This was an appeal from a decision that an exception clause in its standard terms was unreasonable and unenforceable under the Unfair Contract Terms Act 1977 (“UCTA”). The judge’s decision was reported in a previous briefing.

Regus (UK) Limited (“Regus”) supplies serviced office accommodation. Epcot Solutions Ltd (“Epcot”) provides professional IT training. Epcot entered into an agreement with Regus on Regus’ usual terms and conditions for the use of serviced office accommodation at Heathrow for Epcot’s training courses. After Regus closed Heathrow, Epcot were offered, and accepted, alternative accommodation at Stockley Park. Epcot entered into a new agreement with Regus on the same terms and conditions.

The air conditioning system at Stockley Park did not work satisfactorily. Epcot made several complaints to Regus regarding the air conditioning and complained that their training courses were being adversely affected by the extreme hot and cold temperatures generated by the air conditioning.

Despite these complaints, Epcot entered into a further agreement with Regus on the same terms and conditions. Epcot continued to make complaints about the air conditioning system. Regus did not take any effective steps to repair the air conditioning and negotiations between the parties failed to resolve the problem. Regus then suspended services to Epcot and claimed unpaid fees up to and end of the agreed term.

Epcot counter-claimed for, amongst others, damages for loss of profits, loss of the opportunity to generate profits, and for distress, inconvenience and loss of amenity suffered by reason of Regus’ failure to provide adequate air-conditioning.

Regus’ usual terms and conditions included an exclusion clause (Clause 23) limiting Regus’ liability in any circumstances for “loss of business, loss of profits, loss of anticipated savings, loss of or damage to data, third party claims or any consequential loss.” Clause 23 also limited liability in respect of other losses, damages, expenses or claims.

The judge found that the air-conditioning was defective and that Regus was in breach of contract. In addition the judge held that Clause 23 amount to a total exclusion of any remedy at all and therefore was unreasonable and unenforceable under UCTA.

Was the judge correct to hold that Clause 23 was unreasonable and breached the UCTA?