7 of the Consumer Protection Act 1987 prohibits entirely the exclusion or limitation of liability. Any notice that purports to exclude strict liability for defective products is therefore unenforceable.
The Recreation/Education Exception: OLA 1957
The absolute ban on excluding liability for personal injury and death under the CRA 2015 does not apply where an occupier allowed the claimant onto the land for recreational purposes outside of the scope of the occupier’s business purposes: CRA 2015, s 66. However, the consumer can still try to prove that the notice is unfair.
A similar exception exists under UCTA 1977 where the occupier allowed the claimant onto the land for educational or recreational purposes which are outside of the scope of the occupier’s business purposes: UCTA 1977, s 1(3)(b). This exception allows occupiers to exclude liability for losses caused in these circumstances whether the exclusion is fair or not.