Limitation of Actions Consultation - Law Commission

ingredients of the date of discoverability, including how to deal with corporate
knowledge; and secondly, by combining discoverability with a long-stop. We deal
with both these points in detail below. We provisionally believe that the goal of a
simple, fair and uniform limitation regime is one worth striving for even if, in the
short term, there are areas where the law is rendered less certain than at present.
12.22 We ask consultees which, if any, of the above five options they prefer, and
why. Before expressing their views we would urge consultees to consider
the definition of the date of discoverability (including corporate
knowledge) discussed at paragraphs 12.26 - 12.87 below. We would also ask
consultees to bear in mind paragraphs 14.1 - 14.6 below where we indicate
that, subject to the normal rules on the validity of contractual terms,
contracting parties should be able to provide their own “more certain”
regime should they so wish. We would be particularly keen to hear
consultees’ views as to whether option one should be rejected because of
the danger that, in contrast to the present law, it would lead to satellite
litigation and would increase legal costs. If consultees feel that none of the
options discussed above is appropriate, they are requested to set out their
preferred alternative.
12.23 We should add three points. First, even if one were to move to the date of
discoverability, it is discoverability of the cause of action that counts, so that the
different rules as to when a cause of action accrues would continue to have some
relevance to limitation of actions. This seems inevitable given that causes of action
are different and accrue at different dates. In particular, we cannot ignore the
difference between wrongs actionable per se and wrongs actionable only on proof
of damage. To concentrate only on damage or loss would, for example, involve
providing no limitation period for a claim for nominal damages for breach of
contract. In contrast, to focus on the date of knowledge of the act or omission
giving rise to the cause of action would mean that the date of knowledge might
occur at a time when the plaintiff had no right to sue. That is, the initial limitation
period might start to run before the plaintiff could sue, which would seem
anomalous in principle. In the vast majority of situations, albeit not all, where a
breach of contract causes the same damage as the tort of negligence, application of
our proposed uniform scheme would produce the same limitation periods. That
is, the discoverability date for the damage will coincide with the discoverability
date of the breach of contract. 34
And, as we shall see, the running of long-stops
would be identical as between contract and tort. 35
12.24 A second (rather technical) point is that we have seen 36
that, where a loan did not
provide for repayment by a particular date and where repayment was not
conditional on a demand, the common law rule was that the cause of action
accrued (and time therefore ran) from when the loan was made. Section 6 of the
1980 Act reverses this rule so that, where there is a demand in writing for
repayment of the debt, the cause of action is deemed to accrue on the date on
34 The emphasis under our proposals on the cause of action being significant - see below paras
12.33 - 12.44 - would also tend to produce assimilation in practice.
35 See paras 12.105 - 12.113 below.
36 See para 3.8 above.
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