Limitation of Actions Consultation - Law Commission

the court from allowing the action to proceed with the new plaintiff, although the
limitation period had expired. 90
9.33 Section 35 has the potential effect of allowing a counterclaim to be used as a
means to pursue claims which would otherwise have been statute-barred. But this
is subject to the court’s discretion to decide that a claim should be disposed of as a
separate action rather than as a counterclaim. 91
That discretion will generally be
exercised on the basis of the procedurally most convenient way of trying the case. 92
In Ernst & Young v Butte Mining plc (No 2) 93
Lightman J said that he could
conceive of circumstances in which the court might exercise its discretion to allow
a counterclaim to proceed in order to avoid the subject matter becoming statute
barred. 94
But where a counterclaim was not justified by procedural convenience
the circumstances would have to be special. 95
9 COMMENCEMENT AND RETROSPECTIVITY
9.34 We intend to make absolutely clear when our proposed Act will commence. But in
deciding what is appropriate as the commencement date, it is important to realise
that the commencement date, and in particular, provisions giving retrospective
effect to limitation enactments have given rise to some difficulties in the past. The
general rule of interpretation is that, unless a contrary intention appears, a statute
is presumed not to be intended to have a retrospective operation. 96
This is
particularly the case where giving an enactment a retrospective interpretation
would mean that it “takes away or impairs a vested right acquired under existing
laws, or creates a new obligation, or imposes a new duty, or attaches a new
(1) Where a party to an action dies or becomes bankrupt but the cause of action
survives, the action shall not abate by reason of the death or bankruptcy; (2)
Where at any stage of the proceedings in any cause or matter the interest or
liability of any party is assigned or transmitted to or devolves upon some other
person, the court may, if it thinks it necessary in order to ensure that all
matters in dispute in the cause or matter may be effectually and completely
determined and adjudicated upon, order that other person to be made a party
to the cause or matter and the proceedings to be carried on as if he had been
substituted for the first mentioned party.
90 See also Industrie Chimiche Italia Centrale v Alexander Tsaviliris & Sons Maritime Co, The
Choko Star [1996] 1 WLR 774, where the original plaintiff, an Italian company, had merged
with another company by way of universal succession, having the effect in Italian law of
vesting all the assets and liabilities of the plaintiff in the new company. In that case counsel
for the plaintiff did not pursue the argument that there was no new claim. Mance J held that
RSC O 15, r 7 applied and that the requirements of s 35 were therefore satisfied. Cf Toprak
Enerji Sanayi A/S v Sale Tilney Technology PLC [1994] 1 WLR 840 (Judge Diamond QC).
91 RSC, O 15, r 5(2).
92 See, eg, Manchester, Sheffield and Lincolnshire Railway Co v Brooks (1877) 2 Ex D 243.
93 [1997] 2 All ER 471.
94 Ibid, 482.
95 Lightman J gave as a possible example the situation where the defendant made a
counterclaim during the limitation period which would be applicable if the defendant had
commenced its action by writ, but the court subsequently decided under O 15, r 5(2) that
the action should be brought separately, by which time the limitation period for
commencing the action by writ had expired: ibid, 482.
96 Francis Bennion, Statutory Interpretation (2nd ed 1992), section 97.
175