Limitation of Actions Part III [2001] EWLC 270(3) (09 July 2001)

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Cite as: [2001] EWLC 270(3)

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PART III

REFORM I: THE CORE REGIME

1. introduction

In this Part we consider the main components of the recommended core regime, namely:-

(1) When should time start to run in relation to a claim?

(2) How long should the primary limitation period be?

(3) The long-stop limitation period.

(4) The factors extending or excluding the limitation periods.

(5) Should the court have a discretion to disapply a limitation period?

(6) Agreements to change the limitation period.

It may prove helpful, first, to explain what we mean by "claim". We are concerned with the case where the claimant is bringing legal proceedings to seek a form of relief from the defendant. Relief for these purposes may fall into one of the following three categories:

(1) a remedy for a wrong;

(2) restitution; or

(3) the enforcement of a right.

Claims for a remedy for a wrong will include any claims for damages for a breach of duty by the defendant (such as a claim for damages for negligence or for breach of contract). Restitutionary claims will include any claim for unjust enrichment (such as for the recovery of money paid under mistake). Claims for the enforcement of a right will include any claim by the claimant to enforce rights under a contract (such as a claim for specific performance or to recover the price), or to receive any money or other benefit conferred by statute (such as a claim for compensation for compulsory purchase).

Our recommendations do not extend to those cases where the claimant is bringing an administrative application - such as an application for the appointment of a new trustee, or where a trustee seeks directions from the court as to the exercise of his functions under the Settled Land Act 1925 in relation to a trust or trust property.

2. when should time start to run?

(1) The Date of Knowledge

In our Consultation Paper, we set out five options to be considered as the general starting point for the limitation period, ranging from the date of accrual of the cause of action to the date of 'discoverability', whereby the starting point for the limitation period would be decided by reference to the date the claimant has or ought to have knowledge of the cause of action.

The great merit of the date of discoverability, or 'date of knowledge' (the label used in the Limitation Act 1980)

We recommend that the primary limitation period should start to run from the 'date of knowledge' rather than, for example, the date the cause of action accrues (Draft Bill, Cl 1(1)).

^[3]

(2) Definition of the Date of Knowledge: The Relevant Facts

In the Consultation Paper,

factual

(1) knowledge of the facts establishing the cause of action;

(21) knowledge of the identity of the defendant; and

(3) knowledge that the cause of action is significant.

(a) The facts establishing the cause of action

Over seventy per cent of consultees who commented on this provisional proposal agreed that at least the first two factual elements proposed for the date of knowledge, namely knowledge of the facts establishing the cause of action and knowledge of the identity of the defendant, should be included in the definition. A small minority expressed concern that the phrase 'cause of action' is ambiguous in this context, leaving it unclear precisely what facts the claimant needs to know before the limitation period starts to run. We have considered whether it is possible to express this concept more precisely by providing exactly what facts a claimant must know in relation to a particular cause of action. However it has proved impracticable to identify exactly which facts would be relevant in relation to every single cause of action which will be covered by the regime we propose. We remain of the view that "the facts giving rise to the cause of action" is a sufficiently clear concept to indicate in any one case what the claimant needs to know to start time running.

Our recommendations, therefore, differ from the position under the current law, where the constituent elements which the claimant needs to know before time starts running against him or her are set out in detail in sections 14 and 14A of the Limitation Act 1980. The problems to which this has given rise are illustrated in Dobbie v Medway Health Authority.

The Court of Appeal upheld the trial judge's decision that within three years of the operation the claimant had knowledge of all the relevant facts and that her claim was therefore time-barred. The claimant was aware of the facts required by section 14 of the Limitation Act 1980 as soon as she knew that her breast had been removed by the doctor and that it was not cancerous. She knew, that is, that the injury (the loss of a breast) was significant, that it was attributable to the act alleged to be negligent (the operation performed on her) and the identity of the defendant (the health authority concerned). Whether or not she knew that it would have been possible to pre-test for cancer, and that the act in question could therefore be considered negligent, was seemingly irrelevant. In contrast, under the definition of the date of knowledge which we recommend the claimant would not have actual knowledge of all the relevant facts giving rise to the cause of action until she knew that the lump could have been removed and tested for cancer before her breast was removed.

Similarly, in Saxby v Morgan

In general this element of the definition will require the claimant to know matters of fact, as opposed to matters of law. There will however be an exception to this rule where the claimant's knowledge of his cause of action would be incomplete unless he knows, for example that legal advice on which he has acted is wrong. This is discussed further at paragraphs 3.35 to 3.39 below.

(b) The identity of the defendant

Knowledge of the identity of the defendant is, in general, a straightforward and uncontroversial concept. But under sections 14(1)(d) and 14A(8)(c) of the Limitation Act 1980, special provision is made for cases where the defendant is vicariously liable for the acts or omissions of another person. The claimant must know not only the identity of the (vicariously liable) defendant, but the identity of the person responsible for the act or omission, and the additional facts which support the bringing of proceedings against the defendant. We provisionally proposed that there should be no similar provision in the new Act.

(c) The significance of the claim

We provisionally proposed that the definition of the date of knowledge should incorporate the claimant's knowledge that the cause of action is significant.

Two main issues arise. First, should the test include a requirement that the claimant knows that the claim is significant? Secondly, if so, what is meant by 'significance'?

(i) Should the test for the date of knowledge incorporate knowledge of the 'significance' of the claim?

The majority of consultees recognised that knowledge of the 'significance' of the claim should be included in the definition of the date of knowledge (over eighty per cent agreed with our provisional proposals).

The purpose of including knowledge of the significance of the claim in the definition of the date of knowledge is twofold. First, it delays the start of the limitation period to protect the claimant who has received an injury, or suffered damage or loss, which at first seems trivial when it later becomes clear that the injury, loss or damage is far more serious. Secondly, it reduces the pressure on a claimant who has received a trivial injury or loss to bring proceedings immediately, without waiting to see if the injury or loss gets worse, for fear of being time-barred. Without this assurance the amount of premature litigation could significantly increase.

However, where the extent of the damage suffered by the claimant is apparent either immediately, or by the time when the claimant has knowledge of the other relevant facts, and does not change over time, the claimant should be treated as knowing that the damage is 'significant'. Otherwise the primary limitation period will never be triggered if the claimant had an entirely trivial claim, which would enable the claimant to bring proceedings in respect of that claim at any time before the expiry of the long-stop limitation period, whereas a claimant with a more serious claim would be time-barred after the expiry of the three year primary limitation period.

(ii) The definition of 'significance': subjective or objective?

There is less agreement as to how 'significance' should be defined. We provisionally proposed the following definition of 'significance':

A cause of action should be regarded as significant if a person with the plaintiff's abilities would have reasonably considered the cause of action sufficiently serious to justify instituting proceedings against the defendant, on the assumption that the defendant does not dispute liability and has the resources to meet the claim.^[12]

This definition was primarily objective, but with a small subjective element, allowing the claimant's abilities to be taken into account. It is not as subjective as the test under the current law in relation to personal injury claims (in section 14(3)), or as objective as the test for significance in relation to Consumer Protection Act claims or claims for latent damage not involving personal injury (in sections 14(1A)(a) and 14A(7) respectively).

This objective / subjective mix was accepted by fifty per cent of consultees. However, a minority of consultees objected that the proposed definition was too subjective.

It is acknowledged (p266 fn 68) that no view has been taken as to whether this is confined to intellectual abilities or includes financial abilities. What about psychological 'ability' (e.g. the depressive who can't face litigation) and emotional 'abilities', such as the laudable reaction that one could not bring oneself to sue the old lady next door for subsidence until it was quite unavoidable. What about the employee who reasonably [took] into account his employment position before bringing proceedings (as in McCaffrey, referred to in the paper at p 263, fn 54)? (Andrew Smith J).

One factor which would clearly affect whether a claimant viewed a claim as significant would be the claimant's resources. A claim which to a poor person would be very significant may be trivial to a rich person. However, to take account of this factor would allow rich claimants a longer limitation period than poor claimants, which seems inherently unjust.

It has also been argued strongly that to take any account of the individual circumstances of a particular claimant only serves to increase the uncertainty inherent in the 'date of knowledge' starting point. A defendant would never be able to know when the limitation period had started in respect of any cause of action without also knowing everything about the claimant's character, and circumstances. In addition, it could be argued that a wholly subjective definition of what is 'significant' would allow a claimant who has an injury which gradually worsens to choose when the limitation period should start.

For these reasons, we have concluded that the element of subjectivity that we provisionally proposed should be abandoned and that to protect the defendant from the 'unreasonable' claimant, and to produce greater certainty, the test for significance should be objective: that is, only claims in respect of which a reasonable person would have thought it worthwhile issuing proceedings will qualify as 'significant'. We propose, in other words, to follow the approach of the current law in sections 14(1A)(a) and 14A(7) (that is, in relation to Consumer Protection Act claims and claims for latent damage not involving personal injury).

(iii) The definition of significance: are the present (or any)assumptions necessary?

The test proposed in the Consultation Paper adopted the definition of 'significance' used in the current law for personal injury claims (and for 'materiality' for facts relating to other latent damage negligence claims). This defines 'significance' in terms of whether it is worth bringing proceedings against the defendant. This is the ultimate test for any claim - if it is never thought to be worth asserting a claim in court, that claim cannot have any value. The benefits to the claimant of bringing the claim must outweigh the costs and inconvenience of pursuing it.

Some consultees have suggested that the assumptions that the defendant admits liability and is solvent, which we provisionally proposed in the Consultation Paper should form part of the definition, are unfair to claimants because they set far too low a threshold for 'significance'. It could be said that it is unreasonable for the claimant to decide not to bring proceedings for almost any injury if the claimant can be sure that he or she will recover damages for that injury. While the present test does give the courts some flexibility, we accept that it sets a low threshold.

However it is not possible for the definition of 'significance' to reflect accurately all the factors which would be taken into account in deciding whether or not to bring proceedings. The factors would differ for every claimant. The most important factor, in many cases, would be the chances of success of the claim. To ask the court to decide when the claimant should have known that the claim was more likely to succeed than otherwise would require a trial of the merits of the claimant's case every time the defendant raised a limitation defence. It is also hard to justify giving the claimant a longer limitation period when the defendant is in financial difficulties. Unrealistic though the assumptions undoubtedly are, they provide a measure of protection necessary for defendants.

We have also carefully considered, albeit to reject, some different tests. For example, the definition could provide that a claim is significant if the recoverable damages are (1) more than nominal; (2) more than a fixed sum; or (3) less than a set proportion of the total award. In the first case, we consider that reliance on 'nominal damages' might set too low a threshold. In any event, 'nominal damages' is a legal term of art which, strictly speaking, refers to damages being awarded where there is no loss at all.

The other two possibilities attempt to set a tariff. However it would be extremely difficult to quantify a 'significant' amount which would be considered to be fair. If a sum was identified, it would need to be constantly reviewed (or perhaps index linked). Further it would require the court to ascertain precisely the probable quantum of damages and costs which the claimant might recover at a particular date. This would not necessarily increase the certainty of the definition.

The same objection applies to any attempt to define the significance of the claim by reference to a proportion of the damages recoverable (so that the claim would be insignificant until the claimant knew of at least, for example, loss giving rise to ten per cent of the damages ultimately recoverable). Any percentage chosen would be arbitrary. The court would again be required to calculate the damages which would have been awarded at two different points in time. A more fundamental objection is the fact that, where the claimant has a very large claim, even a small proportion of that claim (such as five per cent) may be a large amount.

We have concluded that there is no alternative to defining 'significance' by reference to the point when the facts establish that it is worth making a claim in civil proceedings. We are, therefore, following the approach of the current law on this issue.

We recommend that the date of knowledge (which is when the primary limitation period should start to run) should be the date when the claimant has (actual or constructive)

^[16] knowledge of the following facts:-

(1) the facts which give rise to the cause of action;

(3) the identity of the defendant; and

(3) where injury, loss or damage has occurred or a benefit has been received, that the injury, loss, damage or benefit are significant. (Draft Bill, Cl 2(1)).

