Issue link: https://htpgraphics.uberflip.com/i/392122
37 Liability Limitations – It is possible within the contract which you have with your client to limit your liability. If these limitations are set out in your standard Terms of Business then they have to be reasonable. In addition by law you cannot exclude your liability for death or personal injury caused by your negligence in providing the consultancy services. So if you give advice in relation to the construction of a building, which subsequently collapses and seriously injures someone because your advice was negligent, then you could in theory limit your liability for damage to the building but not for the injury to the person. It is common within business contracts to limit liability for what is often described as "consequential loss". It is better to make sure that you exclude loss of profit, loss of business and consequential loss, as not all loss of profit is seen as consequential. You should put a cap on your liability, perhaps limited to the amount that you are being paid under the consultancy agreement. Sometimes a "reasonableness test" applies, if the consultancy fee is small and the potential risks are high, then a court might take the view that to limit liability to the level of the consultancy fee is not reasonable. In that case you have to ask yourself whether your consultancy fee should be higher to reflect the risk, whether a higher liability cap should be offered or whether you should be undertaking the consultancy work at all. You should also consider limiting the time within which claims can be brought. As a result of the nature of consultancy work that might have to be a certain number of months after the client becomes aware that it has a possible claim against you. However you limit your liability, it is important that the provisions in your contract are reviewed by somebody who understands these sorts of provisions. It is very easy to include limitations which inadvertently negate the limitation entirely because of the operation of law. There will be people within your Contract Services Office, IP commercialisation organisation or their equivalent who should be able to assist you in relation to such issues, as well as external professional service advisers. Insurance – There will always be some risk which you will have to accept as part of entering into any consultancy arrangement and which cannot be limited. You should therefore look to have in place professional indemnity Managing Risk Section 6