GB Gas Holdings Ltd and Accenture (UK) Ltd and others  EWCA Civ 912
This appeal concerned preliminary issues arising from a dispute about an automated billing system designed by Accenture for GB. Problems arose with the system when installed, as it generated millions of “exceptions” which required staff at GB’s parent (Centrica) to resolve problems manually. Bills were sent out to Centrica’s customers late or not at all, and large volumes of complaints were received from those customers. Centrica alleged that it had suffered losses including: overpayments made to gas distributors; compensation paid to customers; and the costs of employing additional staff, writing off unbilled or late-billed gas and electricity, and resolving the technical problems.
One of the key issues on the appeal was whether Centrica’s losses came within the scope of a widely drawn exclusion clause which stated:
“16.2 Consequential Loss
… in no event shall either party be liable whether in contract, tort (including negligence) or otherwise, in respect of any of the following losses or damages:
16.2.1 loss of profi ts or of contracts arising directly or indirectly;
16.2.2 loss of business or of revenues arising directly or indirectly;
16.2.3 any losses, damages, costs or expenses whatsoever to the extent that these are indirect or consequential or punitive…”
In order to recover, Centrica therefore had to show that its loss was not direct and not within one of the specifi ed heads (loss of profi ts, contracts, business or revenue).
The court held that a number of the heads of loss claimed by Centrica fell outside the scope of clause 16.2, including: the gas distribution charges paid by Centrica; and the compensation paid to Centrica’s customers.
Despite a widely drawn exclusion clause which seemed to encompass loss of profi ts, contracts, business, revenues (whether direct or indirect), the court managed to conclude that Centrica’s losses fell outside the scope of that clause. It shows the courts remain keen to construe clauses narrowly where to do so would allow the recovery of substantial losses suffered. There is therefore a fi ne balance to be struck between drafting clauses which are so wide as to be unreasonable (for the purposes of the Unfair Contract Terms Act – although this is less of a risk with two large commercial parties), and one that is not quite wide enough.