The High Court of Ireland, applying principles of contract interpretation common to both English and Irish law, has ruled on the meaning of “gross negligence”, in a clause limiting liability under a commercial contract.
It is sometimes suggested that since English law does not define gross negligence, the courts may have some difficulty giving effect to that term in a commercial contract. This decision of an Irish court turned on the question of whether the alleged breach of contract was gross negligence or not. The court had no difficulty in reaching a decision and giving effect to the clause.
Although English tort law has no concept of gross negligence, this expression often appears in commercial contracts, usually in clauses limiting liability. Modern case law suggests the courts will give effect to the word “gross” in such a clause as a matter of contract interpretation. However, relatively few reported cases under English law include a finding of gross negligence.
This case involved a clause limiting liability except in cases of ‘wilful default or gross negligence’. The court worked on the principle that gross negligence involves ‘a significant degree of carelessness’.
In this particular contract, it was held that gross negligence meant “a degree of negligence where whatever duty of care may be involved has not been met by a significant margin”.
ICDL GCC Foundation FZ-LLC v The European Computer Driving Licence Foundation Ltd (2011)
DDI – 0117 9453 042