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Published 29 October 2021
We provide a brief round-up of some recent limitation decisions and consider whether there is anything to be read from these tea leaves.
One partner of a three-partner firm had stolen substantial client funds in multiple thefts over a number of years, all of which took place more than six years before issuance of the proceedings brought by the former clients. The innocent partners succeeded in demonstrating that they were not, simply by reason of their partnership, ‘party or privy’ to the fraud. As such, the usual six-year limitation period applied to the claims against them.
The Defendant firm acted for the Claimant in personal injury proceedings which settled in 2009 on terms which made no provision for future deterioration. In 2016-2017 the Claimant’s condition did deteriorate, and he brought proceedings in 2019 alleging that the Defendant was negligent for not having advised him at the time of settlement (i) to obtain further expert evidence regarding the risk of deterioration, and (ii) as to the availability of provisional damages.
As a preliminary issue, the Claimant succeeded in relying on s.14A of the Limitation Act. Although the Defendant had advised the Claimant in 2009 that there was a risk of under-settlement, it was held that the Claimant did not have the relevant knowledge of his solicitors’ alleged negligence until he learned in 2017 of the extent of his deterioration and then took legal advice, so the claim was issued within the secondary 3-year period.
A barrister provided similar, allegedly negligent advice on two occasions. Proceedings were issued against the barrister more than 6 years after the earlier advice, but less than 6 years after the latter. It was held that a separate cause of action accrues each time a professional provides the same or similar advice, and “there is no general principle of logic or common sense which requires any sort of ‘relation back’, such as to say that the limitation period was triggered by the first occasion on which the negligent advice was given, regardless of any subsequent breaches of duty”.
Those who thought professional indemnity claims were over should think again. Canada Square Operations Ltd (CSO) arranged professional indemnity insurance for Ms Potter in 2006 with a high, undisclosed, commission. Ms Potter’s initial complaints to CSO resulted in partial repayment of the premium, and she brought proceedings against CSO in December 2018 for the balance.
The Court of Appeal found that Ms Potter could circumvent the primary limitation period by relying on the deliberate concealment provisions of s.32 of the Limitation Act. For concealment to be deliberate for the purposes of the Act, the correct test was recklessness with both a subjective and objective element. For concealment under s.32(1)(b), there did not have to be a free-standing contractual, tortious or fiduciary duty to disclose – here the duty arose “from a combination of utility and morality”.
The profession and its insurers should welcome the Baines decision which avoids the prospect of such claims hanging indefinitely over innocent practitioners.
All the other decisions, however, went the Claimants’ way.
In Witcomb, it might be thought that the court showed considerable indulgence to the Claimant in this preliminary issue decision, though it remains to be seen whether the claim will succeed on the merits.
The decision in Sciortino may also seem harsh from a Defendant’s perspective, though it will still be necessary to examine causation and loss in such cases - where a Claimant is “irretrievably committed” to a course of action following initial advice, it may be that the second negligent advice will not have caused any further loss in any event.
Of most interest may, however, be the Canada Square case. The finding that a duty of disclosure can arise “from a combination of utility and morality” gives the judiciary considerable leeway to open the door to claims which would otherwise be statute-barred. Following this decision, we would not be surprised to see Claimants go on to argue deliberate concealment in a number of areas unrelated to professional indemnity.
All of this will make for broadly unwelcome reading for Defendants, with some areas ripe for further judicial guidance in due course.
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