What happened in the case of EE Ltd v Virgin Mobile Telecoms Ltd [2025]
Under a telecommunications supply agreement Virgin Mobile agreed to use EE’s network exclusively for 2G, 3G and 4G services. After failing to agree terms for 5G, Virgin entered into a deal with another provider and migrated customers away from EE, which EE alleged was a breach of the exclusivity clause in the agreement.
EE claimed damages for lost revenue of around £25 million. Virgin argued that the claim was prevented by an exclusion clause in the agreement excluding liability for “anticipated profits.”, however, EE argued that the losses were “charges unlawfully avoided” rather than lost profits.
The High Court struck out EE’s claim, with the judge stating that the core of the claim was that EE sought to recover the profits it would have earned had the Virgin customers, allegedly diverted to other networks in breach of the agreement, used EE’s services in accordance with the supply agreement. The Court of Appeal upheld that decision. It held that EE’s loss was properly characterised as a claim for anticipated (i.e., expected) profits, which fell squarely within the exclusion clause.
Read more on the judgement here – EE Ltd v Virgin Mobile Telecoms Ltd [2025]
The Court’s reasoning
- The clause was part of a carefully negotiated commercial contract, and therefore respected how the parties chose to allocate risk.
- “Anticipated profits” was interpreted in an ordinary way, meaning profits a party expected to make but lost because of the breach.
- The court said there is no special rule limiting “loss of profits” clauses to only certain kinds of profit loss.
- The court rejected the argument that EE was left without a remedy, noting that other types of claims (such as wasted costs) could still be brought.
Key takeaway: The Court of Appeal confirmed that an exclusion of “anticipated profits” can extend broadly to cover other kinds of loss, including diminution in price, unless clearly drafted otherwise.
What this means in practice
For suppliers:
- Clauses that exclude “loss of profits” are still a strong protection and can cover a wide range of claims.
- Courts are likely to respect how the contract divides risk, especially where it has been carefully drafted, and with the oversight of lawyers.
For customers:
- You can’t get around an exclusion clause just by calling your loss something different (for example, “loss of value” instead of “loss of profits”).
- If you want to keep the right to claim your expected losses if the contract is broken, this must be clearly stated in the contract.
Drafting tips
- If you want broad protection: Use clear, wide wording like “loss of profits, revenue, anticipated savings, or expected losses (including loss of value)”.
- If you want to limit the clause: Clearly explain the difference between types of loss (for example, direct loss of profits vs expected losses under the contract).
- Important point: Think about keeping key remedies for serious breaches so that you’re not left without a meaningful claim if something does go wrong.
How Moore Barlow can hep
Our Commercial Contracts lawyers work with you to fully understand the legal risks and your specific requirements involved in your commercial transaction, both in terms of the day-to-day running of your business as well as those events you hope will never happen but nonetheless must be planned for. We will document your commercial arrangement so that you have commercial certainty, your commercial interests are protected and the value in your business is preserved.