For the purposes of the definition of the date of knowledge, a claimant will be deemed to know that the injury, loss, damage or benefit is significant if

(1) the claimant knows the full extent of the injury, loss, damage suffered by the claimant (or any other relevant person), or (in relation to a claim for restitution) of any benefit obtained by the defendant (or any other relevant person); or

(2) a reasonable person would think that, on the assumption that the defendant does not dispute liability and is able to satisfy a judgment, a civil claim was worth making in respect of the injury, loss, damage or benefit concerned. (Draft Bill, Cl 2(5)).

It should be emphasised that the test for the date of knowledge will not be satisfied until the claimant knows (or should know) each of the matters set out above. In some cases the necessary facts may be discoverable by the claimant at different times. The primary limitation period will not start running against the claimant until the date on which he or she knows (or should know) the last piece of information needed for the "date of knowledge" test.

(3) Definition of the Date of Knowledge: Fact and Law

In the Consultation Paper we discussed, without reaching a provisional view, the part which knowledge of the law should play in the definition of the date of knowledge.

(1) that knowledge for the purposes of the date of knowledge should always include knowledge of the law, including knowledge of one's entitlement to a legal remedy for what has occurred; or

(2) that knowledge should include knowledge of the law only in so far as such knowledge is necessary for the claimant to know all the elements of his or her cause of action (for example, where the claim is for restitution of payments made by a mistake of law, one has to know the true legal position to know that one has made a mistake).

Those consultees who responded on this point were divided on the issue. Approximately thirty per cent agreed with the first alternative proposed, suggesting that this was necessary to do justice to the claimant. As Judge Altman commented, "A plaintiff who has all the elements of knowledge except that of entitlement to a legal remedy may not take proceedings in time." It was suggested that the existence of a long-stop limitation period would provide sufficient protection for the defendant. However, over thirty-five per cent felt that legal knowledge should play no part in deciding when time should start to run against the claimant. A major concern expressed by consultees was that incorporating knowledge of the law in the definition would significantly increase uncertainty as to when the primary limitation period would start running.

We agree that, in general, knowledge of the law should not be relevant. Our view on this has further been influenced by our recommendation, discussed below, that a long-stop limitation period should not apply to personal injury claims, and that the courts should have a discretion to disapply the limitation period for such claims, thereby reducing the risk of injustice to the personal injury claimant.

However, we think that an exception must be made to this rule on the lines suggested in the second alternative: namely where the claimant necessarily has to establish that he or she did not know the law in order to establish that he or she has a claim. It seems to us that there are two such cases: first, claims in respect of incorrect legal advice,

We recommend that, for the purposes of the test for the 'date of knowledge', the claimant is presumed to know the law, so that the claimant's lack of knowledge that the facts would or would not, as a matter of law, give rise to a cause of action shall be irrelevant. (Draft Bill, Cl 2(2)). This will not apply to:

(1) a cause of action in respect of breach of duty where the breach of duty concerned is a failure to give correct advice as to the law, and the fact that correct advice had not (or may not) have been given shall be treated as one of the facts giving rise to the cause of action (Draft Bill, Cl 2(3)); or

(2) a cause of action in respect of restitution based on a mistake of law, and the fact that a mistake of law has been, or may have been, made, shall be treated as one of the facts giving rise to the cause of action. (Draft Bill, Cl 2(4)).

(4) What is meant by 'actual knowledge'?

Should a claimant be treated as 'knowing' a fact if he or she merely believes it to be true but it is not possible to establish it without expert evidence?

We suggested in the Consultation Paper

Spargo v North Essex District Health Authority.

the courts should treat actual knowledge as a subjective concept; and a plaintiff, who so firmly believes that he or she has a significant cause of action against the defendant that he or she goes to a solicitor to seek advice about making a claim, should be regarded as having actual knowledge.^[25]

This approach was supported by around sixty-five per cent of the consultees who commented on this provisional proposal. However, a difficulty with the approach, as some consultees have noted,

We also provisionally proposed in the Consultation Paper that once the claimant has actual knowledge of the relevant facts, that knowledge cannot be lost.

We therefore recommend that 'actual knowledge' should not be defined in the proposed legislation and should be treated as a straightforward issue of fact which does not require elaboration.

(5) What is meant by 'constructive knowledge'?

We provisionally proposed that the primary limitation period should start, in the absence of actual knowledge, on the date the claimant ought to have known the relevant facts; that is, when the claimant could be said to have constructive knowledge. This reflects the position under the current law where the claimant's date of knowledge is relevant to the start of the limitation period.

The tests adopted for the 'date of knowledge' in the Limitation Act 1963, and the Limitation Act 1975 (later the Limitation Act 1980) have always provided for a subjective element in the objective test, in the sense that the question has been what knowledge might the claimant "reasonably have been expected to acquire from facts observable or ascertainable by him; or from facts ascertainable by him with the help of medical or other appropriate expert advice which it is reasonable for him to seek".

The test for constructive knowledge, as provisionally proposed in the Consultation Paper, combined both objective and subjective elements by defining constructive knowledge as "what the claimant in his or her circumstances and with his or her abilities ought to have known had he or she acted reasonably." This proposal was accepted by over fifty-five per cent of consultees. A minority of consultees (around twenty per cent) argued that taking any account of the subjective characteristics of the claimant makes the starting point of the limitation period too uncertain.

An entirely objective test for constructive knowledge, which took no account of either the claimant's characteristics or the situation in which the claimant is placed, could be devised but it is unclear how it would work. Preventing the courts from giving any consideration at all to any characteristic of the claimant (which is what would be required by a wholly objective test) runs counter to the justification for a discoverability test; that the limitation period should only start when the claimant has had a reasonable opportunity to discover the facts which give rise to the cause of action. Although all tests for the date of knowledge provide for the constructive knowledge of the claimant, the purpose of this is to fix the claimant with the knowledge he or she would have had if he or she had acted reasonably, not to fix the claimant with knowledge which he or she could not possibly have. It also creates difficulties for the courts: what resources is the reasonable person supposed to have available to carry out expert investigations? When should the reasonable person be regarded as having the knowledge available to his or her doctors? A test which is completely objective could cause considerable injustice to the claimant, without providing sufficient certainty to compensate for this. We therefore adhere to our provisional view that the test for constructive knowledge should take account of the circumstances and abilities of the claimant in order to do justice to the particular claimant.

The circumstances of the claimant will be relevant to his or her constructive knowledge. The circumstances of the claimant will include the claimant's financial resources, if information could not reasonably be available to the claimant unless expensive expert or other investigations have been carried out. The abilities of the claimant will also be relevant. 'Abilities' for this purpose encompasses any capacity of the claimant which might affect the date on which he or she could be expected to know the relevant facts. Most obviously, the claimant's intellectual abilities will be relevant.

We recommend that the claimant should be considered to have constructive knowledge of the relevant facts when the claimant in his or her circumstances and with his or her abilities ought reasonably to have known of the relevant facts. (Draft Bill, Cl 4(1)(a), 4(2))

(6) Knowledge and Experts

A separate issue is the extent to which the claimant should be considered to have knowledge of information which has been - or should have been - discovered by any expert whom he or she has consulted. We noted in the Consultation Paper

Some consultees however did not agree that an agent's constructive knowledge would not be imputed to the principal under the law on agency, and suggested that, to avoid uncertainty, statutory guidelines are essential.

Two situations should be considered in relation to expert knowledge: the first is where the expert consulted has failed to discover information which is relevant and which a competent expert would have discovered or where the expert has discovered the relevant facts but has failed to pass that information to the claimant. The second is where the claimant has unreasonably failed to consult an appropriate expert.

The purpose of a starting date for the primary limitation period which is founded on 'discoverability' is to ensure that the limitation period does not start running until the claimant knows, or has a reasonable opportunity of knowing, the facts necessary to bring a claim. The interests of the claimant are paramount. The reason that the claimant's constructive knowledge is taken into account is to oblige the claimant to act with reasonable diligence, and to protect the defendant from a claimant who unreasonably fails to investigate his or her claim. It should not result in the limitation period starting at a date when a claimant, who acted entirely reasonably, did not know the facts necessary to bring a claim in respect of a cause of action.

This would suggest that where the claimant has consulted an expert, knowledge of information which the expert should have found out, but did not discover, should not be imputed to the claimant. The claimant has fulfilled his or her obligation to act reasonably to investigate the relevant facts. Unless it becomes apparent to the claimant that there is something wrong with the expert's opinion, the claimant should not be held to have knowledge of information which the expert should have discovered.

Are there any factors to displace this view? The argument for imputing the expert's knowledge to the claimant is that to fail to do so is unjust to the defendant. However, the defendant should not expect to escape his or her liability because of the negligence of a third party. The defendant will, in any event, be protected (at least for claims other than personal injury claims) by the long-stop limitation period ten years after the date of the accrual of the cause of action (or the act or omission giving rise to the cause of action where this is different).

The extent to which the claimant will have a cause of action against an expert for failure either to find out the relevant information, or to inform the claimant of that information is a factor to be taken into account. Where the expert gives advice to the claimant acting as adviser rather than as an expert witness there may be a claim in negligence against that adviser. However, this will not always apply.

This suggests that the simplest, and certainly the most cost-effective, solution

The position changes where the claimant has unreasonably decided not to seek expert advice. Here it is not unfair to the claimant to treat him or her as knowing the facts which an expert would have discovered if the claimant had sought expert advice. Indeed, this knowledge must be attributed to the claimant to protect the interests of the defendant in order to avoid the limitation period being artificially extended by the claimant's inaction.

We therefore recommend that unless the claimant has acted unreasonably in not seeking advice from an expert, the claimant should not be treated as having constructive knowledge of any fact which an expert might have acquired. Where an expert has been consulted, the claimant will not be deemed to have constructive knowledge of any information which the expert either acquired, but failed to communicate to the claimant, or failed to acquire. (Draft Bill, Cl 4(1)(b))

(7) Agency

We suggested in the Consultation Paper that any new legislation should clarify that normal rules of agency would apply, so that an agent's knowledge of facts would be imputed to the claimant where the agent's actual knowledge of information was acquired within the agent's authority to act for the claimant.

We therefore recommend that a claimant is to be treated as knowing any fact of which his or her agent has actual knowledge if, the agent in question

(1) is under a duty to communicate that fact to the principal, or

(2) has authority to act in relation to the cause of action

but if this does not apply, no person shall be treated as having knowledge of a fact merely because an agent of his has knowledge of a fact (Draft Bill, Cl 4(3)).

(8) Knowledge and Organisations

(a) The application of the 'date of knowledge' to organisations

In the Consultation Paper we provisionally recommended that there should be specific statutory provisions setting out how the date of knowledge would apply to corporate claimants. Where the limitation period starts from the date of knowledge of the claimant, it must be clear whose knowledge is relevant for the purposes of calculating that date. Knowledge may be imputed to the organisation under the rules we recommend in relation to agents, but relying solely on this rule will not accurately reflect the information which is in practice available to the organisation. The principle that any new Act should contain specific rules setting out the circumstances in which a corporation should be considered to satisfy the test for the date of knowledge was accepted by over eighty-five per cent of consultees. Though the courts have recently become more accustomed to determining the date on which a corporate body can be considered to have knowledge for the purpose of the Limitation Act 1980,

This difficulty arises in the case of all corporations aggregate, and we consider therefore, that our provisions on 'corporate knowledge' should apply to all such corporations. It might at first appear that the same difficulty does not apply in the case of corporations sole, where the holder of a particular office is accorded corporate personality.

There are also a number of bodies which have in practice been given a form of legal personality by statute for limited purposes, though they have not been incorporated (and do not therefore have full legal personality independent of their membership). In particular, and most relevantly for our purposes, a number of organisations have been given the right to bring proceedings in their own names by statute.

We therefore recommend that our provisions in respect of 'corporate knowledge' should apply to the following 'relevant bodies': all corporations (whether bodies corporate or corporations sole), and all other bodies which have a right to sue or be sued in their own names, including Government departments which are 'authorised departments' in accordance with section 17 of the Crown Proceedings Act 1947 and partnerships. (Draft Bill, Cl 5(2)).

