Reform of the Law on Limitation of Actions - Government Accepts Law Commission Proposals

Profession:Herbert Smith

The established law on limitation periods looks set for

a radical change following the Government's announcement on 16 July 2002

that it accepts in principle the Law Commission's proposals for reform of

the law on limitation of actions for civil claims. The Government has said

it plans to introduce new legislation after further consideration and when

the opportunity arises.

Broadly, under the proposals, a claim would have to be brought within a

period of three years from knowledge of the cause of action with a

long-stop period of ten years from accrual of the cause of action, after

which a claim could not be brought. The Government believes this will

provide greater clarity and certainty in the law by unifying the various

disparate periods of time in which claimants currently have to bring

claims in a wide range of civil proceedings.

Problems with the Limitation Act 1980

In a consultation paper published in 1998, the Law Commission described

the current law on limitation as unfair, complex, uncertain and outdated.

The Limitation Act 1980 makes different provisions in respect of different

causes of action, and it is not always clear into which category a cause

of action falls. The date on which the limitation period starts to run

does not always take account of the claimant's knowledge of the relevant

facts, leading to cases of unfairness, and provisions relating to

deliberate concealment have not worked well. Indeed, one recent example of

the uncertainties in relation to the Limitation Act 1980 was the Court of

Appeal decision in Brocklesby v Armitage Guest [2001] 1 All ER 172

the effect of which was that under section 32 of the Act a professional

subject to a claim for negligent advice would never have a valid

limitation defence. This was reversed by the House of Lords in April 2002

in Cave v Robinson Jarvis & Rolf [2002] UKHL 18, but caused

much confusion and concern in the meantime.

The Law Commission's proposals

Following a consultation period, the Law Commission's final

recommendations were set out in its Report on Limitation of Actions

published in July 2001.

It recommended that the Limitation Act 1980 be repealed and replaced

with a new Act setting out a wholly new core limitation regime for the

majority of claims. This core limitation regime, which will apply to the

majority of claims for a remedy for a wrong, or for enforcement of a

right, and to claims for restitution, would introduce a primary limitation

period of three years...

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