INDEMNITY CLAUSE HELD TO BE INEFFECTIVE TO EXCLUDE LIABILITY OF MAIN CONTRACTOR TO SUB-CONTRACTOR

Stent Foundations Ltd v M J Gleeson Group plc, unreported, Technology and Construction Court, 9 August 2000

In Stent Foundations Ltd v M J Gleeson Group plc, unreported, Technology and Construction Court, 9 August 2000 Judge Bowsher QC held that an indemnity clause in a contract between a main contractor and a sub-contractor applied only to a ‘true indemnity’, that is to say, a claim brought by a third party against one of the contracting parties who then claimed an indemnity from the other contracting party. It did not apply as between the contracting parties themselves, in other words to a claim brought by one contracting party against the other. Further he held, on the assumption that the clause could in fact apply to exclude some liability on the part of the defendants to the claimants, that it did not exclude liability for the defendants’ own negligence. Judge Bowsher QC concluded his judgment with an important warning for contract draftsmen who are seeking to allocation the risk of negligent conduct by one or other party to the contract.