Limitation of Actions Consultation - Law Commission

9.8 It seems that such an agreement will in certain circumstances be implied. It was
held in Lubovsky v Snelling 25
that an agreement between plaintiff and defendant
whereby liability in damages to the plaintiff’s cause of action was “once and for all
definitively accepted by the defendant and his insurers” prevented either the
defendant or the insurer from raising any defence which might contest that
liability, so that an agreement not to plead a limitation defence could be implied.
Some doubt was cast on this principle in The Sauria and the Trent. 26
Lord
Evershed MR noted that
As a matter of principle, I confess that whatever may have been the
facts in the Lubovsky case, I have the greatest difficulty in seeing how
you can formulate an agreement which will have the effect ... of
binding the defendants contractually not to raise the plea of section 8
of the [Maritime Conventions Act 1911] 27
in any action the plaintiffs
may choose to bring for finding that the damage suffered apparently
was done by the barge Trent, however long after the cause of action
they may elect to start those proceedings. 28
At the least, The Sauria and the Trent suggests that the circumstances in which the
court would be prepared to imply an agreement not to plead the statute from an
unconditional acceptance of liability by the defendants are far more limited than
was suggested in Lubovsky v Snelling.
9.9 An agreement between the parties that the defendant is liable has alternatively
been held to give rise to an estoppel preventing the defendant from relying on a
limitation defence. In Wright v Bagnall & Sons Ltd, 29
the plaintiff applied out of
time for compensation under the Workmen’s Compensation Act 1897 in respect of
an accident suffered in the course of his employment. Before the expiry of the
time limit the employer had started paying the plaintiff a weekly sum expressed to
be on account of his compensation under the Act, and the parties negotiated on
the payment of a lump sum to the plaintiff. The plaintiff’s application, made after
the negotiations were unsuccessful, was initially rejected as being time-barred. On
his appeal, the Court of Appeal held that there was evidence of an agreement that
compensation should be paid, leaving only the amount to be determined, so that
the defendants were debarred from raising a limitation defence. 30
It was suggested
25 [1944] KB 44.
26 [1957] 1 Lloyd’s Rep 396.
27 The Maritime Conventions Act 1911, s 8, has been replaced by the Merchant Shipping Act
1995, s 190. See paras 7.36 - 7.39 above.
28 [1957] 1 Lloyd’s Rep 396, 400. Lord Evershed’s approach was preferred in Asianic
International Panama SA and Transocean Transport Corporation v Transocean Ro-Ro
Corporation, The Seaspeed America [1990] 1 Lloyd’s Rep 150.
29 [1900] 2 QB 240.
30 Rendall v Hill’s Dry Docks and Engineering Co [1900] 2 QB 245, a case which also involved a
claim for compensation under the Workers Compensation Act 1897 made out of time, was
decided against the plaintiff on the facts. However, it seems to have been accepted that, had
the parties agreed that the employers were liable to pay compensation, the agreement would
have had the effect of waiving their right to raise a limitation defence.
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