Liability Limitation Clauses – A Sharp Lesson

The Inner House provides a sharp lesson in Benkert UK Ltd v Paint Dispensing Ltd and demonstrates that; where one party is found liable for causing damage, it does not necessarily follow that a full recovery of damages will exist where a liability limitation clause operates; even in safety critical contracts.

The facts

Benkert UK engaged Paint Dispensing to perform maintenance work on Benkert's ink dispensers twice a year. On one occasion, a clip connecting a hose to the ink and solvent drums came loose, allowing solvent vapour to leak. This led to a major fire in Benkert's factory, which caused £30m worth of damage. Benkert recovered their loss from their insurers, who then raised a subrogated action against Paint Dispensing.