Suppliers threaten price rises over limited liability



Antony Savvas

IT suppliers are lobbying the Government to limit their liability in disputes with users when products prove faulty or...



Antony Savvas

IT suppliers are lobbying the Government to limit their liability in disputes with users when products prove faulty or services aren't maintained. And they say that if such limited liability is not forthcoming they will have to increase prices.

The Computing Services and Software Association (CSSA) is exerting pressure on the Government after ICL, a leading CSSA member, was forced to settle a dispute with South West Water over liability. The pair argued over an IT contract in court, with the judgement going against ICL. ICL appealed, but the companies agreed an out-of-court settlement, which has not been disclosed, before the verdict.

The CSSA wants clauses negotiated by users and suppliers before a contract is signed to be upheld in courts. But the courts have already set precedents which discount such clauses on the grounds that they are unfair to the user, with the Unfair Contracts Act being cited.

This is what the CSSA wants to overturn. It is asking the Government to bring in legislation which confirms that such clauses should be upheld.

Although the CSSA's move will alarm users, the organisation's director of policy Tim Conway is unrepentant, and is threatening higher prices if the CSSA doesn't get its way. Conway said, "If nothing is done about the Unfair Contracts Act, suppliers will have to pay higher insurance premiums to cover their liability in disputes, and this will lead to the cost being passed onto users."

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