Limitation of actions

    _{Lecture 2. Limitation of actions} 

    2.1   Limitation periods

    The rules on limitation of actions are laid down in the Limitation Act 1980, as amended, in particular, by the Latent Damage Act 1986. The rules provide a series of different periods in respect of different causes of action. They must also be read in conjunction with a number of specific statutes, which lay down shorter periods, in particular, those for claims arising out of international trade or travel. There are also specific procedural rules applicable to individual types of action which lay down different periods - often very short periods - as, for example, under CPR, r. 54.5, by virtue of which an application for judicial review must be made within three months of the event complained of, and applications in respect of unfair dismissal for which an application must be lodged at the Central Office of Employment Tribunals within three months of the event claimed to constitute unfair dismissal. Another example is applications for new business tenancies under the Landlord and Tenant Act 1954, s. 24, which must be lodged not less than two months nor later than four months after the landlord's notice of termination (Landlord and Tenant Act 1954, s. 29(3)).

    Limitation is a procedural defence. The court will not take a limitation point of its own volition and the defence must be specifically alleged by a party wishing to rely on it (CPR, PD 16, para. 1). If successfully claimed, it is a complete defence.

    The basic time limits are as follows:

1. For all actions in contract—six years.
2. For actions for recovery of land or for the recovery of money secured by a mortgage—12 years.
3. Actions by beneficiaries to recover trust property or in respect of breach of trust—six years.
4. Actions in tort not involving personal injuries—six years.
5. Actions involving personal injuries—three years.
6. Actions under the Defective Premises Act 1972—six years from completion of the house (Defective Premises Act 1972, s. 1(5)).

    2.2  Miscellaneous exceptions to the rule 

    2.2.1 Under the Human Rights Act 1998

    By s. 7(5) of the Human Rights Act 1998 a person who claims that a public authority has acted in a way which is made unlawful by the Act and who wishes to bring proceedings must do so before the end of:

1. the period of one year beginning with the date on which the Act complained of took place; or
2. such longer period as the court or tribunal considers equitable having regard to all the circumstances.

    This is subject to any rule imposing a stricter time limit in relation to the procedure in question so, for example, if a claim were to be added to an application for judicial review the time limit would be that for judicial review (three months). 

    2.2.2 Defamation

    Actions in respect of defamation must be brought within one year (Limitation Act 1980, s. 4, as amended by the Defamation Act 1996). 

    2.2.3 Consumer Protection Act 1987

    Actions under the Consumer Protection Act 1987 must normally be brought within three years of suffering the relevant damage, or within three years of acquiring the necessary knowledge of the facts to sue if later. However, there is an absolute cut-off date of 10 years from the date the product was first put into circulation (Consumer Protection Act 1987, s. 5(5) and sch. 1). This relates only to claims in respect of the strict liability under the Act. If the actions in question also amount to negligence, the more generous limitation period of three years from date of knowledge applies, even if that should be outside the 10-year period. 

    2.2.4 Latent Damage Act 1986

    The Latent Damage Act 1986 inserted a new s. 14A in the Limitation Act 1980. This applies to negligence actions other than for personal injuries. It has a particular application in claims relating to defective buildings but may also cover other kinds of claims, e.g., against solicitors for negligent drafting of documents. The practical scope of these provisions, which were viewed as of great importance at the time, has been reduced by the overruling of the former leading authority, Anns v Merton London Borough Council [1978], by the case of Murphy v Brentwood District Council [1991]. Section 14A provides for two alternative periods:

1. six years from accrual of cause of action; and
2. three years from the 'starting date'.

    Both these periods are subject to a final cut-off period of 15 years.

    (a) Accrual

    Damage accrues when it is initially suffered. So in the case of an action against a solicitor for negligently drafting a will, the claimant's cause of action accrues when the will takes effect.

    (b) Starting date

    The period of three years runs from the earliest date on which the claimant was

aware of the following:

    (i)    that the relevant damage was sufficiently serious to justify commencing

proceedings;

2. that the damage was attributable to the negligence of the defendant; and
3. the defendant's identity.

    The Limitation Act 1980, s. 14B, provides a 15-year final cut-off date for negligence actions, after which such actions shall not be brought even if the cause of action has not yet accrued or the starting date has not yet arrived. The 15-year period runs from the actual act or omission constituting the negligence resulting in the claimant's damage (e.g., in the case of solicitors drafting a will negligently, from the date on which the will was drafted or executed). 

    2.3   Personal injuries and fatal accidents

    The law on limitation periods for damages for personal injuries and fatal accidents is now contained in ss. 11-14 of the Limitation Act 1980 as supplemented by s. 33 of that Act, which gives the court a discretion to disregard the prima facie time limits. The three-year period of limitation for personal injuries applies to:

    any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision).

    It follows, therefore, that the reduced limitation period of three years applies in respect of the personal injuries caused by breach of contract just as much as to those caused in a road or factory accident. In Stubbings v Webb [1993] AC 498, it was held that where an action for personal injuries was based on trespass rather than negligence, the longer period of six years applied. This overruled the old authority of Letang v Cooper [1965].

