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Rudy Capildeo, partner at Charles Russell Speechlys.

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Case 1: Our clients were private collectors who instructed a shipper to remove and store their collection of paintings, sculptures and furniture from their home while it was being redecorated. When the time came for the works to be returned, the shipper accidentally smashed one of the clients’ pieces of porcelain.

The shipper claimed they were not liable for the damage caused, as the clients had purportedly agreed (under the shipper’s terms of business) to insure the shipper for any loss or damage caused by the shipper’s negligence under the terms of their own home insurance policy.

The client naturally did not want to call on their own insurance policy as it would affect their no claims bonus and undoubtedly affect future premiums. A dispute ensued and the parties eventually reached an out-of-court resolution.

Conclusion: It is arguable whether excluding liability by pushing the onus onto the client is enforceable as it flies contrary to the Consumer Act 2015 which granted greater protections for consumers.

Many businesses have still not updated their terms of business and could be looking to rely on caps on liability and exclusions that are wholly unenforceable. If a shipper or gallery wishes to exclude liability for negligence, it is not impossible to do so but requires a prominent reference in its terms of business.

Case 2: Our client, an Old Master gallery, had reluctantly accepted delivery of an artwork from a dealer who thought a picture may be of interest. On closer inspection, the picture was not of interest and our client returned it to the dealer.

On receipt of the returned picture, the dealer claimed our client had caused significant damage to the panel and said that he should be compensated in full for the purchase price value he had proposed to our client.

Our client instructed their insurers, whose loss adjuster determined the damage was present many years before. After some robust exchanges, the dealer dropped their claim.

Conclusion: A condition report and/or photographic evidence on delivery of the artwork would have saved significant time and money. Businesses should train their staff to ensure photos are immediately taken on receipt of works to ensure contemporaneous evidence is available should spurious damage claims be made.