The Law Commission

PART VI

SUMMARY OF RECOMMENDATIONS

We recommend that:-

When should time start to run?

(1) The primary limitation period should start to run from the 'date of knowledge' rather than, for example, the date the cause of action accrues (Paragraph 3.7, Draft Bill, Cl 1(1)).

(2) The date of knowledge (which is when the primary limitation period should start to run) should be the date when the claimant has (actual or constructive) knowledge of the following facts:-

(a) the facts which give rise to the cause of action;

(b) the identity of the defendant; and

(c) where injury, loss or damage has occurred or a benefit has been received, that the injury, loss, damage or benefit are significant. (Paragraph 3.32, Draft Bill, Cl 2(1)).

(3) For the purposes of the definition of the date of knowledge, a claimant will be deemed to know that the injury, loss, damage or benefit is significant if

(a) the claimant knows the full extent of the injury, loss, damage suffered by the claimant (or any other relevant person), or (in relation to a claim for restitution) of any benefit obtained by the defendant (or any other relevant person); or

a reasonable person would think that, on the assumption that the defendant does not dispute liability and is able to satisfy a judgment, a civil claim was worth making in respect of the injury, loss, damage or benefit concerned. (Paragraph 3.33, Draft Bill, Cl 2(5)).

(4) For the purposes of the test for the 'date of knowledge', the claimant is presumed to know the law, so that the claimant's lack of knowledge that the facts would or would not, as a matter of law, give rise to a cause of action shall be irrelevant. (Draft Bill, Cl 2(2)). This will not apply to

(a) a cause of action in respect of breach of duty where the breach of duty concerned is a failure to give correct advice as to the law, and the fact that correct advice had not (or may not) have been given shall be treated as one of the facts giving rise to the cause of action (Draft Bill, Cl 2(3)); or

(b) a cause of action in respect of restitution based on a mistake of law, and the fact that a mistake of law has been, or may have been, made, shall be treated as one of the facts giving rise to the cause of action. (Paragraph 3.39, Draft Bill, Cl 2(4)).

(5) ''Actual knowledge' should not be defined in the proposed legislation and should be treated as a straightforward issue of fact which does not require elaboration. (Paragraph 3.44).

(6) The claimant should be considered to have constructive knowledge of the relevant facts when the claimant in his or her circumstances and with his or her abilities ought reasonably to have known of the relevant facts. (Paragraph 3.50, Draft Bill, Cl 4(1)(a), 4(2)).

(7) Unless the claimant has acted unreasonably in not seeking advice from an expert, the claimant should not be treated as having constructive knowledge of any fact which an expert might have acquired. Where an expert has been consulted, the claimant will not be deemed to have constructive knowledge of any information which the expert either acquired, but failed to communicate to the claimant, or failed to acquire. (Paragraph 3.60, Draft Bill, Cl 4(1)(b)).

(8) A claimant is to be treated as knowing any fact of which his or her agent has actual knowledge if, the agent in question

(a) is under a duty to communicate that fact to the principal, or

(b) has authority to act in relation to the cause of action.

but if this does not apply, no person shall be treated as having knowledge of a fact merely because an agent of his has knowledge of a fact (Paragraph 3.62, Draft Bill, Cl 4(3)).

(9) Our provisions in respect of 'corporate knowledge' should apply to the following 'relevant bodies': all corporations (whether bodies corporate or corporations sole), and all other bodies which have a right to sue or be sued in their own names, including Government departments which are 'authorised departments' in accordance with section 17 of the Crown Proceedings Act 1947 and partnerships. (Paragraph 3.66, Draft Bill, Cl 5(2)).

(10) A relevant body should be considered to have actual or constructive knowledge when that knowledge is imputed to the body under our recommendations in relation to agency, or when

(a) an officer of the body (including a partner in the case of a partnership), or a person with authority to take the relevant decisions on its behalf; or

(b) an employee of the relevant body who is under a duty to disclose that information to someone with that authority or to any other employee

has that knowledge. For these purposes, decisions in relation to the claim are (a) a decision to seek legal advice in relation to the claim and (b) a decision whether or not to issue proceedings in relation to the claim. (Paragraph 3.78, Draft Bill, Cl 5(1), (3) and (5)).

(11) Where an officer of the body, or a person with authority to act on the information on behalf of the relevant body, or any employee of the relevant body who is under a duty to communicate that information to a person with that authority or another employee

(a) is a defendant to the claim of the relevant body; or

(b) has dishonestly concealed information relevant to that claim from someone whose knowledge would be attributed to the relevant body under the rule set out in paragraph (10) above

that person's knowledge shall not be regarded as the knowledge of the relevant body. (Paragraph 3.80, Draft Bill, Cl 5(4), (5)).

