{"id":146227,"date":"2025-03-20T19:07:30","date_gmt":"2025-03-20T19:07:30","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/legal\/limiting-your-liability-are-you-sure-you-are-using-the-right-language-law-firm\/"},"modified":"2025-03-20T19:07:30","modified_gmt":"2025-03-20T19:07:30","slug":"limiting-your-liability-are-you-sure-you-are-using-the-right-language-law-firm","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=146227","title":{"rendered":"Limiting your liability \u2013 are you sure you are using the right language? – Law Firm"},"content":{"rendered":"


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EE Limited and Virgin Mobile have recently emerged from a Court of Appeal <\/a>case concerned with limiting liability in their supply agreement by excluding liability for \u201canticipatory profits\u201d. But what were \u201canticipatory profits\u201d, and could they be something less than the loss of profits?<\/p>\n

This case followed the High Court judgment in 2023<\/a>. The Court of Appeals\u2019 judgment brings a renewed focus on the need for careful drafting of limitation (and, in turn, exclusion) of liability clauses.<\/p>\n

Background: EE Limited v Virgin Mobile Telecoms Limited<\/em><\/h2>\n

In 2013, EE and Virgin Mobile entered into a supply agreement.<\/p>\n

Under the supply agreement, EE would provide mobile network services to Virgin Mobile, which in turn would use EE\u2019s network exclusively for a specified period (\u201cExclusivity Clause\u201d). The agreement included a limitation of liability clause preventing either party from bringing claims related to \u201canticipated profits<\/em>\u201d.<\/p>\n

In 2021, Virgin Mobile allegedly breached the Exclusivity Clause by moving non-5G customers to a competitor\u2019s network. EE\u2019s claim for \u00a324.6 million in lost revenue was dismissed by the High Court as it was considered a claim for loss of profits, which was excluded by a limitation of liability clause.<\/p>\n

The appeal<\/h2>\n

EE appealed the High Court\u2019s decision. The primary questions were:<\/p>\n

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  1. Whether EE\u2019s claim was correctly characterised as a loss of profits claim.<\/li>\n
  2. Whether a limitation of liability clause prevented such a claim.<\/li>\n<\/ol>\n

    Appeal decision<\/h2>\n

    The Court of Appeal, in a split 2:1 decision, upheld the High Court\u2019s dismissal of EE\u2019s claim, revealing nuanced judicial reasoning and the close call in interpreting the\u00a0limitation of liability clause.<\/p>\n