Limitation: types of claim — overviewLimitation Act 1980

The Limitation Act 1980 sets the time limits within which a claimant is entitled to 'bring a claim'. Which time limit applies depends on the type of claim.

Tort

The general rule is that claims based in tort (for example, negligent breach of duty) are subject to a six year limitation period. Most torts require proof of the damage or loss incurred and the time from when the six year period starts to run is the date from which such damage is sustained. There are a number of torts which are actionable per se (ie no proof of damage is required) such as defamation claims, nuisance and trespass. In such cases, the six year limitation period starts to run from the date of commission of the wrongful act.

There are a number of exceptions to the general six year limitation, including: personal injury (three years) and defamation (one year).

A relationship can give rise to concurrent duties in both contract and tort. Although the general limitation period is six years for actions founded in both tort and contract, since time starts to run in contract claims from the date of the breach and, in tort claims, from the date of the damage, which may be later, tort claims can provide a more generous time limit in certain cases.

Contract

The general rule is that claims based in contract are subject to a six year limitation period. Time starts running from the date of the breach. However, special rules apply for contracts under seal (speciality), mortgagee claims for a shortfall on sale, certain loans, personal injuries arising from breach of duty under a contract and to claims involving fraud, deliberate concealment or mistake. Special rules also apply where a debtor acknowledges the debt or makes part payment (section 29 of the Limitation Act).

Parties to a contract can agree that a different period of limitation shall apply, however, this is subject to rules on exemptions and the reasonableness test under the Unfair Contract Terms Act 1977.

Where a relationship gives rise to concurrent duties in both contract and tort; although the general limitation period in both cases is six years, since time starts to run in contract claims from the date of the breach and, in tort claims, from the date of the damage, tort claims can provide a more generous time limit in certain cases.

Defamation

In claims where the cause of action arises after 3 September 1996, the limitation period for claims for libel, slander, slander of title or goods and other malicious falsehood is one year. This is subject to the court's discretion to disapply the limitation. For claims where the cause of action accrued before 4 September 1996 the limitation period for libel and slander claims is three years and for malicious falsehood claims it is six years.

In defamation claims, the cause of action accrues on publication. In malicious falsehood claims (including slander of title or goods), there are additional requirements of proof to be established by the claimant.

Professional negligence

Professionals owe duties to their clients in both contract and tort. The limitation period for claims founded in tort and contract are both six years. However, since time starts to run in contract claims from the date of the breach and, in tort claims, from the date of the damage, tort claims can provide a more generous time limit in certain cases. Additionally, negligence claims in tort, but not in contract, are also subject to the latent damage provisions in sections 14A and 14B of the Limitation Act 1980.

Determining when the damage occurred for the purposes of calculating the limitation period is a question of fact in each case and one that has taxed the courts at all levels. This is particularly so with regard to questions as to whether 'damage' for this purpose can include a loss arising even or solely 'on a contingency'.

Latent damage

The relevant provisions are contained in sections 14A and 14B of the Limitation Act 1980 and apply only to negligence claims in tort. Since the general six year limitation in tort runs from the date of the damage, this caused hardship to claimants who, through no fault of their own, were unaware of the existence of such damage (because it was hidden) until after expiration of the six year limitation.

Section 14A provides a three year limitation period which commences from a 'starting date'. That 'starting date' is dependant upon the time when the claimant had a right to bring an action and acquired or ought reasonably to have acquired certain knowledge about the material facts in respect of which the damage is claimed and the identity of the defendant. This provision is, however, subject to a long-stop: no claim may be brought more than 15 years after the occurrence of the act/omission alleged to constitute the negligence (there is an exception for negligence actions involving personal injuries).

Fraud, deliberate concealment and mistake

Under section 32 of the Limitation Act 1980 the running of any applicable time limit is suspended where the action is based upon the fraud of the defendant, where the defendant has deliberately concealed any fact relevant to the claimant's right of action or where the action is for relief from the consequences of a mistake (of fact or law).

The claimant bears a burden of proof to show that it could not have discovered the true position without exceptional measures which it could not reasonably have been expected to take.