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The Law Commission

(LAW COM No 270))

LIMITATION OF ACTIONS

Item 2 of the Seventh Programme of Law Reform:

Limitation of Actions

Laid before Parliament by the Lord High Chancellor pursuant to section 3(2) of the Law Commissions Act 1965

Ordered by The House of Commons to be printed

9 July 2001

LONDON: The Stationery Office

HC 23

The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law.

The Law Commissioners are:

The Honourable Mr Justice Carnwath CVO, Chairman
Professor Hugh Beale
Mr Charles Harpum
Professor Martin Partington
Judge Alan Wilkie QC

The Secretary of the Law Commission is Mr Michael Sayers and its offices are at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ.

The terms of this report were agreed on 3 April 2001.

The text of this report is available on the Internet at:

http://www.lawcom.gov.uk

CONTENTS

	Paragraph
EXECUTIVE SUMMARY	Summary
PART I: INTRODUCTION
1. THE SCOPE OF THIS REVIEW	1.1
2. PROBLEMS WITH THE CURRENT LAW	1.4
3. THE PROVISIONAL PROPOSALS IN OUR CONSULTATIONPAPER	1.10
4. OUTLINE OF OUR MAIN RECOMMENDATIONS	1.12
5. THE STRUCTURE OF THIS REPORT	1.18
PART II: AN OUTLINE OF THE PRESENT LAW
1. INTRODUCTION	2.1
2. CLAIMS FOR BREACH OF CONTRACT	2.2
3. CLAIMS FOUNDED ON TORT	2.4
(1) General	2.4
(2) Claims for damages consisting of or including damages for personal injuries and related claims	2.9
(a) General	2.9
(i) Damages in respect of personal injuries to the claimant or any other person	2.14
(ii) Actual and constructive knowledge	2.19
(b) Claims in respect of personal injuries surviving under the Law Reform (Miscellaneous Provisions) Act 1934	2.24
(3) Claims under the Fatal Accidents Act 1976	2.25
(4) Latent damage (other than personal injury) in the tort of negligence	2.26
(5) Claims under the Consumer Protection Act 1987	2.35
(6) Claims for defamation and malicious falsehood	2.37
(7) Conversion	2.38
4. CLAIMS IN RESPECT OF TRUST PROPERTY	2.39
(1) Claims for breach of trust	2.39
(2) Claims in respect of the personal estate of a deceased person	2.46
5. CLAIMS FOR RESTITUTION	2.48
6. CLAIMS TO RECOVER LAND AND RELATED CLAIMS	2.52
(1) Claims to recover land	2.52
(2) Claims to recover proceeds of the sale of land	2.60
(3) Claims to recover rent	2.61
7. CLAIMS IN RELATION TO MORTGAGES AND CHARGES	2.62
8. MISCELLANEOUS CLAIMS	2.67
(1) Claims on a judgment	2.67
(2) Arbitration	2.69
(3) Claims on a statute (including claims for contribution)	2.71
(a) Claims on a statute	2.71
(b) Claims for contribution under the Civil Liability (Contribution) Act 1978	2.77
9. FACTORS POSTPONING THE RUNNING OF TIME	2.78
(1) Claimant under a disability	2.78
(2) Claim based on fraud	2.80
(3) Deliberate concealment	2.84
(4) Relief from the consequences of a mistake	2.89
(5) Acknowledgment and part payment	2.91
10. ADDITIONAL ISSUES	2.93
(1) What happens when time expires?	2.93
(2) What the claimant has to do to prevent the expiry of the limitation period	2.94
(3) Contracting out of, or waiving, the statutory limitation period	2.96
(4) Laches and acquiescence	2.97
(5) Application of the 1980 Act to equitable remedies by analogy	2.100
(6) Burden of proof	2.103
(7) The 'Sevcon' problem: restrictions on the claimant's right to sue	2.104
(8) Adding new claims in existing proceedings	2.105
(9) Commencement and retrospectivity	2.114
PART III: REFORM I: THE CORE REGIME
1. INTRODUCTION	3.1
2. WHEN SHOULD TIME START TO RUN?	3.5
(1) The date of knowledge	3.5
(2) Definition of the date of knowledge: the relevant facts	3.8
(a) The facts establishing the cause of action	3.9
(b) The identity of the defendant	3.14
(c) The significance of the claim	3.15
(i) Should the test for the date of knowledge incorporate knowledge of the 'significance' of the claim?	3.17
(ii) The definition of 'significance': subjective or objective?	3.20
(iii) The definition of 'significance': are the present (or any) assumptions necessary?	3.25
