Limitation of Actions Consultation - Law Commission

certainty, this approach may be thought objectionable in principle in that the
initial limitation period might run before the accrual of the cause of action and
hence before the plaintiff could sue. It may be thought preferable, therefore, to
confine use of the date of the act or omission to being the starting date for the
long-stop. However, consultees might favour this option on the basis that all one
needs is a single long-stop limitation period and that allowing plaintiffs even as
much as, say, 10 years from act or omission 24
is preferable to the uncertainty of a
discoverability test. But where the act or omission gives rise to a known cause of
action from the outset, allowing the plaintiff ten years to bring an action may be
thought to permit an unacceptably long delay by the plaintiff.
(e) Option five: date of accrual of the cause of action for contract claims;
date of discoverability for tort claims 25
12.18 The attraction of this option is that it would leave undisturbed the certain and
familiar present starting date for contract claims. 26
This would ensure that the
limitation period for contract claims consisted of a fixed period starting from a
fixed, and usually easily ascertainable, point in time. 27
Both plaintiff and defendant
would be certain, in most cases, of the time available to the plaintiff for bringing a
claim for breach of contract. On the expiry of this period, the defendant could be
sure that he or she could no longer be held liable for any breach of contract which
may have occurred. In consequence, there would be less chance of disputes on
limitation questions, and in turn less satellite litigation on issues subsidiary to the
main action. Moreover, in contrast to the discoverability test, the problematic
issue of fixing the knowledge of corporate plaintiffs is irrelevant to the accrual test,
and little oral or documentary evidence would be required to resolve the limitation
question. This approach would also reduce the chance that actions might proceed
to full trial only for the judge to hold that the plaintiff’s claim was time-barred,
after both parties had incurred substantial costs, and judicial resources had been
wasted. Defendants, once sure that their potential liability had ended, would be
able to destroy relevant records and reduce the amount of liability insurance held,
so enjoying cost savings. It can also be argued that, given the Latent Damage Act
1986 - and the acceptance in Henderson v Merrett Syndicates Ltd 28
of concurrent
24 On pre-consultation, representatives of the construction industry suggested that there
should be a single limitation period for construction liability claims of 10 years running
from the date of the completion of the works. See also Construction Industry Board,
Report from Working Group 10 on Liability Law (1995) paras 51 - 58.
25 See para 12.7, n 9, above.
26 See also para 12.12 above.
27 The advantages of certainty in respect of contract cases may be illustrated by the fact that
many International Conventions regulating claims in relation to, for example, the
international carriage of goods, have chosen a fixed, easily ascertainable, date as the starting
point for the limitation period. (The Convention on the Contract for the International
Carriage of Passengers and Luggage by Road 1974, and the International Convention on
Liability and Compensation of Damage in connection with the Carriage of Hazardous and
Noxious Substances by Sea are two exceptions to that rule, each relying on a date of
discoverability). Similarly, jurisdictions such as Germany, and many states in the United
States have adopted a fixed date as the starting point for the limitation period for actions for
breach of contract.
28 [1995] 2 AC 145.
255