(12) Where a claim is brought by two or more claimants who are jointly entitled to the remedy sought, the start of the primary limitation period shall be calculated separately for each claimant, by reference to the knowledge of that claimant. A defence may only be raised against those claimants against whom the primary limitation period has expired. (Paragraph 3.87, Draft Bill, Cl 6(1), (2)).

(13) Where a claim must be brought by two or more claimants acting as trustees or personal representatives, the primary limitation period in respect of that claim should start from the earliest date on which one of the trustees or personal representatives has actual or constructive knowledge of the relevant facts. (Paragraph 3.91, Draft Bill, Cl 6(3), (4)).

(14) Where a cause of action has been assigned to the claimant:

(a) the expiry of the primary limitation period in relation to a claim by any person in whom the cause of action was vested before the claimant will give rise to a defence (Draft Bill, Cl 7(2));

(b) where the primary limitation period had started to run in relation to a claim by any person in whom the cause of action was vested before it was assigned to the claimant because that person acquired the relevant knowledge at the time when he or she had the right to bring a claim, it will continue to run against the claimant (Draft Bill, Cl 7(3), (6));

(c) where the primary limitation period has not started to run before the date of the assignment it will run from the later of

(i) the date of the assignment and

(ii) the date of knowledge of the claimant (Paragraph 3.94), Draft Bill, Cl 7(4)).

How long should the primary limitation period be?

(15) The primary limitation period applying under the core regime should be three years. (Paragraph 3.98, Draft Bill, Cl 1(1)).

The long-stop limitation period

(16) A claim, other than in respect of a personal injury, should be subject to a long-stop limitation period of ten years. (Paragraph 3.101, Draft Bill, Cl 1(2)).

(17) No long-stop limitation period should be applied to claims in respect of personal injuries to the claimant (or, in the case of an action brought under the Law Reform (Miscellaneous Provisions) Act 1934 or the Fatal Accidents Act 1976, to the deceased). (Paragraph 3.107, Draft Bill, Cl 9).

(18) The long-stop limitation period should, as a general rule, start to run from the date on which the cause of action accrues, but that there should be an exception for those claims in tort where injury, loss or damage is an essential element of the cause of action and for claims for breach of statutory duty. In these cases, the long-stop limitation period will start to run from the date of the act or omission that gives rise to the cause of action. (Paragraph 3.113, Draft Bill, Cl 3).

Factors extending or excluding the limitation periods

(19) During the period when the claimant lacks capacity because he or she is under the age of eighteen

(a) the primary limitation period shall not run;

(b) any long-stop limitation period shall run but will end on the later of the following dates:

(i) the date on which the claimant reaches the age of twenty-one; or

(ii) the date ten years after the starting date for the long-stop limitation period. (Paragraph 3.121, Draft Bill, Cl 28).

(20) There should be no specific provision for the psychological incapacity suffered by victims of sexual abuse. (Paragraph 3.125).

(21) During the period when a claimant over eighteen lacks capacity because he or she is unable by reason of mental disability to make a decision for him or herself on the matters in question, or he or she is unable to communicate his or her decision on that matter because of mental disability or physical impairment (Draft Bill, Cl 29(6)):

(a) subject to sub-paragraph (c) below, the primary limitation period should not run. (Draft Bill, Cl 29(2))

This will apply whether the lack of capacity exists on the date when the cause of action accrues (so that the primary limitation period does not start running), or develops after that date (suspending the primary limitation period after it has begun to run). When the claimant regains capacity, the primary limitation period will continue to run from the point at which it was suspended, so that the claimant has the benefit of the unexpired part of the limitation period;

(a) (b) in claims which are not related to personal injuries, a long-stop limitation period should run;

(b) (c) in personal injury cases, after a period of ten years from the accrual of the cause of action or, if later, from the onset of the lack of capacity, the primary limitation period should run but with the knowledge of the claimant's Representative Adult regarded as the knowledge of the claimant, except where the cause of action is against the Representative Adult. Where the claimant was a minor at the end of the ten year period, the primary limitation period shall not run by reference to the knowledge of the Representative Adult until the claimant's majority. (Paragraph 3.133, Draft Bill, Cl 29(3), (4) and (5)).

(22) 'Mental disability' for the purposes of this definition is defined as 'a disability or disorder of the mind or brain, whether permanent or temporary, which results in an impairment or disturbance of mental functioning'. (Paragraph 3.133, Draft Bill, Cl 29(7)).

