Professionals: Limiting Liability

Limitations of liability are now regularly employed by professional firms, as they seek to protect themselves in an increasingly demanding environment, in which the size of transactions continues to increase and few (if any) relationships are sacrosanct.

Professionals and the clients who instruct them need to be aware of:

• the options available to firms (e.g. a specific monetary amount or "liability cap", a limitation based upon the firm's available insurance cover etc)

• the court's likely approach if the "reasonableness" of any limitation of liability is challenged under the Unfair Contracts Terms Act 1977

• limiting liability to third parties (where a duty of care is assumed)

• drafting issues (e.g. the use of aggregate limitations of liability, the scope of the operative clause etc)