(3) Definition of the date of knowledge: fact and law	3.35
(4) What is meant by 'actual knowledge'?	3.40
(5) What is meant by 'constructive knowledge'?	3.45
(6) Knowledge and experts	3.51
(7) Agency	3.61
(8) Knowledge and organisations	3.63
(a) The application of the 'date of knowledge' to organisations	3.63
(b) The test for an organisation's knowledge	3.67
(i) Actual knowledge	3.68
(ii) Constructive knowledge	3.74
(c) Concealment of information by a person whose knowledge would be attributable to the organisation	3.79
(9) Joint claimants	3.81
(10) Assignments	3.92
3. HOW LONG SHOULD THE PRIMARY LIMITATION PERIOD BE?	3.95
4. THE LONG-STOP LIMITATION PERIOD	3.99
(1) Should there be a long-stop limitation period?	3.99
(a) Claims other than for personal injuries	3.100
(b) Personal injury claims	3.102
(2) When should the long-stop limitation period start?	3.108
5. FACTORS EXTENDING OR EXCLUDING THE LIMITATION PERIODS	3.114
(1) Disability	3.114
(a) Minority	3.115
(i) Minority and the primary limitation period	3.115
(ii) Minority and the long-stop limitation period	3.118
(b) Adult disability	3.122
(i) The effect of adult disability	3.122
(ii) The definition of adult disability	3.123
(iii) Supervening disability	3.126
(iv) Should there be a limit to the protection given to adults under a disability in personal injury cases?	3.127
(2) Concealment	3.134
(a) The meaning of 'concealment'	3.134
(b) Concealment and the primary limitation period	3.138
(c) Concealment and the long-stop limitation period	3.140
(d) The long-stop limitation period and claims for fraud	3.143
(3) Acknowledgments and part payments	3.146
6. A JUDICIAL DISCRETION?	3.156
(1) A general discretion?	3.156
(2) A discretion in personal injury claims?	3.160
7. AGREEMENTS TO CHANGE THE LIMITATION PERIOD	3.170
PART IV: REFORM II: APPLICATION OF THE CORE REGIME
1. INTRODUCTION	4.1
2. CLAIMS TO RECOVER LOANS REPAYABLE ON DEMAND	4.4
3. CLAIMS ON A SPECIALTY	4.7
4. CLAIMS UNDER THE LAW REFORM (MISCELLANEOUS PROVISIONS) ACT 1934	4.10
5. CLAIMS UNDER THE FATAL ACCIDENTS ACT 1976	4.16
6. CLAIMS BY VICTIMS OF CHILD SEXUAL ABUSE	4.23
(1) Should any limitation period apply?	4.23
(2) Do any modifications need to be made to the core regime?	4.29
7. CLAIMS UNDER THE CONSUMER PROTECTION ACT 1987	4.34
8. DEFAMATION AND MALICIOUS FALSEHOOD	4.38
9. CLAIMS FOR CONVERSION	4.47
(1) Introduction	4.47
(2) The core regime and conversions unrelated to theft	4.49
(a) The definition of the date of knowledge	4.49
(b) The long-stop limitation period	4.52
(3) The core regime and conversions constituting or related to theft	4.54
(a) Should the primary limitation period apply?	4.54
(b) Theft and the long-stop limitation period	4.60
(4) The effect of the expiry of the limitation period	4.62
10. CLAIMS BY A SUBSEQUENT OWNER OF DAMAGED PROPERTY	4.68
11. CLAIMS FOR RESTITUTION	4.76
12. CLAIMS FOR A CONTRIBUTION OR AN INDEMNITY	4.80
(1) Contribution under section 1 of the Civil Liability (Contribution) Act 1978	4.80
(2) Contractual indemnity	4.84
(a) Introduction	4.84
(b) The primary limitation period	4.85
(c) A single long-stop limitation period	4.88
13. CLAIMS FOR BREACH OF TRUST AND RELATED CLAIMS	4.94
(1) Fraudulent breach of trust	4.97
(2) Claims to recover trust property	4.102
(a) Should there be a limitation period?	4.102
(b) Should the long-stop limitation period run from the date of the first breach of trust?	4.103
(c) Bare trusts	4.105
(d) Miscellaneous	4.107
(i) No benefiting from another beneficiary's claim	4.107
(ii) Limiting the liability of the trustee	4.108
(iii) Claims by persons other than beneficiaries	4.110
(3) Exclusions from the core regime	4.113
(4) Distinctions between law and equity	4.114
(a) Introduction	4.114
(b) Future or contingent interests	4.116
(5) Claims in respect of the personal estate of the deceased	4.120
14. CLAIMS TO RECOVER LAND AND RELATED CLAIMS	4.126
(1) The general position	4.126
(2) Special protection: claims by the Crown (other than in relation to foreshore) and by a spiritual or eleemosynary corporation sole	4.138
