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Can defendants avoid or limit their liability through contractual provisions?

March 15, 2022

Can defendants avoid or limit their liability through contractual provisions?

The following article was contributed by Valerie Blacker and Jon Na, of Piper Alderman. Applicants often confront the proposition, which respondents typically use in their defense, that terms in consumer contracts will effectively exclude or restrict the claims that have been brought. The High Court of Australia recently weighed in on this issue, deciding that a mortgage contained an enforceable promise by the borrowers not to raise a statutory limitation defense in relation to a claim by the lenders, which was commenced out of time. Price v Spoor [2021] HCA 20 In a slight twist to the typical scenario, the lenders were the plaintiffs who brought recovery proceedings after the expiry of the period stipulated in Queensland’s Limitation of Actions Act 1974. The borrowers argued no monies were owed because the claim was well and truly statute barred. Proceedings should have been brought by 2011, but the lender did not file a claim until 2017. In reply, the lender relied on this clause in the contract: “The Mortgagor covenants with the Mortgage[e] that the provisions of all statutes now or hereafter in force whereby or in consequence whereof any o[r] all of the powers rights and remedies of the Mortgagee and the obligations of the Mortgagor hereunder may be curtailed, suspended, postponed, defeated or extinguished shall not apply hereto and are expressly excluded insofar as this can lawfully be done.” The effect of which was said to be a promise not to take the limitation point. The lender’s argument failed at first instance (before Dalton J) but was overturned on appeal (by Gotterson JA on behalf of Sofronoff P and Morrison JA) and then ultimately vindicated by the High Court (Kiefel CJ and Edelman J, with whom Gageler, Gordon and Steward JJ agreed). The public policy principle Part of their Honours’ reasoning was that what is conferred by a limitations statute is a right on a defendant to plead as a defense the expiry of a limitation period. A party may contract for consideration not to exercise that right, or to waive it, as a defendant. That is not contrary to public policy. This, in our view, is akin to agreements frequently entered between prospective parties to a litigation to toll a limitation period (suspend time running) for an agreed amount of time. That can be contrasted with a clause in an agreement that imposes a three- year time limit instead of six, for bringing a claim for misleading and deceptive conduct under the Australian Consumer Law.[1] Clauses of that kind are unenforceable based on a well-established principle that such clauses impermissibly seek to restrict a party’s recourse to his or her statutory rights and remedies, contrary to law and public policy. The “public policy principle” was first identified by the Full Court of the Federal Court in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546. Henjo has been referred to and applied in numerous cases since, and cited with approval in the High Court.[2] This is not to say that contractual limitations can never be effective in limited circumstances – this much was shown in Price v Spoor. The question of whether commercial parties to a contract can negotiate and agree on temporal or monetary limits while not completely excluding the statutory remedies for misleading and deceptive conduct claims under section 18 of the ACL remains debatable[3]  – but those specific circumstances do not arise here. About the Authors: Valerie Blacker is a commercial litigator focusing on funded litigation. Valerie has been with Piper Alderman Lawyers for over 12 years. With a background in class actions, Valerie also prosecutes funded commercial litigation claims. She is responsible for a number of high value, multi-party disputes for the firm’s major clients. Jon Na is a litigation and dispute resolution lawyer at Piper Alderman with a primary focus on corporate and commercial disputes. Jon is involved in a number of large, complex matters in jurisdictions across Australia. For queries or comments in relation to this article please contact Kat Gieras | T: +61 7 3220 7765 | E:  kgieras@piperalderman.com.au — [1] For example in Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246 [2] For example in IOOF Australia Trustees (NSW) Ltd v Tantipech [1998] FCA 924 at 479-80; Scarborough v Klich [2001] NSWCA 436 at [74]; MBF Investments Pty Ltd v Nolan [2011] VSCA 114 at [217]; JJMR Pty Ltd v LG International Corp [2003] QCA 519 at [10]; JM & PM Holdings Pty Ltd v Snap-on Tools (Australia) Pty Ltd [2015] NSWCA 347 at [55]; Burke v LFOT Pty Ltd [2002] HCA 17 at [143]. [3] For example in G&S Engineering Services Pty Ltd v Mach Energy Australia Pty Ltd (No 3) [2020] NSWSC 1721.