(b) The test for an organisation's knowledge

We provisionally proposed a two stage test for corporate knowledge.

(i) Actual knowledge

Under the formulation set out in the Consultation Paper, the limitation period would start to run against the company (or any other relevant body) as soon as the relevant information reached an employee or officer who, if not able to take action him or herself, would be expected to pass the information on to someone with the relevant authority. This provisional proposal was supported in principle by around fifty per cent of consultees responding on this issue (subject in some cases to concerns over the drafting of the provision). However concerns were expressed that the concepts of 'expectation' and 'act on the information' are too vague to provide sufficient guidance to the courts or litigants, and that in consequence the provisions would generate substantial satellite litigation. It was suggested

Two alternatives were put forward by consultees. One proposal was that, instead of asking whether a particular employee would be 'expected' to communicate information, the question should be whether the duties of that employee would require communication of the relevant information.

An alternative proposal was that only the knowledge of a company's 'directing mind' should be attributed to the company (or other corporation).

Meridian Global Funds Management v Securities Commission.

As we noted in the Consultation Paper, this does not provide any certainty as to who in a corporate hierarchy should be regarded as the person whose knowledge is to be attributed to the company.

In addition, it would be unreasonable to prevent the primary limitation period starting to run against a corporation or similar organisation until information reaches its controllers. Such a body would have a longer limitation period than an individual, particularly in the case of a large company, or a multi-national grouping with a complicated corporate structure. It is also seems artificial to say that a corporation (or any similar organisation) does not yet know the relevant facts where information has been received by an employee of the corporation who is under a duty to report that information to the management, or who would be expected to pass that information on.

We consider, therefore, that, largely in line with what we provisionally proposed in the Consultation Paper, a relevant body should be deemed to have the actual knowledge of the people who meet the following descriptions:

(1) First, an officer of the relevant body or a person with authority to take decisions in relation to the claim on behalf of the organisation. For these purposes, "the decisions in relation to the claim" would mean (a) a decision to seek legal advice in relation to the cause of action and (b) a decision whether or not to issue proceedings in relation to the claim.

(2) Secondly, any employee of the organisation who is under a duty to communicate the relevant information either to someone having the relevant authority or any other employee of the organisation.

(ii) Constructive knowledge

The issues arising in the case of constructive knowledge for organisations are very similar,

(1) any officer of the relevant body or a person with authority to take the relevant decisions, or

(2) an employee of the relevant body who is under a duty to disclose that information to someone with that authority or to any other employee

ought reasonably to have known of the relevant facts.

However, the application of this is less straightforward than with regard to actual knowledge. As noted in the Consultation Paper,

The first situation is less complicated. In relation to any relevant information, the court will need to consider whether one or more identified people, who fall within the two classes described above, should be regarded as having constructive knowledge of that information. The test is the same as for any individual claimant, and simply requires an examination of the sources of information available to the relevant person.

The second situation is more complex. No one within the organisation can be identified as being at fault - the information was not collected because the organisation did not have the relevant structures in place to ensure that this was done. We suggested in the Consultation Paper that taking account of what can be termed 'structural constructive knowledge' for a company, for example, would require the court to assess the management structures of the company concerned by reference to the structures of a 'reasonable' company of the same type. The same would apply to other relevant bodies. This would necessarily involve costs wholly disproportionate to any benefit which might be gained from including that 'knowledge' within the definition of the date of knowledge. Over eighty per cent of consultees agreed that no provision should be made for structural constructive knowledge. The corollary is that it may in some cases be true that a poorly managed, inefficient organisation is at an advantage as regards limitation by comparison with a organisation with better management structures. This drew criticism from Andrew Smith J, the City of London Law Society Litigation Sub-Committee

The incorporation of 'structural constructive knowledge' would inevitably lead to massive costs in investigating peripheral issues in a limited number of cases.

We recommend that a relevant body should be considered to have actual or constructive knowledge when that knowledge is imputed to the body under our recommendations in relation to agency, or when

(1) an officer of the body (including a partner in the case of a partnership), or a person with authority to take the relevant decisions on its behalf; or

(2) an employee of the relevant body who is under a duty to disclose that information to someone with that authority or to any other employee

has that knowledge. For these purposes, decisions in relation to the claim are (a) a decision to seek legal advice in relation to the claim and (b) a decision whether or not to issue proceedings in relation to the claim. (Draft Bill, Cl 5(1), 5(3) and 5(5)).

(c) Concealment of information by a person whose knowledge would be attributable to the organisation

We provisionally proposed in the Consultation Paper

We recommend that where an officer of the body, or a person with authority to act on the information on behalf of the relevant body, or any employee of the relevant body who is under a duty to communicate that information to a person with that authority or another employee

(1) is a defendant to the claim of the relevant body; or

(2) has dishonestly concealed information relevant to that claim from someone whose knowledge would be attributed to the relevant body under the rule set out in paragraph 3.78 above

that person's knowledge shall not be regarded as the knowledge of the relevant body. (Draft Bill, Cl 5(4), (5)).

(9) Joint claimants

In a number of cases, more than one claimant may be joined in the same proceedings against the defendant. This does not present a difficulty where, though all the causes of action arise out of the same events, each claimant is pursuing a claim against the defendant on his or her own behalf. For example, several claimants may have been injured in the same accident as a consequence of the defendant's negligent driving. The cause of action accruing to each claimant will be subject to a separate limitation period whether that claimant joins in proceedings against the defendant or pursues separate proceedings against the defendant. The only knowledge relevant for the purpose of calculating the start of the primary limitation period is the knowledge of the claimant in question.

There are two other possibilities. The claimants may be jointly and severally entitled to the remedy sought (as where two or more creditors seek to recover a debt to which they are jointly and severally entitled). Alternatively, they may simply be jointly entitled to the remedy sought.

Where a claimant is suing on a joint and several obligation owed to him, he is entitled to bring the claim without joining the other claimants who are jointly entitled.

Where there is only a joint entitlement to the remedy, it could be argued that the position is different. Under the Civil Procedure Rules where a claim is brought by two or more claimants who are jointly entitled to the same remedy, all persons jointly entitled to a remedy claimed by the claimant must be parties to the claim unless the court orders otherwise.

However, under the current law, joint claimants are for a number of purposes treated individually by the law on limitation periods. It has in the past been held that the fact that one of a number of joint claimants is under a disability does not serve to extend the limitation period for the claim in question as far as the other claimants are concerned, on the grounds that they are in a position to protect their interests by bringing proceedings.

Following (and extending) the current approach holds a number of advantages. If joint claimants are treated separately, so that the primary limitation period only starts to run against a claimant when that claimant has the necessary knowledge, irrespective of the knowledge of the other claimants, there will be no risk that one claimant could prejudice the position of the others by discovering the necessary information and deciding to take no action. In practice, it is likely that each of the joint claimants will have knowledge of the relevant facts at the same time - and it should be said that, in those cases where this is not the case, the approach we recommend will not benefit the defendant, as he or she will remain liable on the claim until each of the joint claimants has been become time-barred.

We therefore recommend that where a claim is brought by two or more claimants who are jointly entitled to the remedy sought, the start of the primary limitation period shall be calculated separately for each claimant, by reference to the knowledge of that claimant. A defence may only be raised against those claimants against whom the primary limitation period has expired. (Draft Bill, Cl 6(1), (2)).

A similar issue may arise where it is necessary for more than one claimant to be joined in the proceedings as representatives for the entity entitled to the benefit of the cause of action. In most representative claims, proceedings may be brought on behalf of the interested third party by a single claimant. For example, a derivative claim may be brought by a single shareholder on behalf of a company.

Where, in contrast, a claim can only be brought by two or more claimants on behalf of the relevant entity, the same question arises as with joint claimants: whose knowledge is to trigger the primary limitation period? The classic example is where there are two or more personal representatives for a deceased's estate. All must join in bringing any claim on behalf of the estate (such as a claim under the Law Reform (Miscellaneous) Provisions Act 1934).

Where the cause of action in question is a claim under the 1934 Act in relation to the personal injuries of the deceased, section 11(7) (and 11A(7)) of the Limitation Act 1980) provides that the limitation period should start from the earliest 'date of knowledge' of the personal representatives. We propose to adopt the same solution. This will only apply where proceedings must be brought by more than one representative for those entitled to the remedy sought.

We therefore recommend that where a claim must be brought by two or more claimants acting as trustees or personal representatives, the primary limitation period in respect of that claim should start from the earliest date on which one of the trustees or personal representatives has actual or constructive knowledge of the relevant facts. (Draft Bill, Cl 6(3), (4)).

(10) Assignments

In some cases the cause of action may have accrued to someone other than the claimant, and then have been assigned to the claimant. Where the primary limitation period did not start before the date of the assignment because the assignor had no knowledge of the relevant facts few difficulties will arise. In some cases the claimant may have acquired knowledge of the relevant facts before the date of the assignment. However, it would seem unreasonable for that knowledge to trigger the primary limitation period before the claimant also has the right to bring a claim in respect of the cause of action. This problem has arisen under the current law in relation to claims for latent damage not involving personal injuries: section 14A(5) of the 1980 Act provides that the limitation period should start from the date on which the claimant had both the knowledge required for bringing a claim and a right to bring such a claim. We consider that the same rule should apply under the regime we propose.

The primary limitation period may have started before the date of the assignment. In this case, if the only knowledge taken into account is to be that of the claimant, he or she would in practice receive an extension of the limitation period. If the primary limitation period had ended before the date of the assignment, a defence would have accrued to the defendant. It is hard to justify either allowing the claimant an extended limitation period or removing the defendant's accrued defence simply because there has been an assignment (which could lead to assignments motivated purely to avoid the expiry of a limitation period). It will therefore be necessary to consider both the knowledge of the claimant and the knowledge of any person in whom the right to make a claim was previously vested in order to determine whether the primary limitation period has started to run.

We recommend that where a cause of action has been assigned to the claimant:

(1) the expiry of the primary limitation period in relation to a claim by any person in whom the cause of action was vested before the claimant will give rise to a defence (Draft Bill, Cl 7(2));

(2) where the primary limitation period had started to run in relation to a claim by any person in whom the cause of action was vested before it was assigned to the claimant because that person acquired the relevant knowledge at the time when he or she had the right to bring a claim, it will continue to run against the claimant (Draft Bill, Cl 7(3),(6));

(3) where the primary limitation period has not started to run before the date of the assignment it will run from the later of

(a) the date of the assignment and

(b) the date of knowledge of the claimant (Draft Bill, Cl 7(4)).

3. How long should the primary limitation period be?

The majority of consultees (over seventy per cent) agreed that there should be a uniform primary limitation period which applies, as far as possible, to all causes of action, to ensure greater certainty and simplification of the present law.

This can only lead to greater certainty and simplification of the current law. In addition it will remove the incentive which plaintiffs currently have to try to bring their right of action within one category rather than another. The current law, especially in relation to the different limitation periods for actions in contract and, for example, unintentional personal injury in tort, cannot be rationally defended.

We proposed in the Consultation Paper that this period should be three years.

It has been suggested that a three year limitation period would create unacceptable problems for patent claims in relation to patents granted in the European Patent Office, as opposition proceedings before that office are notoriously slow, and for liquidators. Although we recognise that there may be difficulties in bringing a claim in respect of a European patent, one solution may be for anyone with such a cause of action to bring proceedings, and apply to have them stayed pending resolution of any opposition proceedings before the European Patent Office. This alone would not therefore appear to be sufficient reason to choose a longer limitation period. The application of the core regime in cases where the nominal claimant has gone into liquidation, and there is a liquidator acting on its behalf, is discussed below.

We recommend that the primary limitation period applying under the core regime should be three years. (Draft Bill, Cl 1(1)).

4. The Long-Stop Limitation Period

(1) Should there be a long-stop limitation period?

We provisionally proposed in the Consultation Paper that the core regime should include a long-stop limitation period of ten years applicable to all claims other than for personal injury, and that personal injury claims should be subject to a long-stop limitation period of thirty years.

