Posted by Jack Pestill, Senior Associate
Is your claim time-barred? Limitation periods during coronavirus
Limitation periods are critical in the context of a dispute. Simply put, if a party fails to commence proceedings before the end of the relevant limitation period, it is usually fatal to that party’s claim.
What are the relevant limitation periods?
Under English law, generally speaking, the relevant limitation periods are as follows:
- Simple claims in contract: 6 years. The time begins to run from the date of the breach of contract.
- Claims brought in respect of deeds: 12 years. The time begins to run from the breach of the obligation contained in the deed.
- Tort (excluding personal injury and latent damage): 6 years. The time begins to run from the date the damage is suffered.
- Personal injury: 3 years. The time begins to run from the later of the date the damage occurred or the date of knowledge of the person injured.
- Negligence (in respect of latent damage): 3 years or 6 years, subject to a maximum period 15 years from the negligent act or omission. The time begins to run from the later of six years from the date the damage occurred or three years from the date on which the claimant had the requisite knowledge and the right to bring such an action.
- Fraud: 6 years. The time begins to run from when the claimant discovered the fraud, or when he or she could, with reasonable diligence, have discovered it.
- Defamation: 1 year. The time begins to run from the date of publication of the defamatory act.
A claim is “brought” for limitation purposes when the court receives the claim form, and not the date on which the claim form is issued.
How does the pandemic change things?
In short, and from an English law perspective, it doesn’t! If a cause of action arises then the statutory time limits under English law apply regardless of the difficulties the virus and the lock-down measures may cause (such as evidence gathering).
Notwithstanding the pandemic, the English civil courts remain open for business. The courts are however making increasing use of remote hearings (which is not surprising) and new practice directions have been issued which deal with the procedure of video/audio hearings (see Practice Direction 51Y) and the extension of time limits (Practice Direction 51ZA). Importantly however, no changes have been made to English law limitation periods.
What about cases with cross-border elements?
Here we need to be careful. Cases which have a cross-border element may be governed by foreign substantive law, pursuant to the relevant choice of law rules. If a cause of action is governed by foreign law then this also includes the application of a foreign law limitation period. Further, and importantly, some jurisdictions around the world have recently made changes to limitation periods as a result of the pandemic (for example, New York, France, Spain, Italy, India and various parts of Canada and the US). Changes abroad could therefore impact the limitation period of your dispute, if your dispute has a cross-border element.
The take home message
Act swiftly wherever you believe you have a case. Get early advice. If your dispute has a cross-border element, it is important you get early advice in relation to limitation issues.
More generally, where possible limitation issues exist, it is essential you get advice in respect of:
- the possibility of an extension by agreement (often referred to as a “standstill agreement”), or
- protective court proceedings (proceedings issued before the relevant deadline in order to protect the position regarding limitation).
Protective proceedings may be preferable when there is a risk, such as in cross-border disputes which may apply foreign law, that the effectiveness of a standstill agreement might be called into question.
However, protective proceedings will themselves require great care, as if the claim is not properly set out in the first instance, then there may be issues in subsequently applying to the court to amend (particularly if new causes of action need to be introduced into the claim and/or the application to amend is made after the relevant limitation period has expired).
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