Limitation of Actions Consultation - Law Commission

influence, would themselves move to a reasonable discoverability test by treating
that as the date of the accrual of the cause of action. In Sparham-Souter v Town
and Country Developments (Essex) Ltd 6
the Court of Appeal held that the plaintiff’s
cause of action in negligence, in respect of the negligent approval by the council of
building work on their houses, did not accrue until the damage manifested itself,
so as to be reasonably discoverable by the plaintiffs. However, this approach was
rejected by the House of Lords in Pirelli General Cable Works Ltd v Oscar Faber &
Partners 7
(also a case of latent damage to a building), which held that the date
damage became discoverable by the plaintiff was irrelevant. The cause of action
accrued when damage was done to the building. 8
The Latent Damage Act 1986
has resolved the injustice revealed by this decision.
12.7 In considering what should be the appropriate starting date for limitation periods
under a core regime, we think that there are five main options for reform: Option
one: date of discoverability; Option two: date of discoverability or accrual of the
cause of action; Option three: date of accrual of the cause of action; Option four:
date of the act or omission giving rise to the cause of action; Option five: date of
accrual of the cause of action for contract claims, date of discoverability for tort
claims. 9
We look at each of these five options in turn.
12.8 Before doing so, we should emphasise two points. First, we do not favour an
approach, 10
whereby it is left to the discretion of the court whether the limitation
period running from the date of accrual of the cause of action should be
overridden if the cause of action was not reasonably discoverable by the plaintiff.
In our view, to rely on judicial discretion needlessly risks inconsistency and
uncertainty on a fundamental policy issue which can be, and should be, decided
once and for all. Secondly, we think that it is preferable, in avoiding confusion, to
distinguish between the accrual of the cause of action and the discoverability of the
cause of action, rather than adopting the solution put forward in Sparham-Souter v
Town and Country Developments (Essex) Ltd 11
according to which the cause of
6 [1976] QB 858.
7 [1983] 2 AC 1.
8 Pirelli General Cable Works Ltd v Oscar Faber & Partners has not been accepted in other
common law jurisdictions, as the decision of Invercargill City Council v Hamlin [1996] 1 AC
624 demonstrates. The Privy Council, hearing an appeal from the New Zealand Court of
Appeal on a latent damage claim, accepted that Pirelli did not represent New Zealand law
on limitations, and held that (under New Zealand law) in cases of latent defects, the
damage suffered by the plaintiff was economic loss, and in consequence that the cause of
action could only be said to accrue when the damage was discoverable by the plaintiff (See
further paras 3.15 - 3.16, 3.19, and 10.74 - 10.75 above).
9 We consider the range of the core regime, beyond contract and tort, in Part XIII and there
provisionally recommend that discoverability should apply to many other claims in addition
to tort.
10 To some extent adopted in the Defamation Act 1996.
11 [1976] QB 858. This was also the approach taken for New Zealand in Invercargill City
Council v Hamlin [1996] 1 AC 624 (see para 10.74 above), and is also adopted in Canada
(see para 10.96). The courts in a number of US jurisdictions have also held that the cause
of action only accrues when it is discoverable by the plaintiff, an approach which has in
some cases been overturned by legislation. See paras 10.107 - 10.112.
251