(3) Special protection: claims by the Crown to recover foreshore	4.145
(4) Miscellaneous provisions	4.148
(a) Squatters and the Crown	4.148
(b) The commencement of adverse possession	4.149
(5) Claims to recover the proceeds of the sale of land	4.151
(6) Provisions of the core regime which modify the long-stop limitation period	4.152
(7) Claims to recover rent	4.154
15. CLAIMS RELATING TO MORTGAGES AND OTHER CHARGES	4.158
(1) Introduction	4.158
(2) Claims by a mortgagee or chargee	4.160
(a) Claims to enforce a mortgage or charge over land	4.160
(b) Claims to enforce a mortgage or charge over personal property	4.167
(c) Claims to enforce a mortgage or charge over both land and personal property	4.170
(d) Claims to enforce an obligation secured by a mortgage or charge by suing on the covenant to repay	4.174
(e) Miscellaneous	4.178
(i) Mortgages and charges over future interests or life insurance policies	4.179
(ii) Possession by a prior incumbrancer	4.182
(iii) Possession by a mortgagee	4.185
(3) Claims by a mortgagor to redeem mortgaged property	4.186
(a) Claims to redeem mortgaged land	4.186
(b) The rule in Edmunds v Waugh	4.190
(c) Claims to redeem mortgaged personal property	4.192
(4) Expiry of the limitation period	4.195
16. CLAIMS ON A JUDGMENT OR ON AN ARBITRATION AWARD	4.197
17. CLAIMS ON A STATUTE	4.201
18. CLAIMS AGAINST PUBLIC AUTHORITIES	4.203
19. PROCEEDINGS UNDER THE COMPANIES ACT 1985	4.204
(1) Derivative claims	4.205
(a) The primary limitation period	4.208
(b) The long-stop limitation period	4.209
(2) Proceedings under section 459 of the Companies Act 1985	4.211
20. INSOLVENCY PROCEEDINGS	4.219
(1) Arrangements and Compromises	4.220
(a) Section 425 of the Companies Act 1985	4.221
(b) Voluntary arrangements	4.222
(i) Claims against a company, partnership or individual subject to a voluntary arrangement	4.223
(ii) Claims by a company, partnership or individual during the existence of a voluntary arrangement	4.225
(2) Administrative receivership and administration orders	4.226
(a) Claims by a company or partnership	4.226
(b) Claims against a company or partnership in administration	4.235
(c) Claims against a company in administrative receivership	4.238
(3) Winding-up proceedings	4.242
(a) Claims by a company or partnership during the course of the winding-up procedure	4.242
(b) Claims against a company or partnership during the course of the winding-up procedure	4.249
(4) Bankruptcy	4.254
(a) Claims against an individual bankrupt during the course of the bankruptcy procedure	4.254
(b) Claims brought by a trustee in bankruptcy on behalf of an individual during the course of the bankruptcy procedure	4.259
(5) Clawback claims: corporate insolvency	4.263
(6) Clawback claims: personal insolvency	4.265
21. EQUITABLE REMEDIES	4.268
(1) Equitable remedies and limitation periods	4.268
(2) Limitation periods and delay in claims in equity	4.274
22. THE INTER-RELATIONSHIP BETWEEN OUR PROPOSED CORE REGIME AND STATUTORY LIMITATION PERIODS OUTSIDE THE 1980 ACT	4.279
21. A 'SWEEPING-UP' OR 'DEFAULT' PROVISION	4.289
PART V: ADDITIONAL ISSUES
1. WHAT THE CLAIMANT NEEDS TO DO TO PREVENT THE EXPIRY OF THE LIMITATION PERIOD: ISSUE OR SERVICE OF PROCEEDINGS?	5.1
2. ADDING NEW CLAIMS IN EXISTING PROCEEDINGS	5.5
(1) New claims involving new causes of action after the expiry of the relevant limitation period	5.7
(2) New claims involving the addition or substitution of a party after the expiry of the relevant limitation period	5.12
3. THE EFFECT OF THE EXPIRY OF THE LIMITATION PERIOD	5.20
4. RESTRICTIONS ON THE CLAIMANT'S RIGHT TO SUE	5.24
5. THE BURDEN OF PROOF	5.29
6. COMMENCEMENT	5.33
7. THE DECISION IN ARNOLD v CENTRAL ELECTRICITY GENERATING BOARD	5.41
PART VI: SUMMARY OF RECOMMENDATIONS	Part VI
APPENDIX A: Draft Limitation Bill with Explanatory Notes	Appendix A
APPENDIX B: List of Persons and Organisations who commented on Consultation Paper No 151	Appendix B