Chapter 11Business and the law of tortLimitation of actions
The right to bring legal action does not last indefinitely.
The time limits within which action must be brought are
covered by the Limitation Act 1980 and are as follows:
1 An action in tort must normally be brought within six
years of the date when the cause of action accrued (s 2).
The period of limitation normally runs from the date
when the tort was committed or when the damage
occurred. The Latent Damage Act 1986 amended the
Limitation Act 1980 to provide for an extended period
of limitation in ‘latent damage’ negligence cases (not in-
volving personal injury). Under s 14A of the 1980 Act,
the period of limitation may be extended by three years,
with the three-year period starting from when the
claimant had the knowledge required to bring an action
for damages in respect of the relevant damage and
a right to bring an action. A recent House of Lords case
considered what constitutes the relevant ‘knowledge’
under s 14.
2 An action in negligence, nuisance or breach of statutory
duty for damages for personal injury must be brought
within three years (s 11). The period of limitation runs
from the date when the cause of the action accrued (i.e. the
date of injury) or the date of the claimant’s knowledge
that the injury was significant and that it was attributable
in whole or in part to the acts or omissions which are
alleged to constitute the negligence, nuisance or breach
of duty. These time limits may be extended as follows:
■where fraud, concealment or mistake is alleged, time
does not run until the claimant has discovered the
fraud, concealment or mistake or could with reason-
able diligence have discovered it;
■if the claimant is under a disability, such as minority
or mental incapacity, the time limits do not start to
operate until the disability is removed, i.e. in the case
of a minor, on reaching the age of 18.
The application of s 11 was considered in the following
case.355
December 1998. The scale of the company’s losses which
necessitated much more substantial injections of cash
than had been expected should have alerted Haward to
the possibility that Fawcetts had been negligent.Hawardv Fawcetts(a firm) (2006)Haward acquired a controlling interest in a company in- He was aware from the outset that the company
would require the injection of further capital, but further
significant investments in 1995, 1996, 1997 and 1998
did not improve matters and the company failed in 1998.
Fawcetts, a firm of accountants, had advised Haward
throughout. Haward then sought the advice of a spe-
cialist in corporate rescue and in May 1999 he began to
question the soundness of the financial advice he had
received from Fawcetts. The claim for negligence was
launched in December 2001. Applying the basic six-year
rule, the claims for losses arising in 1994 and 1995 were
time-barred. Haward sought to rely on s 14A to extend
the limitation period to cover these losses. He claimed
that he did not have the requisite knowledge until
December 1998 and therefore he had commenced his
claim within the three-year period. The House of Lords
held that Haward did have the required knowledge before
December 1998. The requisite knowledge was knowledge
of facts constituting the essence of the complaint, not
when Haward first realised that he might have a claim in
negligence against Fawcetts. Time started to run from
the point at which Haward knew enough to justify invest-
igating the possibility that Fawcetts’ advice had been
defective and he had this knowledge much earlier than
Av Hoare(2008)In this case, which involved six appeals, the House of
Lords had to decide whether claims for sexual assault
and abuse which had taken place many years before
proceedings were started were barred under the
Limitation Act 1980. The claimants were seeking to bring
themselves within s 11 of the Act by arguing that their
knowledge had not arisen within the three-year time
limit laid down for claims for personal injury caused by
negligence, nuisance or breach of statutory duty, or that
the court should exercise its discretion under s 33 in
their favour. The difficulty was that in an earlier case,
Stubbingsv Webb(1993), the House had decided that s
11 did not apply to cases involving deliberate assault.
The Lordships held (overruling Stubbingsv Webb) that
actions for personal injury for an intentional trespass to
the person fell within s 11 and therefore the court had a
discretion under s 33 to extend the time limit.The Defamation Act 1996 reduced the limitation period
for actions in defamation and malicious falsehood from
three years to one year. The court can exercise its discre-
tion to allow a later claim if this is reasonable.