Gore v Van der Lann [1967]

Gore v Van der Lann [1967] 2 QB 31 concerned whether the defendant (Liverpool Corporation) was entitled to a stay of proceedings under section 41 of the Supreme Court of Judicature (Consolidation) Act 1925.

Liverpool Corporation issued free bus passes to pensioners, and recipients were required to waive the liability of the corporation's employees. In this case, an elderly woman fell while boarding a bus and subsequently sued the bus conductor for damages. The Liverpool Corporation sought to have the elderly woman's action stayed, arguing that their liability was excluded by the waiver.

The Court of Appeal rejected the application for a stay. Harman LJ held that the Liverpool Corporation was not liable to indemnify the bus conductor for any compensation payable to the injured woman. Consequently, the Liverpool Corporation did not have a legal interest entitling it to relief in the form of a stay of proceedings.

Harman LJ's decision emphasised that the exclusion of liability benefiting a third party (in this case, the Liverpool Corporation) could not be enforced by a contracting party (the bus conductor) through a stay in the proceedings. The waiver of liability by the pensioners did not confer any legal right on the bus conductor to seek a stay.

The ruling implies that even though the pensioners had waived the corporation's liability, this waiver did not automatically extend to protecting the bus conductor from legal action. The liability waiver did not create a direct relationship between the bus conductor and the pensioners, and, therefore, the Liverpool Corporation had no basis for seeking relief in the form of a stay.

This case underscores the principle that contractual terms excluding or limiting liability, especially those benefiting third parties, cannot be invoked by contracting parties to prevent legal proceedings initiated by third parties. The decision reinforces the idea that the rights and obligations arising from a contract are generally confined to the parties involved in the contract itself, and attempts to rely on exclusion clauses for the benefit of third parties may not be legally enforceable in certain contexts.
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