Statute Of Limitations: Supreme Court Considers When The 'Clock' Starts To Run In Professional Negligence Claims

• Published date: 22 June 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: Dillon Eustace
• Author: Mr John O'Riordan, Peter Bredin and Rachel Turner

The Supreme Court's decision in Smith v Cunningham & Others [2023] IESC 13 provides helpful direction on the sometimes difficult question as to the point from which a cause of action accrues in a claim for professional negligence.

Negligence Claims involving 'Pure' Economic Loss

Section 11(2) Statute of Limitations Act 1957 Act (the '1957 Act') states that "an action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued."

A previous Supreme Court decision, Brandley v Deane [2017] IESC 83, which involved a negligence claim for damage to property, held that the time begins to run, for the purposes of the 1957 Act, when the damage 'manifested' itself, which the Court has previously considered to be when the damage becomes capable of being 'discovered' and 'proved' by a plaintiff.

However, the difficulty in determining the point at which damage has manifested itself in, what are termed, 'purely' economic cases can make the application of the 1957 Act challenging. This includes claims for professional negligence. The Supreme Court acknowledged that the application of a single coherent test in such cases can be problematic, with issues including;

• the propensity in cases of this type for a cause of action to accrue without a prospective plaintiff being aware that a loss has been suffered; and

• the fact economic loss may be wholly or partially contingent reversible, uncertain and/or the product of fluctuations in valuations.

Background

The plaintiff in this case claimed damages arising from his purchase of a property in 2006. An engineer engaged by the vendor executed a 'Certificate of Compliance with Planning Permission and Building Regulations' at the time of the purchase. However, it was later discovered that the property did not, in fact, comply with the planning permission granted by the relevant local authority in 2004. The plaintiff contended that the defendant solicitors should have conducted planning searches in advance of the purchase and should have advised on the necessity of engaging an engineer to establish compliance with planning permission.

The planning issues only came to light when a subsequent contract, entered into by the plaintiff to sell the property, was rescinded in October 2008 for this reason. The sale did not complete and although retention planning was subsequently obtained, the value of the property was by then significantly reduced on account of the economic...