In Timothy Duncan Earles v Barclays Bank PLC [2009] EWHC 2500 (Mercantile) the court considered whether it was reasonable for a Bank, seeking to operate a commercial customer’s bank accounts within their prescribed limits, to exclude damages for consequential loss, loss of business, goodwill, opportunity or profit.

The court held that where a claimant (in this instance a former bank manager and property developer) had equal bargaining power and was assuming a risk for substantial profit, it would be unfair for the Bank to be exposed to a similar risk as they were “merely providing facilities and assumed no further duties of care that would give rise to consequential losses”.

The consideration of the exclusion clause in the judgement was “strictly otiose”, however, given such a limitation of liability is not uncommon, the court’s view that such a clause is fair and enforceable will no doubt be welcomed by lenders.