(23) A person is a Representative Adult if he or she is the member of the claimant's family who is responsible for the day to day care of the claimant, or a person who is authorised under Part VII of the Mental Health Act 1983 to conduct proceedings in the name of the claimant. (Paragraph 3.133, Draft Bill, Cl 29(8)).

(24) Where:

(a) the defendant or any person through whom the defendant claims (or any of their agents) has concealed any of the relevant facts from the claimant or any person through whom he claims (or any of their agents) (whether before or after the cause of action has accrued) and

(b) the concealment was dishonest

the long-stop limitation period or any limitation period agreed between the parties should be suspended from the date on which the fact was concealed until the date on which it was discovered (or should have been discovered) by the claimant (or any person through whom he or she claims) (Paragraph 3.145, Draft Bill, Cl 26(1), (2), (4)).

(25) The defendant will be regarded as concealing a fact from the claimant

(a) if the defendant takes any action, or is a party to any action the effect of which is to prevent the claimant discovering that fact for some time, or

(b) if the defendant fails to disclose that fact to the claimant in breach of a duty to do so (Paragraph 3.145, Draft Bill, Cl 26(6)).

(1) The long-stop limitation period applying to a claim by the purchaser of defective property will be extended where the defendant has dishonestly concealed the relevant facts from the seller of that property. (Paragraph 3.145, Draft Bill, Cl 26(3)).

(27) The long-stop limitation period applying to a claim against a bona fide purchaser of property to recover that property (or its value) or to enforce a charge (or set aside a transaction) affecting it will not be extended by dishonest concealment if

(a) the purchase took place after the concealment and

(b) the purchaser was not party to the concealment and had no reason to suppose that it had taken place. (Paragraph 3.145, Draft Bill, Cl 26(5)).

(28) A written acknowledgment or a part payment, by the defendant (or someone previously liable to the claim), and irrespective of the nature of the claim, should restart the running of time for both the primary and long-stop limitation periods applying to the claim. This applies whether the acknowledgment or payment was made before or after the cause of action accrued (Paragraph 3.155, Draft Bill, Cl 27(1), (7), (8)).

(29) A written acknowledgment or a part payment should not be effective to revive a cause of action once the primary or long-stop limitation period has expired (Paragraph 3.155, Draft Bill, Cl 27(1)(c)).

(30) Subject to special rules applying to mortgages and for the possession of land (and in the case of trustees and personal representatives), only the acknowledgor, the person making the part payment or the principal of the agent giving the acknowledgment or making the part payment, and his or her successors, should be bound by the acknowledgment or part payment (Paragraph 3.155, Draft Bill, Cl 27(2), (4), (5), (9)).

(31) Similarly, where an acknowledgment or part payment is made to one or more of a number of joint (or joint and several) claimants (who are not trustees or personal representatives), only the person (or persons) to whom it is made may rely on it to extend the limitation period (Paragraph 3.155, Draft Bill, Cl 27(3), (4)).

(32) Where the purchaser of defective property has a cause of action under section 3 of the Latent Damage Act 1986, an acknowledgment made by the defendant to the previous owner of that property in relation to the original cause of action will also extend the limitation period apply to a claim brought by the purchaser against the defendant (Paragraph 3.155, Draft Bill, Cl 27(6)).

(33) As under the present law, the acknowledgment shall be valid only if made to the person, or to the agent of the person, whose title or claim is being acknowledged or in respect of whose claim the payment is being made. (Paragraph 3.155, Draft Bill, Cl 27(1), (9)).

A judicial discretion?

(34) In respect of a personal injury claim, the court may direct that the limitation period which would otherwise bar the claimant's claim shall be disapplied if, but only if, it is satisfied that it would be unjust not to give such a direction having regard to

(a) any hardship which would be caused to the defendant if the direction were given; and

(b) any hardship which would be caused to the claimant if the direction were not given (Paragraph 3.169, Draft Bill, Cl 12(1), (2)).

(35) The court shall take into account the following factors in the exercise of its discretion:

(a) the length of, and the reasons for, the delay on the part of the claimant;

(b) the effect of the passage of time on the ability of the defendant to defend the claim;

(c) the effect of the passage of time on the cogency of any evidence which might be called by the claimant or the defendant;

(d) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he or she responded to requests reasonably made by the claimant for information or inspection for the purpose of ascertaining facts which were or might be relevant to the claim;

(e) the extent to which the claimant acted promptly and reasonably once he or she knew that the facts gave rise to a claim;

(f) the steps, if any, taken by the claimant to obtain medical, legal or other expert advice and the nature of any such advice he or she may have received;

(g) any alternative remedy or compensation available to the claimant; and

(h) the strength of the claimant's case.

