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When is a time limit not a time limit?

On the 7th of October 2015, the Court of Appeal overturned an earlier strike out of a professional negligence claim on limitation grounds. That is all well and good, but why is it important?

The professional negligence case of Blakemores v Scott & others had previously been struck out on the grounds that it was ‘too late’ – or statute barred. The Judge that initially heard the case was found to have been wrong to hold that the claimants had ‘relevant knowledge’ for the purposes of the Limitation Act 1980 at the time at which he (the Judge) had said they did. In this case, the clients had been aware that their solicitor had been negligent in failing to file an objection in a Land Registry matter. Importantly, they were not aware of the consequences of that failure until a much later stage. The Court of Appeal also permitted a late application to set aside default judgment on the grounds that the delay was excusable and to hold otherwise would be unjust in the circumstances.
Normally in a negligence claim the primary limitation period is six years from the event that caused loss. Sometimes however, the Claimant will not be aware that anything went wrong, and so section 14 Limitation Act 1980 (LA 1980) provides an alternative three-year limitation period, calculated by reference to when the claimant has (or should reasonably have acquired) knowledge of the relevant facts. The practical implications of this case mean that the test that has to be satisfied, when looking at this second three year limit, needs to be re-examined. The test states that this date of knowledge arises when a ‘reasonable person,’ who has suffered damage, will ‘consider it sufficiently serious to justify his instituting proceedings for damages’. This then starts the clock running.
On the facts of this case, knowing that the solicitors had been negligent at a certain stage, was not necessarily sufficient to have led the appellants to consider instituting proceedings. The Court would need to hear and try all of the facts before the ‘start date’ for limitation purposes under LA 1980, s 14A could be determined. On Appeal, the Court decided that it had been wrong to give summary judgement. The reasoning was that the Claimant did not have a full appreciation of the impact of the failure of the solicitors, and it was not enough to know simply of the failure. The significance of the failure, and that it would lead to loss, had not been appreciated.
Professional negligence can and does unfortunately happen. When it does the impact on individuals and their businesses can range from being an irritation to being catastrophic. It is vital to take expert advice, as the layers of complex law involved in this area are not for the uninitiated, or the faint of heart. For advice please contact Kevin Rogers.