SOTERIA INSURANCE LTD (FORMERLY CIS GENERAL INSURANCE LTD) v IBM UK LTD

[2022] EWCA Civ 440, Court of Appeal, Civil Division, Coulson and Phillips LJJ and Zacaroli J, 4 April 2022

Exclusion clause – Whether clause effective to exclude liability for wasted expenditure

The parties entered into a contract under which the defendant agreed to provide the claimant with a new IT system. The system was the subject of a number of delays which ultimately led to the decision to abandon the project. In these circumstances the claimant brought a claim for damages against the defendant. The claim came before O’Farrell J in the Technology and Construction Court, where a large number of issues were in dispute between the parties. Her principal conclusions were that the defendant had wrongfully repudiated the contract, that the claimant had established a claim for wrongful expenditure (the value of that claim was held to amount to some £122 million) but that the claim for wasted expenditure was excluded in its entirety by the operation of clause 23.3 of the contract between the parties.