In addition the court should be empowered to consider any other relevant circumstances. (Paragraph 3.169, Draft Bill, Cl 12(3)).

Agreements to change the limitation period

(36) Subject to (37) and (38) below, nothing in the new Act shall prevent the making of an agreement which modifies or disapplies any of its provisions or makes alternative provision (Paragraph 3.175, Draft Bill, Cl 31(1)).

(37) Any clause in such an agreement which affects the limitation period will be valid only if it is shown by the party seeking to rely on it to be fair and reasonable within the meaning of section 11 of the Unfair Contract Terms Act 1977 (Paragraph 3.175, Draft Bill, Cl 31(3)).

(38) An agreement will be unenforceable to the extent that its terms modify or disapply, or make provision in place of the Act's provision in relation to disability, dishonest concealment or the ten year limitation period applying to claims under the Consumer Protection Act 1987. (Paragraph 3.175, Draft Bill, Cl 31(2)).

Application of the core regime

(39) The cause of action in relation to a claim for repayment of a 'qualifying loan' should not accrue until a written demand for repayment has been made. "Qualifying loan" for the purposes of this recommendation will have the same meaning as in section 6 of the Limitation Act 1980. (Paragraph 4.6, Draft Bill, Cl 32).

(40) Specialties should be subject to the core regime (Paragraph 4.9).

(41) Claims under the Law Reform (Miscellaneous Provisions) Act 1934 should be subject to the core regime, save that (as under the present law in relation to the survival of personal injury claims) the primary limitation period should start from the later of the date the cause of action was discoverable by the claimant (that is, the personal representative) or the date of death of the deceased. (Draft Bill, Cl 10). As regards the survival of personal injury claims, where, as we have seen, we recommend no long-stop limitation period and a judicial discretion to disapply the primary limitation period, the court in exercising that discretion shall take into account the deceased's delay as well as that of the personal representative. (Paragraph 4.15, Draft Bill, Cl 12(4), (8)(b)).

(42) Claims under the Fatal Accidents Act 1976 should be treated as analogous to personal injury claims under our core regime (so that proceedings in respect of such claims should not be subject to a long-stop limitation period and there should be a judicial discretion to disapply the primary limitation period) save that the date of knowledge should refer to the knowledge of the dependants for whom the claim is brought. (Paragraph 4.22, Draft Bill, Cl 11, Cl 12(5), (6)).

(43) Claims by child abuse victims should be subject to the core regime as modified in relation to other personal injury claims. (Paragraph 4.32).

(44) The core regime should apply to claims under the Consumer Protection Act 1987, subject to the following modifications:

(a) The starting date for the long-stop limitation period will be the date on which the defective product is supplied by the producer of the product, or by the person who imported the product into a Member State of the European Union. (Draft Bill, Cl 8(1), (2)).

(b) The long-stop limitation period will apply to all claims under the Consumer Protection Act 1987, including personal injury claims. (Draft Bill, Cl 8(2), (4)).

(c) The expiry of the long-stop limitation period will extinguish the claimant's right of action. (Draft Bill, Cl 8(3)).

(d) The court's discretion to disapply the limitation period in respect of personal injury claims will only apply to the primary limitation period. (Draft Bill, Cl 8(4)).

(e) The parties may agree to extend the primary limitation period applicable to a claim under the Consumer Protection Act 1987. Otherwise, the starting date of the initial and long-stop limitation period and the length of those periods so far as they apply to a claim under that Act may not be changed by agreement between the parties. (Paragraph 4.37, Draft Bill, Cl 31(2)).

(45) Claims for defamation and for malicious falsehood should be subject to the core regime. (Paragraph 4.46).

(46) All claims for conversion should be subject to the primary limitation period of the core regime. For claims which are related to theft, that period will not start to run until the claimant knows, or ought to know, not only the facts giving rise to the cause of action, but also the whereabouts of the stolen property. (Paragraph 4.67, Draft Bill, Cl 14(2), (5)).

(47) In respect of claims for conversion which are not thefts or related to a theft, the long-stop limitation period should run from the date of the first conversion only. (Paragraph 4.67, Draft Bill, Cl 14(1)).

(48) In respect of claims for conversion which constitute thefts or are subsequent to a theft, the long-stop limitation period should not commence until the date on which the goods are purchased by a person acting in good faith. It will run from that date in favour of the good faith purchaser and anyone claiming through him. (Paragraph 4.67, Draft Bill, Cl 14(3), (5)).