(a) Claims other than for personal injuries

Our proposal that there should be a long-stop limitation period of ten years applying to claims unrelated to personal injuries attracted significant support. Excluding those consultees who only expressed a view in relation to personal injury claims (over forty per cent of the total), over eighty-five per cent of consultees responding on this question supported the proposal that there should be a long-stop in relation to claims unrelated to personal injury. A key concern is the need to protect defendants from claims being brought at a date so long after the events to which the claim relates that defendants are no longer properly able to defend themselves. We noted in the Consultation Paper that where a claim is brought after many years there may be a risk of serious injustice to the defendant, as witnesses may no longer be available, and any documentary evidence may have been lost or destroyed.

We recommend that a claim, other than in respect of a personal injury, should be subject to a long-stop limitation period of ten years. (Draft Bill, Cl 1(2)).

(b) Personal injury claims

Different considerations apply in relation to personal injury claims, and, despite the arguments cited above, we are minded to exempt such claims from the long-stop limitation period we recommend. Our provisional proposal that there should be a long-stop limitation period in personal injury claims was rejected by around fifty-five per cent of consultees. The major concern at the suggestion that a long-stop should apply to personal injury claims was that this would be unjust to claimants suffering from latent diseases, where the disease in question does not manifest itself within the long-stop period. Claims for asbestos-related disease present particular problems. The latency period for mesothelioma, a cancer of the lining of the lung caused by exposure to asbestos, can be anything between fifteen and sixty years, and we have been informed by consultees who are consultant physicians practising in asbestosis-related disease that the median latency period is over thirty years.

Some consultees also expressed concern that imposing a long-stop in personal injury cases could unjustifiably bar claims being made by victims of sexual abuse. There are a growing number of cases in which victims are now coming forward to testify about abuse which took place in the 1970's and early 1980's (as the evidence presented to the enquiry chaired by Sir Ronald Waterhouse into child abuse in local authority homes in North Wales demonstrates very clearly),

In the light of this evidence, it is clear that the period of thirty years which we provisionally proposed is too short. Increasing the length of the long-stop would not guarantee that all claimants with latent disease claims are covered, while making the long-stop too long to serve any useful purpose. We have considered whether it would be possible to modify the application of the long-stop limitation period, by providing that it should be disapplied in cases where the claimant's claim relates to personal injury, and the claimant was not diagnosed as suffering from that injury until a date less than three years before proceedings were issued. This proposal would protect personal injury claimants where they do not know of their injury at the end of the long-stop limitation period (but not where the primary limitation period has not expired because they do not know one of the other relevant facts). The claim would in such a case be governed only by the primary limitation period. This proposal attracted the support of several of those consultees who objected to a personal injury long-stop because of the potential injustice in respect of asbestos-related claims. However, we have concluded that it would increase the complexity of the core regime without necessarily providing any compensating advantages, particularly in the light of our revised proposals (discussed below) in relation to a judicial discretion to disapply the limitation period in personal injury claims.

We noted in the Consultation Paper that the lack of any long-stop limitation period has caused significant difficulties, particularly where the claimant is of unsound mind, and thus potentially indefinitely under a disability. Without the long-stop, no limitation period would apply to such claimants, so that claims could still be brought years, if not decades, after the events giving rise to the cause of action.

For the purposes of our limitations regime, we propose to adopt the definition of personal injuries which is given in section 38(1) of the Limitation Act 1980: "'personal injuries' includes any disease and any impairment or a person's physical or mental condition."

We recommend that no long-stop limitation period should be applied to claims in respect of personal injuries to the claimant (or, in the case of an action brought under the Law Reform (Miscellaneous Provisions) Act 1934 or the Fatal Accidents Act 1976, to the deceased). (Draft Bill, Cl 9).

(2) When should the long-stop limitation period start?

Under the current law, the long-stop limitation period provided for in relation to latent damage claims start from the date of the act or omission which is alleged to constitute negligence. Similarly, the long-stop limitation period for Consumer Protection Act claims starts from the date of the act giving rise to the claim under the Act.

It has been suggested that where there have been a number of acts or omissions by the defendant, it may be difficult to identify which act or omission "gives rise to the cause of action". To minimise this difficulty we consider that our provisional proposal should be changed so that, as a general rule, the long-stop limitation period will start on the date of the accrual of the cause of action. When loss is not an essential element of the cause of action, the date on which the cause of action accrues will in most cases be the date of the act or omission which gives rise to the cause of action. The courts will, however, be able to draw on the guidance of the current law as to when a cause of action accrues to identify this date. To avoid the need to ascertain precisely when the claimant has suffered injury loss or other damage, there will be an exception to the general rule for those causes of action in tort and breach of statutory duty where loss is an essential element of the cause of action. Here, in line with our provisional proposal, the starting date for the long-stop limitation period will be the date of the act or omission giving rise to the cause of action.

It has also been suggested by the Association of Personal Injury Lawyers that it could be difficult to determine the date of the act or omission giving rise to the cause of action, particularly where the cause of action depends on an omission by the defendant, rather than a positive act. This type of problem can also occur under the current law where the limitation period starts from the date of the accrual of the cause of action. The courts have held that where the claimant relies on an omission by the defendant, the cause of action accrues on the latest date on which the defendant was under a duty to the claimant to act.

We asked consultees whether there should be a special starting point for the long-stop limitation period in the case of construction-related claims. We suggested that, in such cases, the date of the act or omission could be defined as the 'date of completion' of the construction works. The arguments are finely balanced. It is in this area where the claimant is particularly likely to have concurrent claims in both contract and tort. The starting date for the long-stop limitation period under our proposals in relation to contract claims will be the date on which the cause of action accrues. In relation to tort, it will be the date of the act or omission giving rise to the cause of action. Depending on the nature of the breach of duty alleged, the starting date may be different for each type of claim, and there may be some uncertainty as to the relevant date. Providing for a separate starting point for all construction related claims would avoid this problem and increase certainty. In addition, it has been argued that in the absence of such a provision, it would be impossible to sue sub-contractors involved early on in a long project, as any negligence in their work may well only come to light when the building was finished. Most construction liability claims relate, by their nature, to latent damage.

Against a separate starting point for construction-related claims it has been argued that it would be wrong to ring-fence a particular industry: it is not a principled approach, and would risk creating anomalies. Further the legal problems faced by the construction industry are said to be common to the whole law. Some consultees also pointed out that it would be difficult to identify when the completion of the works took place, that sub-contractors involved early on in a project would be subject to a considerably extended limitation period, and that considerable hardship would be caused to the professionals involved, in terms of increased insurance costs. In addition, it will be possible for the parties concerned to reach an express agreement extending the limitation period applying to claims in relation to a particular project if necessary. We are not convinced that the additional complexity which would be caused by a separate regime for construction-related claims would be justified by the benefits it would bring.

We recommend that the long-stop limitation period should, as a general rule, start to run from the date on which the cause of action accrues, but that there should be an exception for those claims in tort where injury, loss or damage is an essential element of the cause of action and for claims for breach of statutory duty. In these cases, the long-stop limitation period will start to run from the date of the act or omission that gives rise to the cause of action. (Draft Bill, Cl 3).

5. Factors Extending or Excluding the Limitation Periods

(1) Disability

Under the current law, 'disability' extends the limitation period in two situations: where the claimant is a minor, and where the claimant is of unsound mind, in the sense of being incapable of managing property and affairs by reason of mental disorder.

(a) Minority

(i) Minority and the primary limitation period

Two questions arise here: first, should the primary limitation period be extended for minors who have no-one to act on their behalf, and secondly, should the existence of an adult able to act for the minor make any difference? In relation to the first question, we provisionally proposed that disability, including minority, should extend a primary limitation period so that the period starts to run only when the claimant's disability has ceased.

We did not express a provisional view on the second question, but asked consultees whether a limitation period should run against a person under a disability who has a representative adult capable of bringing proceedings on his or her behalf (except where the claim is against the representative).

A majority of consultees responding on this issue were of the opinion that time should not run against a minor even though there is a representative adult, so that the interests of the minor are fully protected. There was concern that if time was to run, the minor would inevitably suffer, as appears to have been the case when a 'representative adult' provision was included in the Limitation Act 1939.

We therefore do not recommend any rule to the effect that time should run against a minor where there is a representative adult

(ii) Minority and the long-stop limitation period

Although we have recommended that no long-stop limitation period should apply to personal injury claims,

We provisionally proposed

(1) Option 1: Minority should override a long-stop (so that for any act or omission committed during the claimant's minority the ten year long-stop limitation period would not commence until the claimant was eighteen).

(2) Option 2: Minority should not override a long-stop (so that a ten year long-stop would potentially bar a non-personal injury claim even though the claimant is a minor).

(3) Option 3: There should be a special long-stop for minors which would end on the later of two dates:

(a) the date the claimant reached the age of twenty-one, or

(b) the date the long-stop would have ended in the absence of disability.

Over sixty per cent of consultees favoured option three. We agree. It is best expressed by saying that any long-stop limitation period shall run but not so as to bar a claim before the claimant has reached the age of twenty-one. This allows the minor a reasonable chance to bring proceedings on reaching majority. It avoids over-protecting the claimant (as the first option would do, by allowing the minor a further ten years on reaching majority). It also avoids under-protecting the claimant, which would be the result of adopting the second option, which could time-bar a claimant who had not reached majority.

We therefore recommend that:

During the period when the claimant lacks capacity because he or she is under the age of eighteen

(a) the primary limitation period shall not run;

(b) any long-stop limitation period shall run but will end on the later of the following dates:

(i) the date on which the claimant reaches the age of twenty-one; or

(ii) the date ten years after the starting date for the long-stop limitation period. (Draft Bill, Cl 28).

(b) Adult disability

(i) The effect of adult disability

We provisionally proposed that disability should extend a primary limitation period so that the period starts to run only when the claimant's disability has ceased.

(ii) The definition of adult disability

In the Consultation Paper we provisionally proposed that the definition of adult disability should focus on lack of capacity, rather than only mental disability;

A person is without capacity if at the material time:

(a) he or she is unable by reason of mental disability to make a decision for himself on the matter in question or

(b) he or she is unable to communicate his [or her] decision on that matter because he or she is unconscious or for any other reason.

'Mental disability' for the purposes of this definition is "a disability or disorder of the mind or brain, whether permanent or temporary, which results in an impairment or disturbance of mental functioning."

This definition ensures that claimants will be protected both in the case where they are unable to appreciate or to remember the facts relevant to the claim because of their disability, and where the nature of the disability is such that, although aware of the facts, they are unable to reach any decision in relation to the claim. This proposal was accepted by a large majority of our consultees, and we now confirm it as a final recommendation, subject to a clarification to ensure that "inability to communicate" only extends to inability which is due to mental disability or physical impairment (such as unconsciousness).

Consultees were also asked in the Consultation Paper whether the definition of 'disability' should make specific provision for the psychological incapacity suffered by victims of sexual abuse.

We therefore recommend that there should be no specific provision for the psychological incapacity suffered by victims of sexual abuse.

(iii) Supervening disability

Under the current law, the claimant does not receive the benefit of an extension of the limitation period where he or she suffers from a disability which commences after the cause of action accrues.

(iv) Should there be a limit to the protection given to adults under a disability in personal injury cases?

The position in relation to personal injury claims is complicated by our abandonment of a long-stop limitation period. To recommend that time does not run where the claimant lacks capacity would mean that in contrast to minority (where the incapacity has a definite end, namely when the claimant reaches the age of eighteen) there could be an indefinite suspension of the primary limitation period, so that the claimant is in practice not subject to a limitation period.

This problem already arises under the present law and is one of the current problems in limitation law that we were hoping to solve in this project.

