Limitation, limitation, limitation

20 November 2017

A claimant should not delay in obtaining legal advice about a dispute.

A claimant in a case does not have an indefinite amount of time to issue proceedings in court. limitation periods exist to place time limits on the period within which a claimant can commence legal proceedings. The relevant time limits are set out in the Limitation Act 1980.

Litigators are obsessed with limitation, and for good reason. Miss the limitation deadline and your case may be doomed to fail. When I was training as a solicitor, my training principal provided me with a stash of large sticky labels with ‘limitation’ written in bold red letters which I had to complete and place on the front of each of my files.

Times have moved on and the old paper client files have been replaced with electronic case management systems. It still remains that one of the first things that any good litigator will check is whether his client’s case is, or shortly will be, subject to limitation issues.

If a claimant has not been involved in litigation before, they may well have no idea about the applicable time limits. Some claimants may not realise that they have rights of redress available to them in the civil courts at all. Therefore, it is not at all unusual for a claimant to approach a solicitor when the limitation deadline in his case is fast approaching. This is especially so in professional negligence claims when it is not always immediately clear to a claimant that the advice provided by his professional was potentially negligent advice.

In claims for professional negligence, a 6 year time limit applies for bringing a claim and that 6 year period runs from the date on which the claimant can be said to have suffered loss resulting from the negligent advice. There is also another possible way of calculating limitation in professional negligence cases, which runs independently from the 6 year period. This is a 3 year time period running from the date upon which a claimant can be said to have gained knowledge that he has suffered loss from negligent advice or when he ought reasonably have known that he had suffered loss. This 3 year period is subject to a 15 year long stop.

The difficulty is that, depending on the type of case, the date on which the loss occurred or the date on which a claimant can be said to have ought to have known that he had suffered loss, is not always straightforward and there is a significant body of case law demonstrating this.

The clock will stop ticking for limitation purposes as soon as proceedings are commenced at court. In 2015 court fees increased significantly. Prior to then, when a limitation deadline approaching, it was common to for a claimant to issue protective proceedings, which meant that the claim was started at court but was then put on hold whilst investigations and, often, settlement discussions continued. Dealing with the proceedings in this way managed the risk of a claim falling foal of limitation and gave a claimant more time to fine tune his case. Proceedings that have been commenced at court can be amended later with the permission of the Court except that permission will usually not be granted where the proposed amendment would be to add a fresh cause of action to those proceedings which would time barred.

Now that court fees are so much more expensive, claimants are often reluctant to issue protective proceedings. As such, the courts are seeing an increase in the number of standstill agreements reached between parties. Standstill agreements are contracts in which the claimant and defendant agree that time for limitation purposes will not run from a certain date, for a fixed time, while both parties investigate the claim. They are an advantage to both parties because the costs associated with issuing proceedings are avoided, including the hefty court fee. However, it is important to ensure that a standstill agreement is properly drafted. The recent case of Russell & Anor v Stone (t/a PSP Consultants) & Ors [2017] EWHC 1555 (TCC) (29 June 2017) demonstrates the difficulties that can arise when a standstill agreement is drafted ‘clumsily’.

In short, limitation can be an extremely complex issue. There are many reasons why a case should be investigated sooner rather than later but the most compelling of all is to consider and, where possible, address limitation.

The Dispute Adviser

A legal blog by Melissa Worth
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