Time Called For Brocklesby? Law Commission Recommend Shorter Limitation Periods

The Law Commission's report on limitation1 has recommended a major clarification and simplification of the limitation periods applying to all types of litigation. These proposals, if enacted, would have the effect of shortening the limitation periods for many professional indemnity actions. This will enable professionals to know for how long they need to maintain run-off insurance cover and to preserve their files. The Law Commission also recommend that the Brocklesby2 decision should be overturned.

It remains to be seen whether the Law Commission's proposals will be enacted. In the meantime, the House of Lords has the opportunity to reverse Brocklesby in the appeal in Cave v Robinson, Jarvis & Rolfe3 for which provisional leave for appeal has been granted.

The law today

The basic limitation period is six years from the date of the alleged breach of contract or, in tort cases, from the date when the claimant first suffers a loss. In professional negligence actions, there are concurrent rights of action in tort as well as contract, allowing claimants to take advantage of the longer limitation period allowed in tort4 . Whilst in many cases it has been held that loss is suffered at the date of the transaction giving rise to the problems5, the date of loss may be considerably later6.

There are many circumstances when the limitation period may be longer. In all negligence actions, Section 14A of the Limitation Act (introduced by the Latent Damage Act 1986) allows an additional period of three years from the date when the claimant first has knowledge of the loss giving rise to the claim, subject to a long stop period of 15 years from the date of the relevant events. The Brocklesby decision made claims possible for up to six years after the claimant could first reasonably discover the breach of duty with no overriding maximum.

The Law Commission's proposals

The Law Commission propose a standard core limitation regime. This will allow claimants three years from the date the claimant first knows, or ought reasonably to know:

(a) the facts which give rise to the action;

(b) the identity of the defendant; and

(c) that any injury, loss or damage was significant.

This will mean that limitation periods will generally begin to run at the same time as they now do under the Latent Damage Act. As at present under Section 14A, the claimant then has three years to bring the claim. This will never be longer than the present limitation period but may often...