RBS looks at legal action against software provider

June 28, 2012

Quite reasonably, people expect the computer systems which underpin the banking sector to be completely robust, especially as these systems have been in use for some years. The question is - when things go wrong with your computer system due to a defect in the system supplied, as they often do, can you sue your supplier for the losses you incur? The answer will lie in the contract you signed or the supplier's terms and conditions. In relation to the losses which can be claimed, typically contracts exclude liability for loss of business or lost profits (which may be the main losses which you suffer), and exclude liability for so-called consequential losses. They usually also impose a maximum sum for which the supplier will be liable, which could be an arbitrary amount, or based on the amount paid or linked to the amount of the supplier's insurance. Where the contract is based on the supplier's standard terms and conditions, you may be able to argue that the limitation of liability clauses are unenforceable on the basis that they are unreasonable in the circumstances. If you can argue that, the supplier's liability could be unlimited.

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Nigel Miller
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