(49) The claimant's title to goods which have been converted shall be extinguished on the expiry of the long-stop limitation period. (Paragraph 4.67, Draft Bill, Cl 14(4)).

(50) A cause of action shall accrue to the subsequent owner of damaged property as provided for in section 3 of the Latent Damage Act 1986; that is where

(a) a cause of action has accrued to any person in respect of any negligence to which damage to any property is attributable (in whole or in part); and

(b) the subsequent owner acquires an interest in the property after the date on which that cause of action accrued, but before any person with an interest in the property has the knowledge relevant to the date of knowledge for a claim in respect of that cause of action.

The claim by the subsequent owner shall be subject to the core regime. (Paragraph 4.75, Draft Bill, Sch 3, para 23).

(51) The core regime should apply to restitutionary actions (Paragraph 4.79).

(52) The core regime should apply to claims for contribution under section 1 of the Civil Liability (Contribution) Act 1978, and that the provisions of the Limitation Act, section 10 (which define the date on which the cause of action for such claims accrues) should be retained to define the starting date for the long-stop limitation period (Paragraph 4.83, Draft Bill, Cl 13).

(53) The core regime should apply to claims for a contractual indemnity. This will mean that where there is a chain of indemnity claims, a new long-stop limitation period will arise in respect of each new claim in the chain. (Paragraph 4.93).

(54) Subject to our recommendations in paragraph 56 below all claims for breach of trust should be subject to the core regime (Paragraph 4.101).

(55) Claims to recover trust property should be subject to the core regime; but

in the case of a claim for the recovery of trust property held on a bare trust, the cause of action shall not accrue unless and until the trustee acts in breach of trust. (Paragraph 4.106, Draft Bill, Cl 22(2)).

(56) Legislation should provide that where a claim by one beneficiary has become time-barred, that beneficiary should not be permitted to benefit from a successful claim by another beneficiary whose claim is not time-barred (Draft Bill, Cl 22(4)).

Pursuant to the application of the core regime, there is no need to provide a trustee with protection equivalent to that which is currently found in Limitation Act 1980, section 21(2).

Neither the primary limitation period nor the long-stop limitation period should apply to claims for breach of trust or to recover trust property which are brought by either the Attorney General or the Charity Commissioners. (Paragraph 4.112, Draft Bill, Cl 22(3)).

(57) Neither the primary limitation period nor the long-stop limitation period in respect of a claim for breach of trust or to recover trust property by a beneficiary with a future or contingent interest will start until that interest has fallen into possession. (Paragraph 4.119, Draft Bill, Cl 22(1)).

(58) The core regime should apply to claims in respect of the personal estate of a deceased person (including any claims in respect of a claim to arrears of interest on legacies). (Paragraph 4.125).

(59) A long-stop limitation period of ten years commencing on the date that the claimant's right to recover the land accrued (or, if later, the date on which the claimant's interest becomes an interest in possession) should apply to, and (subject to the recommendation in paragraph 65 below) be the sole limitation period for claims to recover land^[1] (Paragraph 4.135, Draft Bill, Cl 16(1), (2)).

(60) A claimant entitled to a future interest to land which was in adverse possession before that interest fell into possession should be subject to a limitation period of ten years from the date on which his or her interest fell into possession rather than a reduced period (Paragraph 4.135).

(61) The expiry of the limitation period will extinguish the claimant's rights to the land in question, and after that period, no claim may be made. (Paragraph 4.135, Draft Bill, Cl 18(1)).

(62) The limitation period in relation to all claims to recover equitable interests in land should be the same as that which applies in relation to claims to recover legal interests in land. (Draft Bill, Cl 17(2), (3)). The further provisions presently contained in section 18(2) to 18(4) of the Limitation Act 1980 should be retained. (Paragraph 4.137, Draft Bill, Cl 18(2), (3), (4)).

(63) Claims brought by, or by a person claiming through, the Crown (subject to paragraph 65 below) or any spiritual or eleemosynary corporation sole to recover land should be subject to the same limitation period applying to a claim by any other party to recover land (Paragraph 4.144).

(64) In any case where the land is vested in the incumbent from time to time of a benefice as a spiritual corporation sole but the benefice is vacant a claim to recover the land or any part of it may be made by

(a) the priest-in-charge of the benefice, or

(b) by the sequestrators of the benefice. (Paragraph 4.144, Draft Bill, Cl 17(5)).