Headford v Bristol and District Health Authority

This has given rise to significant criticism of the unlimited protection the present law allows claimants who remain under a permanent disability. Ralph Gibson LJ commented in Headford v Bristol and District Health Authority

For personal injury claims, we now therefore recommend a new solution which draws first on an analogy with the ten year long-stop in non-personal injury claims; and secondly, on the fact that in most cases a person without capacity over more than a short period of time will be in the care of an adult who is able to act on his or her behalf. Although we recommend that in personal injury cases the primary limitation period should not run against a claimant who lacks capacity, that protection will only last for a period of ten years from the date on which the cause of action accrues or, if later, the onset of the lack of capacity. After ten years have passed, provided that there is a representative adult able to act for the claimant, the primary limitation period will run against the claimant when the representative adult has the required knowledge. Any time that has already elapsed in the limitation period (where for example the claimant knew or ought to have known the facts relevant to the cause of action before the onset of the lack of capacity, so triggering the primary limitation period at an earlier date) will be disregarded.

The representative adult for these purposes will be the member of the claimant's family who is responsible for the day to day care of the claimant, or a person who is authorised under Part VII of the Mental Health Act 1983 to conduct proceedings in the name of the claimant. If there is no-one who falls into either of these categories at the end of the ten year period, the claimant will continue to be protected. It is unlikely that a claimant who lacks capacity, and does not recover, could ever have either actual or constructive knowledge sufficient to start the primary limitation period. Further, if the cause of action is against the representative adult him or herself, that person's knowledge will not be considered in deciding whether the primary limitation period has started. There may therefore still be some cases in which a claimant who lacks capacity is able to bring a claim in respect of his or her cause of action many years after the events which gave rise to the cause of action, but this should be exceptional.

Though with this proposal we are departing from the approach we have adopted in relation to minority, where we have recommended that the existence of a representative adult is not sufficient reason to allow the limitation period to run against the claimant, we believe this to be justified. The problems caused by the unlimited protection given to claimants under a disability do not arise in relation to minority, where there is a natural term to the potential extension of the limitation period which the minor can claim. And our proposal ensures that the claimant under a disability will benefit from absolute protection for at least ten years from the starting date (considerably longer than would be the case if no protection was given to a child in the custody of an adult).

We therefore recommend that:

(1) During the period when a claimant over eighteen lacks capacity because he or she is unable by reason of mental disability to make a decision for him or herself on the matters in question, or he or she is unable to communicate his or her decision on that matter because of mental disability or physical impairment (Draft Bill, Cl 29(6)):

(a) subject to sub-paragraph (c) below, the primary limitation period should not run. (Draft Bill, Cl 29(2))

This will apply whether the lack of capacity exists on the date when the cause of action accrues (so that the primary limitation period does not start running), or develops after that date (suspending the primary limitation period after it has begun to run). When the claimant regains capacity, the primary limitation period will continue to run from the point at which it was suspended, so that the claimant has the benefit of the unexpired part of the limitation period;

(b) in claims which are not related to personal injuries, a long-stop limitation period should run;

(c) in personal injury cases, after a period of ten years from the accrual of the cause of action or, if later, from the onset of the lack of capacity, the primary limitation period should run but with the knowledge of the claimant's Representative Adult regarded as the knowledge of the claimant, except where the cause of action is against the Representative Adult. Where the claimant was a minor at the end of the ten year period, the primary limitation period shall not run by reference to the knowledge of the Representative Adult until the claimant's majority. (Draft Bill, Cl 29(3), (4) and (5)).

(2) 'Mental disability' for the purposes of this definition is defined as 'a disability or disorder of the mind or brain, whether permanent or temporary, which results in an impairment or disturbance of mental functioning'. (Draft Bill, Cl 29(7)).

(3) A person is a Representative Adult if he or she is the member of the claimant's family who is responsible for the day to day care of the claimant, or a person who is authorised under Part VII of the Mental Health Act 1983 to conduct proceedings in the name of the claimant. (Draft Bill, Cl 29(8)).

(2) Concealment

(a) The meaning of 'concealment'

We provisionally proposed in the Consultation Paper that for there to be 'concealment' for limitation purposes, the defendant must conceal the relevant facts intending the claimant not to discover the truth or reckless as to whether the claimant discovers the truth or not.

In addition, since the publication of the Consultation Paper, the concept of 'deliberate concealment' seems to have been extended by Brocklesby v Armitage & Guest

Liverpool Roman Catholic Archdiocese Trustees Inc v Goldberg.

In removing the need for any 'unconscionable conduct' by the defendant, Brocklesby v Armitage & Guest and Cave v Robinson Jarvis and Rolf ignore the rationale of section 32, which is that the defendant should not be able to profit from his own behaviour in concealing facts relevant to the claimant's claim.

Liverpool Archdiocese Trustees v Goldberg

We are of the view that our proposals in relation to 'concealment' should only apply where the defendant has been guilty of 'unconscionable conduct' - or in other words, if the concealment can be said to be 'dishonest'. The claimant will have to demonstrate two things before being able to claim the benefit of our provisions. First the claimant must show that the defendant has concealed one of the facts the claimant must know to trigger the primary limitation period. The defendant will, under our proposals, be taken to have 'concealed' information from the claimant where he has taken any action which has the result that the claimant has failed to discover that information for some time, or if he has failed to disclose information to the claimant in breach of a duty to do so. Secondly, the claimant must show that the defendant was being dishonest in doing so. We do not consider that the concealment could be described as 'dishonest' unless the person concealing it is aware of what is being concealed and does not wish the claimant to discover it. This requirement is intended to restore the need for the claimant to demonstrate some unconscionable behaviour or impropriety on the part of the defendant before the claimant may benefit from an extension of the limitation period. Thus, by covering up shallow foundations the builder has 'concealed' them for the purposes of our test. However, the builder cannot be said to have been guilty of 'dishonest concealment' unless he was aware that his work was defective or negligent, and does not want the claimant to discover this. Equally, a lawyer who has given negligent advice, but is not aware of having done so, cannot be said solely on this ground to have been guilty of 'dishonest concealment', even if the circumstances are such that the claimant does not discover the negligence for some time.

(b) Concealment and the primary limitation period

We suggested in the Consultation Paper that the adoption of a 'date of knowledge' starting point for the core regime would make deliberate (or dishonest) concealment irrelevant to the primary limitation period.

However, the purpose of including the claimant's constructive knowledge in the definition of the date of knowledge is not only to protect the defendant but also to ensure that the claimant has an incentive not to delay unreasonably in bringing proceedings. We are not convinced that the fact that the defendant has concealed information from the claimant should allow the claimant a longer limitation period where the relevant information is available to the claimant either because the defendant's efforts at concealment were not wholly effective or because there is some other source from which the claimant should reasonably have obtained the relevant information. The fact that information has been concealed from the claimant will be taken into account in deciding when the claimant should have known of the relevant facts. Our conclusion is that no further protection is needed for the claimant, and that the date of knowledge should not exclude constructive knowledge where the defendant has been guilty of concealment.

(c) Concealment and the long-stop limitation period

We provisionally proposed in the Consultation Paper that the long-stop limitation period would not apply where the defendant has concealed any of the facts relevant to the test for the 'date of knowledge' from the claimant:

We propose to extend the category of people who are able to rely on the dishonest concealment of the defendant (or his or her agent) to extend the long-stop limitation period. Section 32 of the Limitation Act 1980, does not extend the limitation period for any claimant who claims through the person from whom the facts were originally concealed. In contrast, section 32(1) does provide that concealment by any person through whom the defendant claims is sufficient to extend time as against the defendant. We propose to retain this provision, and in addition to ensure that the claimant claiming through a person from whom the facts were originally concealed is protected. Similarly, where the defendant conceals the facts relevant to a claim in respect of defective property, and that property is then sold, we consider that the purchaser (who has the benefit of a new cause of action accruing on the date of his purchase under section 3 of the Latent Damage Act 1986) should also be able to rely on that concealment to extend the long-stop limitation period applying to his claim against the defendant. This is subject to the same starting date as the claim which originally accrued to the seller.

We propose to retain the protection given to innocent third parties by section 32(3) of the 1980 Act. Under this provision the limitation period applying to a claim to recover property (or its value), or to set aside a charge against the property (or any other transaction affecting it), against a bona fide purchaser for value is not extended where there has been deliberate concealment provided that the purchaser was not party to the concealment and had not reason to believe that it had taken place. If this provision is not re-enacted, an innocent third party would be penalised by the removal of the protection afforded to them by the long-stop limitation period for something he or she had had no part in. This seems unreasonable.

(d) The long-stop limitation period and claims for fraud

Under the current law, where a claim is "based upon the fraud of the defendant", the limitation period only starts to run when the claimant has discovered the fraud.

Fraud should be treated seriously by the law, and it is fundamentally wrong that a Defendant should be able to get away, or think that he can get away, with fraud after any period, and the fact that so many cases of fraud also involve deliberate concealment is not a good reason for the Commission's provisional view in this regard.

However, we adhere to our provisional view that, absent concealment by the defendant, the long-stop limitation period should apply even where the cause of action is for fraud. Our reasoning is that the limitation regime should only be modified to take account of factors which affect the operation of the regime. Where there has been concealment by the defendant, the actions of the defendant have prevented the primary limitation period operating; and, similarly, the concealment means that, because the claimant has no chance to discover the relevant facts, it would also be unjust to apply the long-stop limitation period to bar the claim. In the unlikely event that a defendant who is guilty of fraud has not concealed information from the claimant, by act or omission, the claimant who is the victim of fraud is not at a disadvantage in discovering the facts relevant to his or her cause of action by comparison with any other claimant.

3.145

We recommend that:

(1) where:

(a) the defendant or any person through whom the defendant claims (or any of their agents) has concealed any of the relevant facts from the claimant or any person through whom he claims (or any of their agents) (whether before or after the cause of action has accrued) and

(b) the concealment was dishonest

the long-stop limitation period or any limitation period agreed between the parties should be suspended from the date on which the fact was concealed until the date on which it was discovered (or should have been discovered) by the claimant (or any person through whom he or she claims) (Draft Bill, Cl 26(1), (2), (4));

(2) the defendant will be regarded as concealing a fact from the claimant

(a) if the defendant takes any action, or is a party to any action the effect of which is to prevent the claimant discovering that fact for some time, or

(b) if the defendant fails to disclose that fact to the claimant in breach of a duty to do so (Draft Bill, Cl 26(6));

(3) the long-stop limitation period applying to a claim by the purchaser of defective property will be extended where the defendant has dishonestly concealed the relevant facts from the seller of that property (Draft Bill, Cl 26(3));

(4) the long-stop limitation period applying to a claim against a bona fide purchaser of property to recover that property (or its value) or to enforce a charge (or set aside a transaction) affecting it will not be extended by dishonest concealment if

(a) the purchase took place after the concealment and

(b) the purchaser was not party to the concealment and had no reason to suppose that it had taken place. (Draft Bill, Cl 26(5)).

(3) Acknowledgments and Part Payments

We provisionally proposed in the Consultation Paper that an acknowledgment or part payment should continue to restart a limitation period in relation to, at least, the same claims for which this is presently the law,

However, it has been suggested by some consultees

There does not appear to be any reason in principle to distinguish between claims for specified amounts and claims for unspecified amounts, and the suggested difficulties do not appear to be insuperable. The question "what constitutes an acknowledgment?" has in the past given rise to a number of problems of interpretation, which the courts have been able to resolve.

We provisionally proposed that the requirement that an acknowledgment must be in writing if it is to restart a limitation period should remain. It may be the case that some insurers are likely to choose their words more carefully in correspondence with claimants' representatives. However this in itself is insufficient reason to maintain the present anomalous distinction between claims for specified amounts and claims for unspecified amounts. We do not propose to retain the requirement that the acknowledgment should be signed by the defendant, as this would unnecessarily limit the documents which could serve as 'acknowledgments'. This change will enable bank statements, for example, to serve as acknowledgments. Requiring a signature is also unnecessary to protect the interests of the defendant as the claimant must still demonstrate that the acknowledgment has been made by the defendant. The requirement that the acknowledgment must be in writing (accepted by over eighty-five per cent of consultees) considerably reduces the scope for uncertainty.