    The term 'personal injuries' is defined to include any disease and any impairment of a person's physical or mental condition (Limitation Act 1980, s. 38(1)). Whether distress and injury to feelings, where they do not amount to impairment of a mental condition in a defined medical sense, come within the Act is undecided.

    In personal injury cases, time initially begins to run on the date of the cause of action in negligence. This is an easy enough matter in the case of a physical accident, but in the case of industrial diseases or industrial deafness, which may have occurred over decades early in a claimant's working life, considerable injustice would be caused by a strict three-year cut-off date. Accordingly, the limitation period of three years runs either from the date of the cause of action arising or from the date of the claimant's knowledge of the cause of action if later. If the claimant dies before that period expires, the period survives for the benefit of the estate and becomes three years from the date of death, or the date of knowledge of the personal representative (s. 11(5)). 
 

    2.4.  The discretion to extend the limitation period

    2.4.1 Matters the court will take into account

    In the case of damages for personal injury and death only, the court may still allow an action to proceed notwithstanding that the limitation period has expired (Limitation Act 1980, s. 33). The court has a discretion to extend the time limit if it considers it equitable to do so having regard to the degree to which the ordinary limitation periods would prejudice the claimant and to which any exercise of the power to extend the period would prejudice the defendant. The court must have regard to all the circumstances, including:

1. the length of and the reasons for the delay on the part of the claimant;
2. the effect of the delay on the cogency of the evidence in the case;
3. the conduct of the defendant after the cause of action arose, including his response to any request by the claimant for information;
4. the duration of any disability of the claimant arising after the cause of action;
5. the extent to which the claimant acted promptly and reasonably once he knew of the facts which afforded him a cause of action;
6. the steps taken by the claimant to obtain medical, legal or other expert advice and the nature of any such advice received.

    This provision gives the court a very wide mandate indeed to enquire into all the surrounding circumstances concerning the apparent delay. Although all the factors must be weighed, a key question will be 'the effect of the delay on the cogency of the evidence in the case'. Thus if the case depends on eyewitness recollection, it may be more difficult for the claimant to have the period extended than if there is a wealth of evidence in documentary form, e.g., in the case of a factory accident where there may be prompt reports and statements made at the time, or a conviction of the defendants for breach of regulations made under the Health and Safety at Work etc. Act 1974.

    It should also be noted that the claimant will have to waive his privilege and reveal the nature of the legal advice he asked for and received. The court will thereupon have regard to the question of whether the claimant acted reasonably promptly after he had the relevant advice. The fact that the claimant may have an excellent case against his solicitors in respect of negligent advice or delay is not necessarily relevant. It must be borne in mind that an action against one's solicitors may be less advantageous than an action against the defendant because, after all, those solicitors may have knowledge of the weaknesses of the claimant's original case. 

    2.4.2 The procedure

    Where a claimant wishes to apply to the court to extend the limitation period, there are two main possibilities in terms of procedure. One is for the claimant to apply to the court after the defendant has filed his defence, taking the Limitation Act point for a preliminary hearing on the issue of limitation. The court itself has power of its own initiative under CPR, r. 3.1(2)(i), to 'direct a separate trial of any issue'. An application may therefore be listed and both parties directed to file evidence in the form of witness statements on the issues arising out of the delay. If the limitation point is dealt with at an early stage and is decided in the defendant's favour then, subject to appeals, the case will be over and a good deal of cost saved. Alternatively, and perhaps more commonly, the matter is left to be taken as a preliminary issue at the trial itself. This may be better where it is necessary to investigate a good deal of the factual background including 'the cogency of the evidence' (one of the factors under the Limitation Act 1980, s. 33) and this may be best left until trial. Otherwise there is a risk of duplication with a great deal of the court's time being taken up with repetition of issues. In addition, all the factors in the case may not become apparent until after all the relevant directions, in particular for disclosure of documents, have been carried out. 

    2.5   Disability

    Under the Limitation Act 1980, s. 28, time does not begin to run against a person under a disability until the expiry of the disability. In this context 'disability' means legal disability, and therefore that the potential claimant is either:

1. a child, i.e., a person under the age of 18; or
2. a mental patient, i.e., a person who by reason of mental disorder within the meaning of the Mental Health Act 1983 is incapable of managing and administering his property and affairs.

    Where a claimant suffers from a legal disability, the usual limitation period applicable to the kind of claim will begin to run only at the cessation of that disability. Thus if a mental patient recovers so as to become capable of administering his affairs, time will start to run from that point; in the case of a child time will start to run from his 18th birthday, though in a personal injury case it may be the date of knowledge that is relevant rather than the date of the accident. It may be that a claimant, injured when young, does not obtain the relevant knowledge of the circumstances of the accident, the identity of the potential defendant, etc., until well after his 18th birthday, in which case time will begin to run from then. 

