If you think that you may have a claim against a professional such as an accountant, barrister or solicitor time may be of the essence - don’t be caught out by limitation.
Claims against professionals are generally brought by claimants in breach of contract or in the tort of negligence. Such claims will be barred after the expiration of six years from the date on which the cause of action accrues. But what does this mean? When does a “cause of action” accrue? Further, are there any ways to extend limitation if the six-year period has passed?
Claims in contract
In claims based on breach of contract the cause of action accrues when the breach has occurred. However, pinning down this date can be difficult. For example, where a professional omits to do something, when can it be said that the breach itself actually occurs? A useful illustration is the case of an accountant who has failed to draft accounts correctly. The accountant obviously made the mistake when the accounts were being prepared. Yet that mistake could have been remedied up until the point the accounts were signed off and submitted to HMRC. Breach would therefore arguably occur when the mistake could not be remedied and the clock in relation to any claim in contract would start ticking at that point.
Claims in the tort of negligence
In claims based on the tort of negligence the cause of action accrues when the claimant suffers actionable damage - this can be very much a question of fact. For instance, this damage could be as a result of a claimant buying a residential property which is worth less than it had expected e.g. if a solicitor has forgotten to advise that a right of way runs through a garden and that right of way has reduced the value of the property. In that example, generally the date of loss would be at the point contracts were exchanged for the property. At that date the claimant would be contractually bound to proceed with the purchase and would be seen to have suffered loss.
Section 14A of the Limitation Act 1980 (the “Act”)
However, it is not uncommon for claimants to be unaware of any breach which has caused them loss for many years after the event. What then?
Section 14A of the Act can provide such claimants with a lifeline. Section 14A is a complex provision which has been subject to extensive judicial interpretation. However, in claims based on tort generally a claimant will be provided with three years to bring a claim from the date of knowledge of loss or when they ought to have known about the problem in question. This should not be confused with the point when the claimant knows that the professional has been negligent - all that is really required by the claimant is sufficient knowledge to set it off in making further enquiries. This can be very little indeed.
It must also be remembered that there is a long stop date of 15 years after which a claimant cannot bring a claim even if knowledge of damage suffered has only just occurred.
Summary
If you think you may have a claim against a professional do not delay. Limitation is an area where the Courts do not display leniency to a claimant and failure to bring a claim in time will be fatal. If you think that limitation may be an issue it is sensible to seek legal advice as soon as possible to ensure that your position is protected. For further information, please contact Sam Taylor.