Limitation of Actions Consultation - Law Commission

provision for vicarious liability. The running of time should not be delayed simply
because the plaintiff cannot identify the particular employee responsible where the
action is being brought against the employer on the basis of vicarious liability.
(iii) Knowledge that the cause of action is significant
12.33 Much more problematic is the third main element of the basic definition: the
‘significance’ test. Under the present law, an injury is significant if the plaintiff
would reasonably have considered it sufficiently serious to justify his instituting
proceedings against a defendant who did not dispute liability and was able to
satisfy a judgment. 48
As clarified in McCafferty v Metropolitan Police Receiver, 49
the
test is partly subjective and partly objective: would this plaintiff, with this plaintiff’s
intelligence, have been reasonable in considering the injury not sufficiently serious
to justify instituting proceedings?
12.34 The test is designed to ensure that the defendant's lack of resources and denial of
liability do not delay the start of the limitation period. At the same time, it is
intended to prevent an apparently trivial injury triggering the limitation period. In
the Law Reform Committee's Report on Latent Damage, which recommended
that the definition of knowledge for personal injury cases should be applied to
other cases of latent damage, it was noted that:
Latent damage is by definition hard to detect and may in many cases be
heralded by defects that at first appear to be minor and isolated. It may
not be until much later that the full significance of these early defects
becomes apparent and it might be harsh if an extended period of limitation
based on discovery or discoverability started to run against the plaintiff
from the moment that the first apparently trivial damage appeared. 50
12.35 The present test of significance has been criticised. 51
The assumptions relied on -
that the defendant does not dispute liability and is able to satisfy a judgment - are
unrealistic. On those assumptions, the significance threshold is very low. That is,
very few injuries will be insignificant so that the definition works to the
disadvantage of plaintiffs. 52
For example in Horbury v Hall & Rutley 53
it was held
48 Section 14(2) of the 1980 Act, relating to personal injury. See paras 3.40 - 3.44 above. Cf
s 14A(7) (latent damage). “Significance” for personal injury is tested by reference to
whether the plaintiff would reasonably have considered it significant (that is the test
combines both subjective and objective elements). For other latent damage “significance”
is tested by reference to whether a reasonable person would have considered it “significant”
(so that the test appears to be wholly objective). See further para 3.94 above.
49 [1977] 1 WLR 1073, 1081.
50 Twenty-Fourth Report (Latent Damage) (1984) Cmnd 9390, para 4.7.
51 See PJ Davies, "Limitations of the Law of Limitation" (1982) 98 LQR 249; M A Jones,
“Latent Damage: Squaring the Circle?” (1985) 48 MLR 564; N J Mullany, "Reform of the
Law of Latent Damage" (1991) 54 MLR 349, 350 - 353 and Ormrod LJ in Chappell v
Cooper [1980] 1 WLR 958, 967.
52 It has been suggested that “it is almost every cough or sprain that will be sufficiently serious
to justify an action”: P J Davies, “Limitations of the Law of Limitation” (1982) 98 LQR
249, 257.
53 [1991] CIIL 692. See also Hamlin v Edwin Evans, [1996] 2 EGLR 106; paras 3.96 - 3.98
above.
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