We noted in the Consultation Paper

Under the current law, where a number of people are liable in respect of the same debt or liability for any other specified amount, an acknowledgment made by one of them will bind only the acknowledgor, so that the others may continue to benefit from the running of the limitation period.

We will retain the provisions of section 30(2) of the Limitation Act 1980, whereby an acknowledgment or part payment made by an agent will bind the principal (and equally that a principal can rely on an acknowledgment or part payment made to his or her agent). Equally, an acknowledgment will continue to bind the successors of the person making it, and it may also be relied on by the successors of the person to whom it was made.

We provisionally proposed that there should be no reform of the law to enable an acknowledgment or part payment to revive a cause of action once a limitation period had expired.

An agreement containing an acknowledgment can be distinguished from an acknowledgment per se. The agreement is likely to be a compromise of litigation and there is a clear public interest in recognising and giving effect to compromises of litigation, which arguably outweighs the conflicting public interest in enforcing the original limitation period. It was noted that the party entering into such an arrangement and making the acknowledgment would be likely to have the benefit of legal advice, which would minimise the risk of prejudice to that party.

We recommend that:

(1) a written acknowledgment or a part payment, by the defendant (or someone previously liable to the claim), and irrespective of the nature of the claim, should restart the running of time for both the primary and long-stop limitation periods applying to the claim. This applies whether the acknowledgment or payment was made before or after the cause of action accrued (Draft Bill, Cl 27(1),(7)(8);

(2) a written acknowledgment or a part payment should not be effective to revive a cause of action once the primary or long-stop limitation period has expired (Draft Bill, Cl 27(1)(c));

(3) subject to special rules applying to mortgages and for the possession of land (and in the case of trustees and personal representatives), only the acknowledgor, the person making the part payment or the principal of the agent giving the acknowledgment or making the part payment, and his or her successors, should be bound by the acknowledgment or part payment (Draft Bill, Cl 27(2), (4), (5), (9));

(4) similarly, where an acknowledgment or part payment is made to one or more of a number of joint (or joint and several) claimants (who are not trustees or personal representatives), only the person (or persons) to whom it is made may rely on it to extend the limitation period (Draft Bill, Cl 27(3), (4));

(5) where the purchaser of defective property has a cause of action under section 3 of the Latent Damage Act 1986, an acknowledgment made by the defendant to the previous owner of that property in relation to the original cause of action will also extend the limitation period apply to a claim brought by the purchaser against the defendant (Draft Bill, Cl 27(6));

(6) as under the present law, the acknowledgment shall be valid only if made to the person, or to the agent of the person, whose title or claim is being acknowledged or in respect of whose claim the payment is being made. (Draft Bill, Cl 27(1), (9)).

6. A Judicial Discretion?

(1) A General Discretion?

Under the current law, the court has a discretion to disapply the limitation period in claims in respect of personal injuries and claims for defamation.

The chief merit of a judicial discretion is that it allows the judge to take account of the individual circumstances of a particular case: the judge is not restricted to the application of a general rule. The judge can therefore prevent injustice to an individual claimant where that claimant has failed to issue proceedings within the limitation period applicable to his or her cause of action for excusable reasons.

However, this must be balanced against the risk of injustice to the defendant, in allowing a claim outside the limitation period. And the disadvantage of any discretion is that it produces uncertainty, on two counts. First, defendants can never have the certainty that, after the expiry of a fixed period of time, no claim can be brought in respect of a past event. They must face potential liability for an indefinite period, with all the associated costs (such as the cost of maintaining indemnity insurance for a prolonged period and retaining records). Secondly, additional uncertainty will result from the exercise of the discretion. It is impossible to ensure consistency in the application of a discretion. The decision taken by the judge will depend more on the judge's perception of the facts of the case than on the interpretation of the applicable rule of law. Different judges may well reach a different decision on cases with similar facts.

This level of uncertainty would not be acceptable as part of the core regime applying to all claims (as the process of consultation has made clear: only fifteen per cent of consultees responding on this issue favoured a general discretion). Justice for the individual claimant may come at the cost of increased uncertainty for claimants in general, their advisers, and other parties who need to be able to rely on the certainty which could be provided by a limitation period. For this reason we do not propose to extend the discretion available under the current law to claims which do not involve personal injuries.

(2) A Discretion in Personal Injury Claims?

This leaves the question whether the court should have a discretion to disapply the limitation period in personal injury claims. Those consultees favouring a discretion have expressed most concern in relation to personal injury claims. Of those who favoured a judicial discretion to disapply the limitation periods (around forty-five per cent of consultees responding on this issue), approximately two-thirds argued for the retention of the judicial discretion to disapply the limitation period only for claims relating to personal injuries, as opposed to around fifteen per cent who suggested that there should be a more general discretion. It was argued that the ability to take account of the circumstances of a particular case is more important in personal injuries cases than other claims. The claimant who has suffered a personal injury can justifiably be said to have suffered a more extreme form of harm than the claimant with a claim relating to property damage or economic loss. The loss of the opportunity to bring proceedings against the defendant because of the expiry of a limitation period is therefore, in general terms, more serious for a claimant with a personal injury claim than any other claimant. There is therefore an argument for giving the court, in personal injury claims, but not in other cases, the power to disapply the limitation period in exceptional circumstances, depending on the merits of a particular claim.

An additional factor to be considered is the fact that, on the recommendation of the Law Reform Committee,

We are also concerned that our proposals would not operate fairly for all sexual abuse claims unless there is a discretion. We discuss below whether any limitation period should apply to claims in respect of child sexual abuse. Our conclusion is that the standard limitation period for personal injury claims should apply. In any case where the claimant has been physically injured by the abuse the facts giving rise to the cause of action, the identity of the perpetrator and the fact that it is worth bringing proceedings in respect of the claim will be clear to the victim as soon as the abuse has been committed - or very soon after it. But on that basis, the core regime is likely in many cases to reduce the time available to child sexual abuse claimants from six years from majority (the limitation period applying to claims for trespass to the person under the current law) to three years from majority. The six year period which the claimant has to bring a claim for trespass to the person under the current law has been criticised as inadequate. It is argued that sexual abuse claimants require far longer periods to accept what has been done to them, and to recover sufficiently from the trauma to be able to consider bringing proceedings. Under our proposals, however, the claimant will, in many cases, only have three years from majority to bring a claim. We are therefore of the view that, in these cases, the court should have a discretion to disapply the limitation period where the court finds that it is unjust not to do so.

We noted above that the central argument against the discretion is that it produces uncertainty, and in particular makes it impossible for the defendant to know that after a set period no claim may be brought against him or her. However, this argument is less compelling in the case of personal injury claims in the light of our recommendation that no long-stop limitation period should apply to such claims. In the light of consultees' views, we therefore recommend, with some hesitation, that the courts should retain a discretion to disapply the limitation period in personal injury cases.

We have considered whether any restriction should be placed on the use of such a discretion. When the Law Reform Committee first recommended that a discretion to disapply the limitation period be introduced in personal injury cases, they intended the discretion to apply only to exceptional cases.

We do not consider that it is practical to provide for a restricted discretion. It is simply too difficult to identify all those circumstances which should qualify as 'exceptional cases'. In consequence we propose that the discretion currently contained in section 33 of the Limitation Act 1980 should be re-enacted with minimal changes. The court will be able to exercise its discretion where, in the opinion of the court, it would be unjust not to allow a claim to proceed. Section 33 of the Limitation Act 1980 contains a list of factors to which the court must have regard in deciding whether to exercise its discretion. This guidance has proved helpful, and we propose that it should be retained.

However, we consider that some amendments should be made to the current form of the discretion. An artificial distinction exists under the current law between the claimant who has not issued any proceedings within the limitation period (in which case the discretion applies), and the claimant who has issued proceedings, but failed to serve them within the limitation period (in which case the discretion does not apply).

Under the current law, the 'delay' to be taken into account by the court in exercising its discretion under section 33 is only that occurring after the primary limitation period has expired.

We also propose to include two additional factors in the list of matters which must be considered by the court in deciding whether or not to exercise its discretion to disapply the limitation period, namely whether the claimant has any alternative remedy or compensation available, and the strength of the claimant's case. There has in the past been some doubt as to whether the fact that the claimant has a good claim in negligence against his solicitor for failing to issue proceedings in time should be considered.

We recommend that:

(1) in respect of a personal injury claim, the court may direct that the limitation period which would otherwise bar the claimant's claim shall be disapplied if, but only if, it is satisfied that it would be unjust not to give such a direction having regard to

(a) any hardship which would be caused to the defendant if the direction were given; and

(b) any hardship which would be caused to the claimant if the direction were not given (Draft Bill, Cl 12(1), (2)).

(2) The court shall take into account the following factors in the exercise of its discretion:

(a) the length of, and the reasons for, the delay on the part of the claimant;

(b) the effect of the passage of time on the ability of the defendant to defend the claim;

(1) the effect of the passage of time on the cogency of any evidence which might be called by the claimant or the defendant;

(d) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he or she responded to requests reasonably made by the claimant for information or inspection for the purpose of ascertaining facts which were or might be relevant to the claim;

(e) the extent to which the claimant acted promptly and reasonably once he or she knew that the facts gave rise to a claim;

(f) the steps, if any, taken by the claimant to obtain medical, legal or other expert advice and the nature of any such advice he or she may have received;

(g) any alternative remedy or compensation available to the claimant; and

(h) the strength of the claimant's case.

In addition the court should be empowered to consider any other relevant circumstances. (Draft Bill, Cl 12(3)).

7. Agreements to Change the Limitation Period

The 1980 Act makes no provision in relation to whether it is possible for parties to agree to change the relevant limitation period. There is however case law to suggest that such agreements will be upheld by the courts.

Our provisional proposals received a large degree of support from consultees. Over seventy-five per cent of those who responded on this issue agreed with our provisional views. Several noted that they could see no reason in principle to restrict the parties' freedom of contract, and two pointed out that it is, after all, always a defendant's option not to rely on limitation as a defence to a claim. However, some consultees were concerned that further protection should be given to persons in a position of weak bargaining power, over and above that which is already provided by the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999. We agree that some further protection should be provided. A clause which provides that a reduced limitation period shall apply to one or each party's liability will normally be subject to the various controls imposed by the Unfair Contract Terms Act 1977, as the clause will in effect be a restriction of liability,

In the Consultation Paper we made no provisional recommendation in relation to agreements to extend the long-stop limitation period or to change the long-stop starting date, but asked consultees for their views.

In the Consultation Paper we did not suggest that any distinction should be drawn between agreements to vary limitation periods which are made (i) before the limitation period starts running; (ii) while the limitation period is running; or (iii) after the limitation period would otherwise have expired. Nor did consultees suggest that any such distinction should be drawn. We remain of the view that this is generally the correct approach. In each case one party is simply agreeing not to plead a particular defence if a claim is brought against him or her.

An agreement made while the limitation period is running or after its expiry will almost invariably be part of a compromise between the parties. Such agreements are not subject to the operation of the Unfair Contract Terms Act 1977.

We therefore recommend that:

(1) subject to (2) and (3) below, nothing in the new Act shall prevent the making of an agreement which modifies or disapplies any of its provisions or makes alternative provision (Draft Bill, Cl 31(1));

(2) any clause in such an agreement which affects the limitation period will be valid only if it is shown by the party seeking to rely on it to be fair and reasonable within the meaning of section 11 of the Unfair Contract Terms Act 1977 (Draft Bill, Cl 31(3));

(3) an agreement will be unenforceable to the extent that its terms modify or disapply, or make provision in place of the Act's provision in relation to disability, dishonest concealment or the ten year limitation period applying to claims under the Consumer Protection Act 1987. (Draft Bill, Cl 31(2)).

