Beware! Don’t be time-barred03 Dec 2020
One of the first things we check when we are consulted by clients in respect of potential claims which they want to pursue or which they need to defend is the issue of limitation.
Depending on the type of claim in question, there are applicable limitation periods within which proceedings must be commenced in order to avoid the possibility of the claim being time-barred.
This is important because, where any limitation period has already expired, a Defendant will have an absolute defence to a claim brought out of time. Limitation periods will generally run from the date on which a cause of action accrues or sometimes later, depending on when a Claimant discovers the relevant facts which give rise to the claim.
The Limitation Act 1980 stipulates certain time limits for different classes of action. For example, to avoid being time-barred:
- claims based on simple contract must be commenced within 6 years of the date of the breach of contract;
- claims for personal injury must be commenced within 3 years of the later of the date the cause of action accrued and the date of knowledge of the person injured (subject to the Court’s discretion);
- claims for defamation must be commenced within 1 year of the date the cause of action accrued (subject to the Court’s discretion);
- claims to recover rent must be commenced within 6 years of the date on which the rent became due;
- claims to recover money secured by a mortgage must be commenced within 12 years from the date on which the right to receive the money accrued.
It is possible for potential parties to proceedings to stop time running for limitation purposes by agreement, known as a standstill agreement, in which the Defendant agrees not to rely on any limitation defence.
Be warned that even if proceedings have been commenced within the applicable limitation period, if the claim is later struck out or amended, this might result in any fresh claim being time-barred if the limitation period has by then expired.
Leaving it to the last minute to issue proceedings to pursue a claim can be fraught with risk as, for example, the Court may be closed or there may be a delay between when the Court receives the claim papers and when they are processed or the Court may reject any claim papers owing to errors in the paperwork or the amount of the Court issue fee paid.
Our firm advice to clients is to seek legal advice as soon as possible if you believe you have a claim and to find out when the applicable limitation period for that claim expires in order to make sure that the deadline is not missed. Even if you are in settlement discussions with the other party to resolve your claims, you should keep a firm eye on when the limitation period expires.
This blog was prepared on 07 February 2020. Please note it is not intended to be advice and should not be relied upon as such.