Christopher Tromans reviews some recent developments in the law of limitation


Section 33 of the Limitation Act 1980 permits the court to disapply the primary limitation period in a personal injury action if it is, in all the circumstances, equitable to do so. Those circumstances include prejudice to both parties and the six factors set out in sub-section 3. What, however, is the position if an action is commenced within the primary limitation period but not pursued and where a section 33 application is made in a second action on the same facts and issued outside the primary limitation period?



That question came before the House of Lords in Walkley v Precision Forgings Ltd [1979] 1 WLR 606. The facts were that no steps were taken after appearance because Mr Walkley was advised that his claim would not be successful. Subsequently, seven years after the date of knowledge, a second writ was issued following a favourable engineer's report.



The relevant statutory provision at the time was section 2D of the Limitation Act 1939, now re-enacted as section 33. Their Lordships held that because the first action had been commenced within the primary limitation period, it could not be said that the expiry of that period in itself was the source of any prejudice to Mr Walkley so that the equitable jurisdiction could be exercised. Any prejudice arose from his failure to pursue the first action.



There, until recently, the matter rested. Nevertheless, the Court of Appeal had expressed reservations about the reasoning behind the principle on several occasions and those concerns were shared by the Law Commission. No new legislation was forthcoming but in Horton v Sadler & Another [2006] UKHL 27, [2006] 3 All ER 1177, the Lords re-visited the issue and came to a different conclusion.



The facts were that Mr Sadler was responsible for injuries sustained by Mr Horton in a road traffic accident but he was uninsured. Proceedings were issued just before the expiry of the primary limitation period but the solicitors failed to give the required notice to the Motor Insurers Bureau. Duplicate proceedings were then issued, in which due notice was given to the bureau. The defence pleaded limitation and a section 33 application followed.



The judge at first instance dismissed that application on the basis that he was bound by Walkley. Their Lordships, however, questioned the validity of the reasoning in Walkley. The prejudice arising from section 11 arose in the second action, in which the section 33 application was being made, and accordingly the court could consider whether it would be equitable to allow the second action to proceed. While, on the facts, there was no basis on which Mr Walkley could have succeeded under section 33, the court generally retained a broad equitable jurisdiction which should not be subject to narrow restrictions. This was, in consequence, one of those rare cases in which it would be right for the House to depart from its earlier decision.



Other provisions of the 1980 Act which can be difficult to apply in practice are those governing the date of commencement of the primary limitation period. Section 11(4) provides that time runs from the date when the cause of action accrues or, if later, from the claimant's date of knowledge. Sections 14, 14A and 14B define the date of knowledge in language which has proved to be complex in interpretation and application. There have been many judicial attempts to paraphrase these provisions. In essence, time will begin to run from the point where an injured party knows both the basic facts about the damage sustained and that there are reasonable grounds for beginning to investigate whether the damage can be attributed to an act or omission on the part of the potential defendant.



In Haward & Ors v Fawcetts [2006] UKHL 9, [2006] 3 All ER 497, their Lordships considered for the first time the application of section 14A, introduced by the Latent Damage Act 1986, in relation to a claim for negligence. The facts were that Fawcetts was Mr Haward's accountants. The firm advised him in 1994 on the acquisition both of a controlling interest in a company and business premises. Part of the advice given was that to render the operation profitable, an investment of £260,000 would be required. This advice was accepted and implemented but the company failed to achieve profitability, and further investments, totalling over £800,000, were required over a four-year period.



A professional negligence claim was commenced in 2001 and a preliminary issue concerned the date of knowledge of the facts constituting the essence of the claim for negligence. Mr Haward's case was that he did not have that knowledge until he received different financial advice in 1999. After a comprehensive review of the authorities, their Lordships held that, on the facts, the damage had arisen from the making of the initial investments on the advice of Fawcetts in 1994 and 1995. Mr Haward had known of the losses from an early stage and the required degree of knowledge had existed from that point. In the words of Lord Nicholls of Birkenhead at paragraph 24, the disparity between the advice given and the losses sustained 'stared Mr Haward in the face long before December 1998'.



Further examination of a date of knowledge issue, this time in the context of a personal injury claim, can be found in the judgment of Lord Justice Neuberger (as he then was) in McCoubrey v Ministry of Defence [2007] EWCA Civ 17 [2007] All ER(D) 185 (Jan). The claimant was a career soldier. In 1993 he sustained an injury to his left ear as a result of an explosion during a training exercise. He was examined by an ear, nose and throat (ENT) consultant, who diagnosed sensorineural hearing loss. At that time, the claimant's service career was unaffected by the injury, but in 2001 another ENT surgeon recommended that the claimant be downgraded. As a result, the claimant was not permitted to travel in helicopters or fire a rifle, and in 2003 the claimant was told that he was likely to be permanently excluded from active service.



At this point the claimant consulted solicitors. Limitation was tried as a preliminary issue and, when the case reached the Court of Appeal, the main point was whether the test of knowledge of seriousness under section 14(2) is subjective or objective. The answer is that it is objective, being the knowledge of a reasonable person with the claimant's knowledge of the injury.



The defendant's appeal was allowed but the case was remitted to the judge below for consideration of a section 33 application.



District Judge Tromans sits at Plymouth Combined Court Centre