If you know or suspect that you may have a claim, ask yourself whether you are aware of time limit within which you can bring that claim. Knowing that time limit can be important; if it expires before the claim has been issued, you may lose the right to pursue that claim altogether.
What are the usual time limits?
Many time limits (or Limitation Periods, as they are also known) are set out in the Limitation Act 1980.
For a claim in respect of a contract the period is limited to six years from the date the cause of action accrued (this is usually the date of the breach of contract).
For a claim in tort (for example a claim in negligence or nuisance) the period in question is also six years from the date the cause of action accrued. However, in these cases, the cause of action will usually accrue on the date that the damage first occurred.
Sometimes the period is longer; in the case of any action based on a deed, as opposed to a mere contract, the time limit will be twelve years from the date that the cause of action accrued.
When does the period start?
These general provisions can make potential claimants complacent about the period of time within which to bring a claim. If they are aware at all of any time limit then the period of six years seems to be a long period of time. However, it is important not only to know the period (say six years) it is also important to know when that period started. Difficulties can arise if the problems only surface many years after the contract was entered into. It is no good thinking you have six years from when you first discovered the problem!
There are other dangers. Whilst the time limits set out in the Limitation Act 1980 cover a large number of situations, there are some areas of practice in which the limitation period is significantly shorter, or where delays can cause a problem. For example
the limitation period for the bringing of an employment claim is only three months;
- if the remedy you are seeking is not just compensation (for example if you are seeking an injunction) there is a general rule that you have to do so “quickly”. The court has a discretion as to whether it will grant that kind of remedy; any delay in taking action (whatever the limitation period) makes it less likely that the court will do so.
Avoiding the problems
- So long as the claim is issued long before the expiry of the limitation period, the limitation issue can be ignored. But where claims only become apparent at or around about the time that the limitation period may be expiring, the claimant may need to look at other options in order to protect his position. For example:
- There may be arguments about precisely when the time began to run.When did the cause of action arise?The six year period will only commence from that date and there may be some doubt about it. Investigate the possibilities.
It is possible that the activity of the defendant in relation to a debt may have extended the period of time.Section 29 of the Limitation Act 1980 states that in relation to a debt and some other types of claim where the amount due is already known, the limitation period may be extended if the person liable for the claim has taken some step to acknowledge the claim or has made a payment in respect of it.In such circumstances the limitation period will be extended to a date six years from the date of that acknowledgment or payment.
In situations involving negligence, where the loss was not apparent at the time that the negligence took place, there is an alternative period of three years from the date on which the loss could reasonably have been discovered (up to a maximum of fifteen years).
In cases involving a claimant who has a legal disability (for example, some who is under the age of 18) the limitation period does not start whilst that disability continues.
Where the claim involves some form of fraudulent activity, the period may not start until the claimant had or could reasonably have discovered the fraud.
Good practice in this area involves the following:
- Make sure that you know time limits for issuing a claim.Interpret the rules as cautiously as you can so that you know the shortest period that might apply;
- Issue your claim well within that period in order to avoid any possible arguments that the time limit has expired;
- If it appears that the time limit has expired then this will make the claim more difficult to pursue but remember that there are certain exceptions to the general rule and consider all that may apply. Investigate these thoroughly; there may be arguments to show the limitation period has not expired or can be extended. In these situations it is usually still the case that the sooner you issue proceedings (which will preserve your right to pursue the claim) the better.