Limitation of Actions Consultation - Law Commission

payment made by instalments, time runs from the date when the last instalment
was due to be performed or paid, as the case may be. 20
10.12 In the case of any other type of obligation falling within Schedule 1 time runs from
the date when the obligation becomes enforceable. 21
Subject to the discoverability
rule for latent damage, 22
this date is deemed to be the date on which the loss,
injury or damage occurred. 23
So, for example, where an action is brought for
reparation for breach of contract in circumstances where the damage, though not
latent, occurs some time after the breach, the prescription period will begin when
the damage occurs, not on the date of the breach of contract. Where the default is
a continuing one, and the damage begins to occur before the default has ceased,
the obligation is deemed to be enforceable, and the prescription period begins,
when the default ceases. 24
10.13 Where there is latent damage a discoverability test is applied in relation to short
negative prescription. Section 11(3) of the 1973 Act applies to obligations to make
reparation for injury, 25
loss or damage caused by an act, neglect or default. It
provides that in such cases time does not run until the creditor knows or could
with reasonable diligence discover that such loss, injury, or damage has occurred. 26
The prescription period could therefore start to run before it could be known that
the damage suffered was significant. The Scottish Law Commission has
recommended that the statute be amended so that before the prescription period
can run the damage must be sufficiently serious to justify the bringing of an action
on the assumption that the defender does not dispute liability and is able to satisfy
a decree. 27
10.14 Some interesting contrasts with the provisions introduced in England by the
Latent Damage Act 1986 28
may be observed. First, section 11(3) applies to any
obligation to make reparation arising from negligence, whether tortious or
contractual. In that sense it is wider than the English provisions. The restriction to
negligent breaches of duty means, however, that it does not apply to any strict
duty. The result is that some contractual claims, but not all, will fall within the
section. Following the dictum of Lord McDonald in Dunfermline District Council v
Blyth & Blyth Associates 29
it would seem that in order to start time running the
pursuer must know, as well as knowing that it has occurred, that the injury, loss or
damage has occurred “in circumstances giving rise to an obligation upon someone
20 Ibid, Schedule 2, para 4.
21 Ibid, s 6(3).
22 See para 10.13 below.
23 Prescription and Limitation (Scotland) Act 1973, s 11(1). See, eg, Renfrew Golf Club v
Ravenstone Securities Ltd 1984 SC 22 (OH).
24 Ibid, s 11(2).
25 Not including personal injury: see paras 10.22 - 10.26 below.
26 See Reform of the Law Relating to Prescription and Limitation of Actions (1970) Scot Law
Com No 15, paras 97 - 98.
27 Report on Prescription and Limitation of Actions (Latent Damage and Other Related
Issues) (1989) Scot Law Com No 122, paras 2.17 - 2.25.
28 Limitation Act 1980, ss 14A and 14B: see paras 3.87 - 3.99 above.
29 1985 SLT 345 (OH).
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