Ý
Ü Þ

Note 1    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.9 - 12.21. The five options suggested as starting dates for the primary limitation period were: i) the date of discoverability; ii) the date of discoverability or accrual of the cause of action; iii) the date of accrual of the cause of action; iv) the date of the act or omission giving rise to the cause of action; v) the date of accrual of the cause of action for contract claims; date of discoverability for tort claims.    [Back]

Note 2    Which has the advantage of familiarity.    [Back]

Note 3    In addition to the primary limitation period, we propose that claims should also be subject to a long-stop limitation period. This is discussed at paras 3.99 - 3.101 below.    [Back]

Note 4    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.29 and 12.44.    [Back]

Note 5    [1994] 1 WLR 1234.    [Back]

Note 6    We do not mean to suggest that Mrs Dobbie might not have had constructive knowledge of the fact that the lump could, and should have been tested for cancer before the removal of her breast at an earlier date. The Court of Appeal’s decision in relation to actual knowledge made it unnecessary for them to consider this question, and the facts are not entirely clear.    [Back]

Note 7    [1997] PIQR P531.    [Back]

Note 8    The adoption of our definition would have the additional advantage of resolving the conflict between those cases relying on Dobbie v Medway Health Authority and those relying on Hallam-Eames v Merrett Syndicates Ltd [1996] 7 Med LR 122, a case where the Court of Appeal held that the claimant needed to know the facts which “can fairly be described as constituting the negligence of which he complains” in addition to the loss - a far broader approach than Dobbie v Medway Health Authority and Saxby v Morgan.    [Back]

Note 9    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.32.    [Back]

Note 10    This may in some cases mean that the claimant is able to bring a claim directly against the person responsible for the act or omission after the limitation period in respect of a claim against that person’s (vicariously liable) employer has expired. However, we do not consider that this is sufficiently undesirable to justify adding to the complexity of the definition of the date of knowledge unnecessarily by providing for vicarious liability.    [Back]

Note 11    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.44.    [Back]

Note 12    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.44.    [Back]

Note 13    Though an equal minority argued that it was too objective.    [Back]

Note 14    Limitation of Actions, Consultation Paper No 151 (1998), paras 3.40 - 3.44.    [Back]

Note 15    See para 2.11 above, and particularly n 29 to that paragraph.    [Back]

Note 16    We discuss below, at paras 3.40 - 3.50, the meaning of actual and constructive knowledge.    [Back]

Note 17    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.59 - 12.69, and paras 2.31 - 2.32 above.    [Back]

Note 18    See paras 3.160 - 3.169 below.    [Back]

Note 19    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.67.    [Back]

Note 20    As allowed by the House of Lords in Kleinwort Benson v Lincoln City Council [1999] 2 AC 349.    [Back]

Note 21    Under the current law the claimant has an automatic extension of the limitation period under section 32 of the Limitation Act 1980 where the claimant’s claim is for relief from the consequences of a mistake, whether of fact or law. In such a case, time only starts running from the date the claimant discovers, or could with reasonable diligence have discovered, the mistake. As the primary limitation period we propose will only start from the date on which the claimant knows or ought to know the relevant facts, this additional provision will not be necessary.    [Back]

Note 22    Some cases brought under section 14 of the Limitation Act 1980 have been concerned to distinguish between the claimant who has actual knowledge of the facts required by that section, and the claimant who believes but does not know a particular fact. See Davis v Ministry of Defence, The Times, 7 August 1985 (CA); Stephen v Riverside Health Authority [1990] 1 Med LR 261 (Auld J). See further para 2.23 above.    [Back]

Note 23    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.45 - 12.49.    [Back]

Note 24    [1997] PIQR P235.    [Back]

Note 25    Limitation of Actions, Consultation Paper No 151 (1998), para 12.49.    [Back]

Note 26    And in particular the Treasury Solicitor’s Department, the General Council of the Bar, and the Law Society.    [Back]

Note 27    Limitation of Actions, Consultation Paper No 151 (1998), para 12.48.    [Back]

Note 28    See Nash v Eli Lilly & Co [1993] 1 WLR 782, 796, per Purchas LJ, and Limitation of Actions, Consultation Paper No 151 (1998), para 3.57.    [Back]

Note 29    See Limitation Act 1980, s 14(3) and 14A(10).    [Back]

Note 30    Only two consultees disagreed, arguing that the primary limitation period should only start when the claimant has actual knowledge of the relevant facts.    [Back]

Note 31    Limitation Act 1980, s 14(3).    [Back]

Note 32    See the discussion in paras 2.20 - 2.22 and, for example, O’Driscoll v Dudley Health Authority [1998] Lloyd’s Rep Med 210, where the court held that it was permissible to have regard not only to the claimant’s profound physical disability, but also to the fact the claimant was heavily dependent on her parents. Similarly, in Skitt v Khan [1997] 8 Med LR 105, the court held that regard could be had to the deceased’s financial circumstances, the gravity of the deceased’s injury, and the effect that injury had on the deceased and his family.    [Back]

Note 33    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.54.    [Back]

Note 34    See paras 3.15 - 3.33 above.    [Back]

Note 35    It has been suggested by Andrew Smith J, that ‘abilities’ could be considered to include ‘psychological abilities’ or ‘emotional abilities’. But however relevant these ‘abilities’ might be to a decision that it is worth starting litigation to resolve a dispute, in most cases they will not affect the claimant’s capacity to appreciate information. If they do, they should be taken into account.    [Back]

Note 36    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.50 - 12.51, 12.55 - 12.56.    [Back]

Note 37    In particular, Michael Lerego QC and Longmore LJ.    [Back]

Note 38    See paras 3.61 - 3.62.    [Back]

Note 39    See paras 3.99 - 3.101.    [Back]

Note 40    Where the advice is given as part of a report destined to form part of the expert’s evidence in proceedings against the defendant, the expert will benefit from the immunity accorded to such witnesses: see Hughes v Lloyds Bank plc [1998] PIQR P98. And there may well be cases where an expert deliberately withholds knowledge relevant to the claimant’s cause of action to spare the claimant unnecessary worry. This is particularly likely to occur where the claimant consults a doctor, who diagnoses the claimant’s actual condition, but does not disclose the diagnosis to protect the claimant. Evidence of this problem has been given by some of our consultees. If a doctor chooses to withhold information from the claimant for ‘sound medical reasons’ it is unlikely that the claimant will have a cause of action against the doctor, even if his or her cause of action against the defendant becomes time-barred.    [Back]

Note 41    Placing reliance on the existence of a claim against the expert raises the prospect of the expert’s negligence being tried twice - once by the court trying the claim against the defendant, and once by a court trying the claim against the expert. These decisions could conflict - and the costs generated by the issue of what the expert ought to have known or discovered would have increased exponentially.    [Back]

Note 42    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.50 - 12.51.    [Back]

Note 43    See paras 2.33 - 2.34 and 2.81 - 2.83 above.    [Back]

Note 44    Halsbury’s Laws of England (4th ed 1998 reissue) vol 9(2) paras 1007 - 1008.     [Back]

Note 45    Such as some (but not all) Ministers of the Crown, the Metropolitan Police Commissioner and some, though not all, spiritual corporations sole, which include archbishops, bishops, vicars and certain other holders of office in the Church of England.    [Back]

Note 46    These organisations include, for example, trade unions and unincorporated employers’ associations (Trade Union and Labour Relations (Consolidation) Act 1992, s 10 and s 127), and a number of Government departments (Crown Proceedings Act 1947, s 17).    [Back]

Note 47    Though this right is granted by the Rules of Court (CPR Sch 1, RSC O 81, r 1), rather than by statute, the principle is the same.    [Back]

Note 48    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.70 - 12.87.    [Back]

Note 49    See further Limitation of Actions, Consultation Paper No 151 (1998), paras 12.77 - 12.87.    [Back]

Note 50    By Kim Lewison QC.    [Back]

Note 51    By Munich Reinsurance Company and Ernst & Young.    [Back]

Note 52    By Michael Lerego QC.    [Back]

Note 53    Favoured by the Treasury Solicitor’s Department.    [Back]

Note 54    [1995] 2 AC 500.    [Back]

Note 55    [1995] 2 AC 500, 507, 511.    [Back]

Note 56    Limitation of Actions, Consultation Paper No 151 (1998), para 12.75, citing PL Davies, Gower’s Principles of Modern Company Law (6th ed 1997), p 231.    [Back]

Note 57    Fifty-six per cent of consultees responding on this issue approved the provisional proposal.    [Back]

Note 58    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.84 - 12.87.    [Back]

Note 59    Though Lindsay Marr, a member of the sub-committee, expressed a different view on this issue.    [Back]

Note 60    Limitation of Actions, Consultation Paper No 151 (1998), para 12.83.    [Back]

Note 61    By, in particular, Kim Lewison QC, Lovells and the Law Society.    [Back]

Note 62    Catlin v Cyprus Finance Corporation (London) Ltd [1983] QB 759.    [Back]

Note 63    CPR, r 19.3(1), which re-enacts RSC, r 15.4(2).    [Back]

Note 64    Attwood v Rattenbury (1822) CP 6 Moore 579; 23 RR 633.    [Back]

Note 65    Perry v Jackson (1792) 4 TR 516.    [Back]

Note 66    See Limitation Act 1980, s 31(6). A different rule is followed in relation to part payments under s 31(7).    [Back]

Note 67    The issues arising in connection with derivative actions are discussed at paras 4.205 - 4.210 below.    [Back]

Note 68    Latch v Latch (1875) LR 10 Ch 464.    [Back]

Note 69    Luke v South Kensington Hotel Co (1879) 11 ChD 121, Supreme Court Practice 1999, 15/14/3.    [Back]

Note 70    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.88 - 12.89.    [Back]

Note 71    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.90 - 12.95.    [Back]

Note 72    See the Limitation Act 1980, ss 11, 11A and 14A.    [Back]

Note 73    See Part IV, paras 4.242 - 4.248 below.    [Back]

Note 74    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.97 - 12.113.    [Back]

Note 75    See Limitation Act 1980, ss 11A(3) and 14B.    [Back]

Note 76    See Stubbings v Webb [1993] AC 498.    [Back]

Note 77    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.98 - 12.101.    [Back]

Note 78    We have been referred to BP Lanphear and CR Buncher “Latent Period for Malignant Mesothelioma of Occupational Origin” (1992) 34 JOM 718 - 721, which, on the basis of a study of literature documenting 1105 cases of mesothelioma, found a median latency period of thirty-two years.    [Back]

Note 79    See Lost in Care: Report of the Tribunal of Inquiry into the abuse of children in care in the former county council areas of Gwynedd and Clwyd since 1974 (1999 - 2000) HC 201.    [Back]

Note 80    See the arguments of La Forest J in the Canadian case of KM v HM (1992) 96 DLR (4th) 289, 302. It has also been suggested that there is more need for a limitation period to protect defendants in sexual abuse cases, because of the possibility that the claim may stem from “recovered memory syndrome” where claimants do not suspect that they may have suffered child abuse until memories of that abuse emerge on prompting, often during therapy. It is been alleged with some force that such memories are wholly unreliable (see S Brandon, J Boakes, D Glaser and R Green “Recovered Memories of Childhood Sexual Abuse” (1998) 172 Br J Psychiatry 296 - 307). The prospects of such claims causes organisations such as the British False Memory Society considerable concern. However, the task of distinguishing between genuine and mistaken claimants in cases of sexual abuse must be one for the courts, not the limitations regime, and, given that there are well documented cases where the victims of such abuse have been unable to bring actions against their abusers for several years, the risk that some claims might be false cannot be used as the sole justification for having a long-stop limitation period for personal injury claims.    [Back]

Note 81    See paras 3.156 - 3.169 below.    [Back]

Note 82    This problems is illustrated by cases such as Headford v Bristol & District Health Authority, [1995] PIQR P180 and Turner v WH Malcolm Ltd (1992) 15 BMLR 40 which we highlighted in the Consultation Paper (at para 12.142, n 212). See further paras 3.127 - 3.128 below.    [Back]

Note 83    See paras 3.127 - 3.133 below.    [Back]

Note 84    See paras 2.14 - 2.18 above, for a discussion of cases on what amounts to ‘personal injury’ under the current definition.    [Back]

Note 85    The same applies to other modifications to the core regime which we recommend for personal injury claims. See para 3.160 below.    [Back]

Note 86    See Howe v David Brown Tractors (Retail) Ltd [1991] 4 All ER 30.    [Back]