(65) The limitation period applicable to claims by the Crown to recover foreshore should be

(a) sixty years from the date of accrual of the right of action or

(b) ten years from the date when the land ceased to be foreshore

whichever period first expires. (Paragraph 4.147, Draft Bill, Cl 16(4), (7)).

(66) Where the identity of the person in adverse possession of the land changes, a new cause of action shall accrue to the claimant, unless anyone in adverse possession of the land before the change continues to be in adverse possession after that date. (Draft Bill, Sch 1, para 1(4), (5)(a))

However, no new cause of action will accrue to the claimant

(a) where the second person in adverse possession claims possession through his or her predecessor (Draft Bill, Sch 1, para 1(5)(b)) and

(b) where the squatter coming into possession is recovering possession of the land from a squatter who had previously dispossessed him or her (Paragraph 4.150, Draft Bill, Sch 1, para 1(6)).

(67) Claims to recover the proceeds of the sale of land should not be subject to the primary limitation period of three years from the date of knowledge but only to the long-stop limitation period of ten years running from the date when the vendor became entitled to recover the proceeds (by, for example, enforcing a lien over the land). (Paragraph 4.151, Draft Bill, Cl 19).

(68) The core regime should apply to claims to recover rent, claims to recover damages in respect of arrears of rent, and the levying of distress for unpaid rent. (Paragraph 4.157).

(69) The primary limitation period should not apply to claims to enforce a mortgage or charge over land; and

the long-stop limitation period should apply to claims to enforce a mortgage or charge over land, running from the date on which the mortgagee's or chargee's right to enforce the mortgage or charge accrues (Paragraph 4.166, Draft Bill, Cl 15(2)).

(70) Claims to enforce a mortgage or charge over personal property should be subject to the core regime (Paragraph 4.169).

(71) The primary limitation period should not apply to claims to enforce a mortgage or charge over both land and personal property; and

the long-stop limitation period should apply to claims to enforce a mortgage or charge over land and personal property, running from the date on which the mortgagee's or chargee's right to enforce the mortgage or charge, vis-à-vis the land, accrues (Paragraph 4.173, Draft Bill, Cl 15(2), (9)).

(72) Only the long-stop limitation period should apply to claims to enforce an obligation secured by a mortgage or charge by suing on the covenant to repay. (Paragraph 4.177, Draft Bill, Cl 15(2)(b)).

(73) Where a mortgage or charge comprises a future interest or a life insurance policy, the limitation period applying to claims to enforce the mortgage or charge should not begin to run until the future interest determines or the life insurance policy matures. (Paragraph 4.181, Draft Bill, Cl 15(4)).

(74) Where a prior mortgagee is in possession of the property which is subject to the mortgage, the limitation period applicable to a claim by the subsequent mortgagee to recover arrears of interest (or damages in lieu) should (if necessary) be extended so that it does not end before the date one year after the prior mortgagee ceases to be in possession. (Paragraph 4.184, Draft Bill, Cl 15(3)).

(75) The limitation period applying to foreclosure proceedings should be suspended during the period that the mortgagee is in possession of the mortgaged property. (Paragraph 4.185, Draft Bill, Cl 15(5)).

(76) No limitation period should apply to claims by the mortgagor to redeem a mortgage over land. (Paragraph 4.189, Draft Bill, Cl 15(1)).

(77) Claims to redeem mortgaged personal property should not be subject to a limitation period. (Paragraph 4.194, Draft Bill, Cl 15(1)).

(78) The expiry of the limitation period applying to claims to enforce a mortgage should extinguish the claimant's interest in the mortgaged property. (Paragraph 4.196, Draft Bill, Cl 15(6)).

(79) Claims on a judgment and claims on an arbitration award should be subject to the core regime. (Paragraph 4.200).

(80) Claims on a statute should be subject to the core regime. (Paragraph 4.202).

(81) No special protection should be given in limitations law to public authorities. (Paragraph 4.203).

(82) Derivative claims should be subject to the core regime, but the start of the primary limitation period should be decided by reference to the knowledge of the shareholder who is bringing the claim. (Paragraph 4.210, Draft Bill, Cl 24).

(83) Applications under section 459 of the Companies Act 1985 should be subject to the core regime. (Paragraph 4.218).

(84) Claims brought by a debtor who is subject to a voluntary arrangement should be subject to the core regime. (Paragraph 4.225).

(85) The primary limitation period should be suspended in respect of claims by a company or partnership during any period in which the company or partnership is in either administration or administrative receivership, except where the administrative receiver is the defendant to the company's claim. (Paragraph 4.234, Draft Bill, Sch 2, paras 1, 2).