    2.6  The relevant date for the limitation period

    The action that must be taken within the limitation period is the issue of the claim, not its service. Similarly, in Part 20 claims against a new party, what matters is the date on which the Part 20 claim is issued at court (Limitation Act 1980, s. 35(l)(a)).  

    _{Part 20 claims} 

    2.6.1   Introduction

    So far, we have mainly been considering straightforward claims between an individual claimant and an individual defendant where the only matter under consideration is the claimant's cause of action against the defendant. It is now appropriate to consider two further situations, which will complicate the picture procedurally. These are:

1. where the defendant wishes to make a claim of his own against the claimant; and/or
2. where the defendant wishes to bring some claim against some third person, whether because he contends that it is that third person who should pay the claimant's claim in full, or at least contribute to it, or where he has some cause of action against that third person which is in some way connected to the claimant's claim against him.

    These two types of proceedings are, very clumsily, now called 'Part 20 claims' from the part of the CPR, which deals with the procedures. 

    2.6.1.1   Where the defendant wishes to make some claim against the claimant

    This type of claim was called a 'counterclaim' before the CPR and it is probably still convenient to use this term. It can arise either out of the same facts as the claimant's claim or have no factual connection with it. 

    EXAMPLE 1

    There is a road traffic accident and the vehicles of the claimant and defendant are in collision. The claimant commences a claim against the defendant; the defendant does not merely defend that claim, but brings his own counterclaim against the claimant, contending that he was entirely to blame and that he has caused the defendant injury.

    EXAMPLE 2

    The claimant seeks payment of an alleged debt from the defendant. After a meeting at the claimant's offices to attempt to negotiate settlement of the dispute, on his way out the defendant falls down the stairs because of a loose stair-rod and suffers a broken leg. When the claimant issues proceedings seeking payment of the debt it is open to the defendant to counterclaim for damages for personal injuries. 

    A counterclaim may be greater or lesser than the amount of the claimant's claim: it arise out of facts before or after those constituting the claimant's claim; and it car. -be brought about matters arising after the issue of the claimant's proceedings. 

    2.6.3   Defence to counterclaim

    Where a counterclaim is filed and served, it stands in all respects as if it were a claim made by the defendant against the claimant. Accordingly, one cannot simply let it pass unchallenged and the claimant is required in his turn to file and serve a defence to counterclaim setting out what his defence to it is, which must be verified by a statement of truth. 

    2.6.4 Cases where the defendant claims against some other person

    The former term for a case, where the defendant wished to bring some other person into the action was 'third-party proceedings'. This term has not survived into the CPR, but it is probably still convenient to describe the extra party as a 'third party' in this chapter simply for the purpose of clarity. 

    2.6.4.1   When will such proceedings be appropriate?

    They will be appropriate where there is some real connection between the claimant's claim against the defendant and what the defendant is claiming against the third party. No exhaustive test for this is now set out in CPR, Part 20, but the following are illustrations. 

    2.6.4.1.1    Claim for a contribution

    C has been knocked down by a vehicle driven by D. D contends that he was not the only one responsible for the accident because another car driven by T swerved into his path, causing him to mount the pavement and hit C. D may therefore want to join T by a Part 20 claim. The consequence will be that although D will, in the law of tort, remain liable for any damages awarded to the claimant, he may, having paid those damages, be able to obtain a contribution if the court concludes that T bore a share of responsibility for the accident. Of course if in a negligence claim by C, D claimed that T had wholly caused the accident this would provide a complete defence for D and, if the court found that this was the case, D would be exonerated entirely. The action that the claimant should take to cope with this possibility is discussed below. 

    2.6.4.1.2   Claim for indemnity

    C has just bought a new television from a retailer D. When first switched on it explodes, causing a house fire, damaging C's property and causing some personal injury. C issues proceedings against D claiming breach of condition of satisfactory equality. D has a contract with T, the manufacturer of the television, which provides an indemnity for such cases. He would therefore seek to add the manufacturer by a Part 20 claim.

    It should be noted, as a matter of practice, that in this instance it is still open to D to defend the claim on the merits, for example, by contending that the television had been misused or tampered with or that the whole incident had been fabricated. More probably what would happen would be that once the retailer notified the Part 20 claim, the manufacturer T would take over the conduct of the retailer's defence since the manufacturer would be ultimately responsible for any damages found due. The retailer would then in effect, although technically remaining a party to the proceedings, drop out from them and the claim would be carried out between consumer and manufacturer as the person ultimately liable. 

    2.6.4.1.3   Other claims connected with the claimant's claim

    Suppose that C, the claimant, a pedestrian, is knocked down by a vehicle driven by D. D's car goes on to strike a wall and D himself is injured. D contends that the accident was caused or contributed to by another vehicle driven by T which swerved into his path. He will issue Part 20 proceedings against T, seeking not only contribution towards any damages he might be found liable to pay C, but in addition damages for his own claim.