There is an issue guaranteed to send a shiver down every litigation solicitor’s back. That is, the issue of limitation.
I am not referring to the criminal law where there is no statute of limitations. I am referring to the civil law.
What is the time limit within which a party must bring a civil claim before it becomes statute barred. In other words the date after which it is not possible to bring the claim at all. This can be extremely complicated There are different limitation periods for different types of legal action. For example, in personal injury claims, the limitation is three years from the date of the accident. In a normal contract claim, the limitation date is six years.
If the contract was made by deed, for example a mortgage, the limitation period is 12 years. In other words, if someone defaulted on their mortgage with the result that the property was repossessed by a bank, and there turned out to be a shortfall in the mortgage, the bank would have 12 years from the default, to recover that money.
The most important issue to be determined by lawyers, is when does the time start to run.
In a breach of contract claim, that period is relatively easy to work out. It starts to run from the date the contract was breached. That in itself can open a can of worms because there is often argument between lawyers as to when the contract actually was breached.
In a negligence claim other than for personal injury, the limitation is within six years and in general, that six year period runs from the date the damage was suffered. Therefore, for example, if a solicitor failed to issue proceedings within the six year limitation period, a client would have a claim against that solicitor which would not be statute barred until a period of six years has elapsed from the date the first set of proceedings should have been issued.
In the case of personal injury or death, the limitation period of three years does not start to run until the later of either the date of the injury being caused, or the date of knowledge that an injury has been caused. For example, in claims for personal injury for asbestos poisoning, the three year limitation period would often not start to run for perhaps 30 or 40 years after the exposure to the asbestos took place. If a landlord is claiming arrears of rent, then the limitation date expires six years from the date the rent became due. Therefore, any rent arrears owing prior to the six year period are statute barred.
In a claim for fraud, the time does not begin to run until the fraud has been discovered. In a claim for libel or slander, the limitation date is within one year of the cause of the action accruing.
There are also a number of statutory exceptions to all of the above. For example, in a claim for criminal injuries, the limitation period is two years. In respect of some negligence claims, it may be possible to bring a claim outside the six year limitation, if the damage or complaint was not discovered until after the expiry of that period. This is known in legal terms as ‘latent damage’.
In the case of Hamlin v Edwin Evans, a claim was made against a surveyor for a negligent survey which had been carried out in 1986. In 1987 dry rot was discovered and a small payment was made by the surveyor to the owner to compromise the claim .
However serious structural defects were later discovered in 1992 and legal proceedings started in 1994 for a much larger claim.
By then more than eight years had passed from the date of the impugned survey report and more than six years from the discovery of the dry rot.
The Court of Appeal held the later claim to be time barred on the basis of only one such cause of action, namely the initial report and it accrued when damage either great or small was suffered for the first time. Time ran from the discovery of the dry rot and therefore the claim for structural defects was statute barred. Harsh indeed for the house owners.
If you obtain a judgement against someone, you have six years to enforce that judgement, after which time your right is extinguished.
Why have a limitation date at all?
The aim of the Limitation Act is to prevent defendants being oppressed by stale claims where for example evidence may have disappeared, to encourage claimants who have good claims to pursue them diligently and to bring certainty and finality to disputes.
That is a laudable aim but can conflict with a need to do justice in individual cases and it can mean that a rogue defendant can escape liability.