Phillips Products v Hyland [1987] 2 All ER 620

• Defendant loaned Plaintiff a machine and a person to operate it. Defendant’s employee seconded to operate the machine caused damage to Plaintiff’s building.

• Plaintiff sued Defendant, who tried to rely on an exemption clause which stated that the hirer (Plaintiff) would be liable for all claims in connection with damage caused by the seconded employee.

• CA allowed Plaintiff’s claim on the grounds that the clause was unreasonable within the meaning of s.2 (2).  

Slade LJ

• S.11(5) shows the burden to be on Defendant to demonstrate the reasonableness of the exemption clause.

• He quotes Lord Bridge’s dictum in George Mitchell v Finney Lock Seeds as to when the appellate courts should interfere.

• The clause was unreasonable because: the hirers couldn’t play a part in choosing which employee (and the quality of the employee) seconded to them; there was little Plaintiff could do about the clause since it was used industry-wide and therefore probably non-negotiable; absence of warranties as to the seconded employee’s skill level.

• CA also ruled that the condition quoted above WAS an exemption clause (contrary to Defendant’s argument).

RELATED CASES

• George Mitchell v Finney Lock Seeds

• Thompson v Lohan (Plant Hire)