If you start a sentence with an intra-clause reference, the cross-reference does not start automatically with a capital letter. In case of context-based reference, you can force a capital letter by using §Liability instead of §liability, but this is not possible with numbers.
With a cross-reference such as §liability or §#liability, it is easy to indicate as a user that capitalisation is required — you simply have to change the initial letter into a capital. Unfortunately, that is not possible for number-based intra-clause references such as §1 or §2.3.
The solution is to use @capitalize(§1) in those cases!