(86) Claims against a company or partnership in administration should be subject to the core regime. (Paragraph 4.237).

(87) Claims against a company in administrative receivership should be subject to the core regime. (Paragraph 4.241).

(88) Claims brought by a liquidator on behalf of a company or partnership in liquidation should be subject to the core regime, subject to the modification that

(a) where the primary limitation period in respect of a claim has started running against the company or partnership before it went into insolvent liquidation but has not expired by that date, it should be suspended for one year from the date of liquidation;

(b) where the primary limitation period in respect of a claim has not started running before the date of liquidation, it should start on the later of

(i) the date of knowledge of the liquidator; or

(ii) the date one year after the date of the liquidation. (Paragraph 4.247, Draft Bill, Sch 2, para 3).

(89) Claims brought against a company or partnership during the course of the winding-up procedure should be subject to the core regime. (Paragraph 4.253).

(90) Claim brought against an individual during the course of bankruptcy procedures should be subject to the core regime. (Paragraph 4.258).

(91) Claims brought by a trustee on behalf of a bankrupt should be subject to the core regime, subject to the modification that:

(a) where the primary limitation period which would have applied to a claim brought by the bankrupt has expired before the date of the bankruptcy order, the defendant may rely on that defence against the trustee in bankruptcy (Draft Bill, Sch 2, para 6(2));

(b) where the primary limitation period in respect of a claim has started running against the bankrupt but has not expired by that date, it should be suspended for one year from the date of the bankruptcy order (Draft Bill, Sch 2, para 6(3));

(c) where the primary limitation period in respect of a claim has not started running before the date of bankruptcy, it should start on the later of

(i) the date of knowledge of the trustee; or

(ii) the date one year after the date of the bankruptcy order. (Paragraph 4.262, Draft Bill, Sch 2, para 6(4)).

(92) Applications under section 212 - 214, 238 - 239 and 423 of the Insolvency Act 1986 should be subject to the core regime, subject to the modification that:

(a) where the primary limitation period in respect of a claim under section 212 has started running against the company or partnership before it went into insolvent liquidation but has not expired by that date, it should be suspended for one year from the date of liquidation;

(b) where the primary limitation period in respect of any claim under these sections has not started running before the date on which the liquidator (or administrator) was appointed, it should start on the later of:

(i) the date of knowledge of the claimant; or

(ii) the date one year after the date of the liquidation (or, where a claim is brought by the administrator, one year after the date of his or her appointment). (Paragraph 4.264, Draft Bill, Sch 2, para 4).

(93) Applications under sections 339 - 343 and 423 of the Insolvency Act 1986 should be subject to the core regime, subject to the modification that the primary limitation period should start on the later of:

(a) the date of knowledge of the trustee; or

(b) the date one year after the date of the bankruptcy order. (Paragraph 4.267, Draft Bill, Sch 2, para 7).

(94) Where the core regime applies to common law remedies available for a claim in respect of a particular cause of action, it should also apply to equitable remedies available for that cause of action (Draft Bill, Cl 1);

but no limitation period should apply to applications for specific performance where under the present law (as exemplified by Williams v Greatrex) delay does not operate to bar such applications. (Paragraph 4.273, Draft Bill, Cl 34(1)).

(95) Nothing in the new Limitation Act should be taken to prejudice any equitable jurisdiction of the court to refuse an application for equitable relief (whether final or interlocutory) on the grounds of delay (or because of any other equitable defence such as acquiescence), even though the limitation period applicable to the claim in question has not expired. (Paragraph 4.278, Draft Bill, Cl 34(2)).

(96) The core regime should not apply where a limitation period has been prescribed in another enactment (Draft Bill, Cl 36), but that claims under:

(a) section 94 of the Rent Act 1977 (Draft Bill, Sch 3, paras 18, 19);

(b) section 3 of the Vaccine Damage Payments Act 1979 (Draft Bill, Sch 3, para 20);

(c) sections 113(1), 203(2) and 230 of the Copyright, Designs and Patents Act 1988 and section 18 of the Trade Marks Act 1994; (Draft Bill, Sch 3, paras 25 - 29),

(d) section 34 of the Land Compensation Act 1973 (Draft Bill, Sch 3, para 14) and, for the avoidance of doubt

(e) section 1 of the Defective Premises Act 1972 (Draft Bill, Cl 3(4) and Sch 3, para 11)

should be brought within the core regime. (Paragraph 4.287).

