An exemption clause could be challenged on the grounds that it was unfair and in breach of either the Unfair Contract Terms Act 1977 or the Unfair Terms in Consumer Contract Regulations 1994.
Both state a business cannot use a contract term or notice to exclude or restrict liability for death or personal injury resulting from negligence.
In the case of other loss or damage, a business can only exclude or restrict liability for negligence if this exclusion clause can be shown to be fair and reasonable. Obviously, opinions of what is “reasonable” will differ.
Peter Stewart of Field Fisher Waterhouse said that a court would look at whether the situation the company was trying to protect themselves against was “foreseeable”. If it is, it may be difficult for a company to argue it should not be liable for problems arising from it.
But Stewart argues that even though everyone knows the millennium bug may cause difficulties, no-one can say exactly what those difficulties will be.
Airtours Holidays company secretary Andy Cooper agrees. “The insurers are running an argument that the year 2000 is entirely foreseeable and therefore insurance won’t cover you for it, but you could argue it is entirely foreseeable that December 31 will become January 1 and it is likely there will be some problem somewhere in the world.”
Predicting whether the millennium bug will cause havoc resulting in floods of law suits or minor inconveniences, resulting in little or no litigation, is impossible.
But as Cooper says, operators have to do as much as they can to ensure that problems are minimised so that the exemption clauses will not even come into play.