Note 87    See para 2.36 above.    [Back]

Note 88    See Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384; Bell v Peter Browne & Co [1990] 3 All ER 124.    [Back]

Note 89    See paras 2.78 - 2.79 above. ‘Mental disorder’ is defined according to the Mental Health Act 1983, s 1(2) as “mental illness, arrested or incomplete development of mind, psychopathic disorder and any other disorder or disability of mind”. “Psychopathic disorder” is defined as “a persistent disorder or disability of mind (whether or not including significant impairment of intelligence) which results in abnormally aggressive or seriously irresponsible conduct on the part of the person concerned”.    [Back]

Note 90    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.115.    [Back]

Note 91    See para 3.121 below.    [Back]

Note 92    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.129 - 12.136.    [Back]

Note 93    Law Reform Committee, Twentieth Report (Interim Report on Limitation of Actions: in Personal Injury Claims) (1974) Cmnd 5630, para 108.    [Back]

Note 94    See the Law Reform Committee, Twentieth Report (Interim Report on Limitation of Actions: in Personal Injury Claims) (1974) Cmnd 5630, para 107 - 109.    [Back]

Note 95    Although, as we shall see below, we do make use of the ‘representative adult’ in relation to adult disability where there is no necessary end to the disability.    [Back]

Note 96    See paras 3.102 - 3.107 above.    [Back]

Note 97    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.143 - 12.144.    [Back]

Note 98    Limitation of Actions, Consultation Paper No 151 (1998), para 12.115.    [Back]

Note 99    See para 3.115 above.    [Back]

Note 100    Limitation of Actions, Consultation Paper No 151 (1998), para 12.142.    [Back]

Note 101    Different issues arise in relation to personal injury claims, where we have proposed that there should not be any long-stop limitation period, and we discuss these below. See paras 3.126 - 3.132 below.    [Back]

Note 102    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.123 - 12.125.    [Back]

Note 103    Mental Incapacity (1995) Law Com No 231, clause 2 of the Draft Bill annexed to that Report.    [Back]

Note 104    It was pointed out by Professor Andrew Tettenborn that without this clarification a claimant who had chosen to put himself physically beyond communication would benefit from an extension to the limitation period applying to his claim.    [Back]

Note 105    Limitation of Actions, Consultation Paper No 151 (1998), para 12.125.    [Back]

Note 106    See J Mosher, “Challenging Limitation Periods: Civil Claims by Adult Survivors of Incest” (1994) 44 U of Toronto LJ 169, 214.    [Back]

Note 107    We discuss the problems posed for the limitations regime by claims in relation to sexual abuse in paras 3.162 and 4.23 - 4.33 below.    [Back]

Note 108    See Purnell v Roche [1927] 2 Ch 142.    [Back]

Note 109    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.126 - 12.128.    [Back]

Note 110    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.142, and nn 212 and 213.    [Back]

Note 111    [1995] PIQR P180.    [Back]

Note 112    The extended protection given to claimants under a disability has also caused difficulties where the proceedings have been issued, but the claimant’s representatives have been dilatory in bringing them to trial. In Tolley v Morris [1979] 1 WLR 205 the claimant was injured in a road traffic accident as a child. The case was eventually tried over fifteen years after the accident. The House of Lords noted that as the claimant would be able to issue a fresh writ until the limitation period expired, no useful purpose would be served by dismissing the action for want of prosecution. See also Turner v WH Malcolm Ltd (1992) 15 BMLR 40.    [Back]

Note 113    [1995] PIQR P180.    [Back]

Note 114    [1995] PIQR P180, P185.    [Back]

Note 115    (1995) 14 CJQ 258.    [Back]

Note 116    It should also noted that the present law does impose a long-stop (of ten years) on personal injuries where the injury is caused by a defective product (Limitation Act 1980, s 11A(3)), applicable even where the claimant is under a disability - see s 28(7)). Further, though perhaps less relevant, s 28(4) imposes a long-stop of thirty years for claimants under a disability in the case of an action to recover land or money charged on land.    [Back]

Note 117    In some cases, the claimant may both be a minor and otherwise lack capacity. In such cases, the claimant will remain protected under our recommendations in respect of minority until majority. Where the claimant reaches majority before the end of the ten year ‘protection period’, he or she will continue to be protected by that period.    [Back]

Note 118    Paras 12.151 - 12.153, Limitation of Actions, Consultation Paper No 151 (1998).    [Back]

Note 119    IN Duncan Wallace QC and the Construction Industry Council.    [Back]

Note 120    [2001] 1 All ER 172. See the discussion in paras 2.84 - 2.88 above.    [Back]

Note 121    [2001] 1 All ER 182. See also Cave v Robinson Jarvis & Rolf [2001] EWCA Civ 245, (unreported) 20 February 2001, discussed in para 2.88 above.    [Back]

Note 122    See para 2.87 above.    [Back]

Note 123    See Sheldon v Outhwaite [1996] 1 AC 102, 145 per Lord Browne-Wilkinson.    [Back]

Note 124    C Nasir, “Deliberate Concealment and the Limitation Act”, (2000) New LJ 1526 - 1528. See also J O’Sullivan, “Intentional Acts, Breaches of Duty and the Limitation Act - A Warning for Negligent Professionals” (2000) 16 PN 241 - 251.    [Back]

Note 125    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.146 - 12.147. Our recommendation that the primary limitation period should start from the date of knowledge makes the distinction between initial and subsequent concealment largely irrelevant; and in consequence the unsatisfactory decision in Sheldon v Outhwaite (Underwriting Agencies) Ltd [1996] AC 102 (discussed in Limitation of Actions, Consultation Paper No 151 (1998), paras 8.17 - 8.20, and 12.146 - 12.147) is nullified.    [Back]

Note 126    See Limitation of Actions, Consultation Paper No 151 (1998), para 12.154.    [Back]

Note 127    Limitation Act 1980, s 32(1)(a). See paras 2.80 - 2.83 above.    [Back]

Note 128    That is, in respect of claims for a specified amount (previously known as a liquidated pecuniary claim); a claim to the personal estate of a deceased; claims to recover land and claims in respect of mortgages (see paras 2.91 - 2.92 above).    [Back]

Note 129    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.155 - 12.167.    [Back]

Note 130    A member of the Council of Her Majesty’s Circuit Judges and Henriques J (responding on behalf of the Northern Circuit).    [Back]

Note 131    See the cases cited in paras 8.33 to 8.35 of the Consultation Paper.    [Back]

Note 132    See para 12.157, Limitation of Actions, Consultation Paper No 151 (1998).    [Back]

Note 133    Limitation of Actions, Consultation Paper No 151 (1998), para 12.157.    [Back]

Note 134    Limitation Act 1980, s 31(6). See Limitation of Actions, Consultation Paper No 151 (1998), paras 8.44 - 8.48.    [Back]

Note 135    Limitation Act, s 31(7).    [Back]

Note 136    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.168 - 169.    [Back]

Note 137    Introduced by the Limitation Act 1939 on the recommendation of the Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (1936) Cmd 5334, para 21.    [Back]

Note 138    In line with the approach we recommend in paras 3.89 - 3.91 in the context of joint claims made by trustees and personal representatives.    [Back]

Note 139    Limitation of Actions, Consultation Paper No 151 (1998), para 12.177.    [Back]

Note 140    Limitation of Actions, Consultation Paper No 151 (1998), paras 12.178 - 12.181.    [Back]

Note 141    And, as Professor Andrew Tettenborn noted, the acknowledgor may be able to sue his or her advisor in any case where prejudice had been suffered.    [Back]

Note 142    See paras 2.13 and 2.37 above.    [Back]

Note 143    See Limitation of Actions, Consultation Paper No 151 (1998), paras 12.187 - 12.196.    [Back]

Note 144    This has been recognised by the Court of Appeal in a number of cases where members of the court have noted that, though they themselves might well have decided the case differently, it is not appropriate to overturn the exercise of the discretion by the first instance judge. See, for example Farthing v North Essex HA [1998] Lloyd’s Rep Med 37, Hammond v West Lancashire HA [1998] Lloyd’s Rep Med 146, Coad v Cornwall & Isles of Scilly HA [1997] 1 WLR 189.    [Back]

Note 145    Harrison v Allerdale DC (unreported, 19 April 1989); Hartley v Birmingham City District Council [1992] 2 All ER 213.    [Back]

Note 146    The Law Reform Committee assumed that it would only apply in “a residual class of cases”: Twentieth Report (Interim Report on Limitation of Actions: in Personal Injury Claims) (1974) Cmnd 5630, para 56.    [Back]

Note 147    Twentieth Report (Interim Report on Limitation of Actions: in Personal Injury Claims) (1974) Cmnd 5630, para 57.    [Back]

Note 148    See Walkley v Precision Forgings Ltd [1979] 1 WLR 606.    [Back]

Note 149    See Thompson v Brown [1981] 1 WLR 744, 751 per Lord Diplock.    [Back]

Note 150    As the Court of Appeal noted in Guidera v NEI Projects (India) Ltd (CA, unreported, 30 January 1990): “So far as the effect of the delay upon the cogency of the evidence was concerned, the judge pointed out, with justice, that even if the plaintiff were presumed to have ‘knowledge’ by April 1976, it was still 23 ½ years after his initial exposure to asbestos. By then, both sides would have been in considerable difficulty in calling evidence of conditions at Poplar Power Station at the material time, particularly as during the construction of this Power Station conditions were obviously changing all the time.” (Transcript, p 20).    [Back]

Note 151    See Firman v Ellis [1978] QB 886.    [Back]

Note 152    See Limitation of Actions, Consultation Paper No 151 (1998), paras 9.7 - 9.11.    [Back]

Note 153    Limitation of Actions, Consultation Paper No 151 (1998), para 14.6.    [Back]

Note 154    The Unfair Contract Terms Act 1977 applies to agreements to shorten the statutory limitation period for “business liability” in relation to claims for negligence and to claims for breach of contract where one party deals as a consumer or on the other party’s standard terms. It would appear that an agreement to extend the statutory limitation period would not be caught by the Act.    [Back]

Note 155    SI 1999 No 2083. If contained in a consumer contract, a clause altering the statutory limitation period might be struck down as “an unfair term”: Reg 5(1).    [Back]

Note 156    As a result it may be of no effect if it falls within the Unfair Contract Terms Act 1977, s 2(1) (business liability for death or personal injury caused by negligence), s 5 (liability in tort for loss or injury caused by goods proving defective while in consumer use), s 6(1) (implied term as to title in sales), s 6(2) (implied terms as to quality, description etc in sales and hire purchase) or s 7(2) (the equivalent in other contracts under which the ownership of goods passes); or it may be subjected to a reasonableness test under s 2(2) (business liability for other loss or damage), ss 6(3) or 7(3) (the equivalent of ss 6(2) and 7(2) but in business to business contracts) or s 3(2)(a) (when in a consumer contract on the defendant’s standard written terms of business).    [Back]

Note 157    It neither restricts one party’s liability within the definition given by Unfair Contract Terms Act 1977, s 13, nor allows him to perform in a way which is different to what the other party reasonably expected within s 3(2)(b).    [Back]

Note 158    See especially SI 1999 No 2083, reg 5(1).    [Back]

Note 159    Section 11(1) provides that In relation to a contract term, the requirement of reasonableness for the purposes of this Part of this Act, s 3 of the Misrepresentation Act 1967 and s 3 of the Misrepresentation Act (Northern Ireland) 1967 is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made. Section 11(5) states that it is “for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does”.    [Back]

Note 160    Limitation of Actions, Consultation Paper No 151 (1998), para 14.6.    [Back]

Note 161    Council Directive 85/374/EC.    [Back]

Note 162    Section 10 (evasion by secondary contract), as interpreted in Tudor Grange Holdings Ltd v Citibank NA [1992] Ch 53, does not apply.    [Back]

Note 163    Though the operation of these Regulations in this context is not wholly clear since the waiver of the limitation period may be exempt from control as part of the definition of the main subject matter of the contract: SI 1999, No 2083, reg 6(2).    [Back]

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