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Institute for Legal Reform Urges EU Clampdown on Litigation Funding

By John Freund |

As debate over third-party litigation funding (TPLF) continues to intensify globally, new pressure is being applied at the European level from business and industry groups calling for tighter oversight. A recent submission from a U.S.-based advocacy organization urges EU policymakers to take coordinated action, framing litigation funding as a growing risk to legal certainty and economic competitiveness across the bloc.

An article from Institute for Legal Reform outlines a formal letter sent to senior EU officials calling for harmonized, EU-wide regulation of third-party litigation funding. The Institute argues that the rapid expansion of TPLF—particularly in collective actions and mass claims—has outpaced existing regulatory frameworks, creating what it characterizes as opportunities for abuse. According to the submission, funders’ economic incentives may distort litigation strategy, encourage speculative claims, and exert undue influence over claimants and counsel.

The letter specifically urges institutions such as the European Commission and the European Parliament to introduce transparency and disclosure requirements around funding arrangements. The Institute also advocates for safeguards addressing funder control, conflicts of interest, and capital adequacy, suggesting that inconsistent national approaches risk regulatory arbitrage. In its view, the EU’s Representative Actions Directive and broader access-to-justice initiatives should not be allowed to become conduits for what it calls “profit-driven litigation.”

The submission reflects a familiar narrative advanced by business groups in the U.S. and Europe, linking litigation funding to rising litigation costs, forum shopping, and pressure on corporate defendants. While the Institute positions its recommendations as pro-consumer and pro-rule-of-law, the letter has already drawn criticism from funding advocates who argue that TPLF improves access to justice and levels the playing field against well-resourced defendants.

Case Developments Commercial

Siltstone Capital Reaches Settlement with Former General Counsel

By John Freund |

Litigation funder Siltstone Capital and its former general counsel, Manmeet “Mani” Walia, have reached a settlement resolving a trade secrets lawsuit that had been pending in Texas state court. The agreement brings an end to a dispute that arose after Walia’s departure from the firm, following allegations that he misused confidential information to establish a competing business in the litigation finance space.

As reported in Law 360, Siltstone filed suit in late 2025, claiming that Walia, who had served as general counsel and was closely involved in the company’s internal operations, improperly accessed and retained proprietary materials after leaving the firm. According to the funder, the information at issue included sensitive business strategies and other confidential data central to Siltstone’s competitive position. The lawsuit asserted claims under Texas trade secrets law, along with allegations of breach of contract and breach of fiduciary duty tied to confidentiality and restrictive covenant provisions.

Walia disputed the allegations as the case moved forward, setting the stage for what appeared to be a hard-fought legal battle between the former employer and its onetime senior executive. However, before the dispute could be fully litigated, the parties opted to reach a negotiated resolution. Following the settlement, Siltstone moved to dismiss the case with prejudice, signaling that the matter has been conclusively resolved and cannot be refiled.

The specific terms of the settlement have not been made public, which is typical in cases involving alleged trade secret misappropriation. While details remain confidential, such resolutions often include mutual releases of claims and provisions aimed at protecting sensitive information going forward.

Commercial People Moves

Burford Capital Makes Strategic Entry into South Korea

By John Freund |

Litigation funder Burford Capital is expanding its footprint in Asia with its first senior hire in South Korea, marking a strategic move into a jurisdiction it sees as increasingly important for complex commercial and arbitration disputes. The firm has appointed Elizabeth J. Shin as Senior Vice President and Head of Korea, with responsibility for leading Burford’s activities in the market and developing relationships with Korean corporates and law firms.

Law.com reports that Shin joins Burford from Lee & Ko, where she was a partner in the firm’s international arbitration and global disputes practice. Her background includes advising on high-value cross-border commercial disputes, intellectual property matters, and arbitration proceedings across a range of industries. Burford has positioned her experience as a key asset as it looks to support Korean companies pursuing claims in international forums and managing the cost and risk of major disputes.

The hire reflects Burford’s view that Korea represents a growing opportunity for legal finance, driven by the country’s sophisticated corporate sector and increasing involvement in international arbitration and complex litigation. By establishing a senior presence on the ground in Seoul, Burford aims to provide local market insight alongside its capital and strategic expertise, while also raising awareness of litigation funding as a tool for dispute management.

Korea has traditionally been a more conservative market for third-party funding compared with jurisdictions such as the US, UK, and Australia, but interest in alternative dispute finance has been gradually increasing. Burford’s move signals confidence that demand will continue to grow, particularly as Korean businesses become more active in global disputes and seek flexible ways to finance large claims.