The Court of Appeal upheld the High Court’s decision in EE’s £24.6million breach of contract claim against Virgin Media in EE Ltd v Virgin Mobile Telecoms Ltd [2025] EWCA Civ 70.

In January 2024, Geldards reviewed the High Court’s decision to dismiss EE’s claim against Virgin Media.

The main question for the Court was whether the claim brought by EE had been excluded as being one “in respect of … anticipated profits”, on the proper interpretation of an exclusion clause in the contract between the parties.

In that decision, the High Court ultimately concluded that EE’s claim should be struck out; as the loss EE was attempting to claim for, had been excluded under the exclusion of the loss of anticipated profits, in the contract.

However, EE maintained that the claim should not be excluded and appealed the High Court’s decision. EE argued the grounds for appeal were:

(1)  the claim was one for the diminution in the price payable under the contract, and not lost profits; and

(2)  that the judge was wrong to construe the exclusion clause as barring EE’s claim for damages.

Court of Appeal’s decision

The Court of Appeal (CoA) upheld the High Court’s decision to strike out EE’s claim for charges it lost because of Virgin’s breach of an exclusivity clause. By majority, the COA held that EE’s claim was one for “anticipated profits” and, with that, fell within the wording of the exclusion clause contained in the relevant contract.

In reaching this decision, the key conclusions reached by the CoA were as follows:

(a)  There is no overarching principle that limits an exclusion of liability for loss of anticipated profits to only losses other than expectation loss or diminution in price. EE relied on previous cases in which exclusion of claims for loss of profits had been construed as not extending to claims for diminution in price, or as limited to claims for loss of profits outside of the contract. The CoA concluded these cases could be distinguished on their facts and that in some cases, similar wording has been found to be limited, but in other cases, it has not; and

(b)  The wording of the exclusion clause in the contract was clear and unequivocal, and the clause was part of a lengthy, bespoke contract that was drafted with the benefit of the assistance of legal advice.

The CoA also considered how EE had remedies other than damages available under the contract, such as injunctive relief.

Dissent

Lord Justice Phillips, dissenting, set out that while there was no positive obligation on Virgin Media to use EE’s services, the key contractual obligation on Virgin Media was the exclusivity provision supported by a minimum revenue commitment. In his judgment, he concluded it would be surprising if the parties intended that Virgin Media could divert customers to a third-party supplier, in an alleged breach of the contract, without incurring liability to pay EE damages reflecting the loss of revenue resulting from that breach.

Comment

The negotiation of exclusion clauses is an integral part of pricing and risk allocation for parties. In this case, the contract was considered a bespoke, lengthy and detailed contract, and with that, while the Court scrutinised the drafting of the clause using the ordinary methods of contractual interpretation, they acknowledged that detailed consideration had gone into the risks and rewards of each party. This case therefore serves as a costly reminder of the Court’s approach to enforcing exclusion clauses which, as in this case, can leave a party barred from bringing a claim for damages.

If you require any support in drafting or reviewing exclusion clauses (or even interpreting them), please get in touch with our Commercial Team who would be happy to assist.