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Disclaimers – When can you rely on them?

Business, Governance

We have all come across disclaimers of some sort. Whether a ‘use at own risk’, ‘don’t try this at home’ or ‘check with your doctor/lawyer before acting upon this information’, the concept isn’t new to us. Yet how much can we really rely on these? At what point can people disclaim their own liability, and when do they have to take responsibility for their actions and advice?

 

 

Where do you start?

A core starting point begins with section 9 of the Fair Trading Act 1986 which disallows anyone in trade, from engaging in conduct which is misleading or deceptive or likely to mislead or deceive. If someone can show that they merely passed on the information, with no reason to believe that it was misleading or deceptive, then such a disclaimer may be relied upon.

 

What are some examples?

In the case of Goldsboro v Walker, Mr Oborn wished to buy a motel. He was initially declined but he tried again, but named his mother-in-law as the purchaser, and forged her signature. His solicitor, Mr Fleming, sent the agreement to the solicitors, but Mr Oborn never completed the purchase. In the Court of Appeal, Mr Oborn was found to be in breach of section 9 as he was not merely passing on the information, but represented that he was acting for the mother-in-law. It did not matter that he thought the assertion to be true.

 

What if you just “convey” information?

This is where the concept of passing over information comes into play. The case law suggests that if someone clearly communicates that the information they are giving has not been assessed by them, but is merely passed on, they can exclude their liability.

The Supreme Court in Red Eagle Corporation Ltd has emphasised that unless it is clear that the information has been passed on from another source, the conveyor takes the risk that the information will be understood to be personal knowledge. Informing the recipient gives them the opportunity to seek further advice and information.

Conveyors should be careful not to get involved in the information if they wish to keep the safety of the disclaimer. In Watson v Gilbert, despite putting a disclaimer in the financial information, the defendant was held to be more than a mere provider of information as he introduced the plaintiff to the investment programme and encouraged the investment.

 

What does that mean for us?

If you are receiving information that comes with a disclaimer, you will generally have to accept that they have distanced themselves from liability. It will be your responsibility to do further research. However if they haven’t clearly explained that the information they are giving to you has been sourced from elsewhere, and that they haven’t been involved with it i.e. edited/added to the words, included the words in their own pamphlets etc., then you may be able to consider it as personal knowledge. If the information turns out to be incorrect, then you may be able to make a claim against them.

It is also worth keeping in mind that there may be specific rules that apply to you based on the type of industry you are in.  For example, Real Estate Agents are subject to rules around their conduct and it is difficult for them exclude those professional duties.  If you are uncertain about what applies and what you can exclude by way of a disclaimer then we would be happy to discuss with you to clarify.

 

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Please contact Steven Moe at Parry Field Lawyers (348-8480) stevenmoe@parryfield.com

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