(97) Claims under section 83 of the Land Registration Act 1925, section 25 of the Law of Property Act 1969 and section 10 of the Local Land Charges Act 1975 should be subject to the primary limitation period running from the date of knowledge, but not the long-stop limitation period (Paragraph 4.288, Draft Bill, Cl 20; Sch 3, paras 3, 9, 16).

(98) A new Limitations Act should include a 'sweeping-up' or 'default' clause. This will provide that the standard limitation defences which we propose apply to all civil claims. For these purposes, a civil claim means a claim in civil proceedings in which the claimant seeks

(a) a remedy for a wrong,

(b) restitution, or

(c) the enforcement of a right (Draft Bill, Cl 1).

There should be an exception to this general rule where other provision is made in the Bill itself, or in any other enactment (Paragraph 4.293, Draft Bill, Cl 36).

(99) As under the present law, no limitation period should apply to proceedings by the Crown for the recovery of any tax or duty. (Paragraph 4.293, Draft Bill, Cl 35(2)).

Additional Issues

(100) No change is needed to the present position that the limitation period should stop running when proceedings are issued (or, if earlier, the date on which the claim form was received in the court office). (Paragraph 5.4).

(101) The addition of new claims made between parties to existing proceedings after the expiry of the limitation period relevant to the new claim should be permitted where

the new claim arises out of the conduct, transaction or events on which a claim in the existing proceedings is based; and

the existing proceedings were commenced within the relevant limitation period.

We also recommend that the Rules Committee amend Rule 17.4(2) of the Civil Procedure Rules, which currently repeats the wording of the test laid down in Limitation Act 1980, section 35. (Paragraph 5.11, Draft Bill, Cl 25(2)).

(102) There should be no reform in relation to the addition of new claims to existing proceedings where the new claim involves the addition or substitution of new parties. (Paragraph 5.19, Draft Bill, Cl 25(3), (4)).

(103) No change should be made to the present law on the effect of the expiry of a limitation period. (Paragraph 5.23).

(104) The primary limitation period and the long-stop limitation period will be suspended during any period after the accrual of the cause of action in which the claimant is prevented from making a claim by any enactment or other rule of law (Draft Bill, Cl 30(1));

the claimant will not be considered to be under a restriction if

(a) the claim could have been made by a litigation friend,

(b) the claimant is prevented from making the claim only because of the terms of a contract or

if leave is required to make the claim, unless and until the claimant has taken all reasonable steps to obtain that leave (Paragraph 5.28, Draft Bill, Cl 30(2)).

(105) The burden of proof in relation to the primary limitation period and the date of knowledge of any person should be on the claimant (Draft Bill, Cl 37(1));

the burden of proof in relation to any other defence under the Bill should be placed on the defendant. (Paragraph 5.32, Draft Bill, Cl 37(2)).

(106) The new Act should come into force one year after the day on which it is passed (Draft Bill, Cl 40(1)).

The proposed new Act should apply to causes of action accruing before it commences, except where the claim has been barred by the expiry of a limitation period under the provisions of a previous Act or proceedings have been instituted in respect of a claim before the commencement of the Act. (Draft Bill, Cl 40(2), (3)(a), (b)).

Any claim arising under a contract entered into under seal before the commencement of the new Act shall be subject to a limitation period of twelve years from the date of accrual of the cause of action. (Paragraph 5.40, Draft Bill, Cl 40(3)(c)).

(107) Where the cause of action accrued before commencement, and no limitation period applied to that claim under the previous law, the limitation period will expire on the later of

(a) the date six years from commencement or

(b) on the expiry of the limitation period applying under the new Act. (Draft Bill, Cl 40(4)).

In any other case, where the cause of action accrued before commencement, the limitation period will expire on the later of

(a) the date on which time would have expired under the previous law or

(b) the date on which time would expire under the new Act. (Paragraph 5.40, Draft Bill, Cl 40(5))

(108) In determining when the limitation period applicable under the previous law would have expired,

(a) no account shall be taken of the effect of deliberate concealment under section 32(1)(b) of the 1980 Act (Draft Bill, Cl 40(6)(a));

(b) section 32(1)(a) and (c) of the 1980 Act shall be considered to extend the limitation period for no more than six years from the date on which the Act comes into force (Paragraph 5.40 Draft Bill, Cl 40(6)(b)).

(Signed) ROBERT CARNWATH, Chairman
HUGH BEALE
CHARLES HARPUM
MARTIN PARTINGTON
ALAN WILKIE

MICHAEL SAYERS, Secretary
3 April 2001

Note 1    Subject to the exceptions presently set out in Limitation Act 1980, s 15(3) and (5).    [Back]