Limitation of Actions Consultation - Law Commission

to benefit from a longer limitation period simply because information given to its
junior employees has not been passed on within the company.
12.78 A far clearer guide would result from a rule that any information within the actual
knowledge of an employee of the company 110
should be considered to be within the
actual knowledge of that company. 111
However, it may be unreasonable to say that
what any employee knows, however junior, the company knows. Information
relating to the company’s cause of action may come only to an employee who
would not, in the ordinary course of their employment, think of passing the
information on to anyone else within the company, and who would not be
expected by their superiors to do so. So, for example, if a cleaner at a company
learnt that the company had a potential cause of action, it would be unlikely that
that information could be attributed to the company, as, generally, cleaners are not
expected, as part of their work, to pass information on to other employees of a
company unless it relates to cleaning.
12.79 A balance may be achieved by providing as a general rule that information which is
received by an employee or an officer of the company is within the knowledge of
the company. But this general rule would not apply if the company could satisfy
two conditions: first, by proving that the individual in question did not in fact
communicate the information to anyone else within the company and, second, by
showing that the individual would not be expected, in the course of his or her
employment, or under a duty to the company, to communicate that information to
a superior or anyone else within the company with the authority to act on the
information. The relevant expectations would be the actual expectations held
within the company. 112
Discounting “knowledge” where the two conditions are
satisfied provides some protection for the company where it is no part of that
individual’s normal duties to pass information on. We appreciate that there is an
element of uncertainty inherent in whether an employee would not “be expected”
to communicate information to other people in a company. The answer will
depend on the nature of the employee’s job or function in the company. 113
110 In the following discussion the term “employee” should be understood to include officers of
a company. The test would otherwise be too limited, as it would exclude the knowledge of
officers of the company who do not have a contract of employment with the company (such
as non-executive directors) from the knowledge of the company.
111 We do not think that the knowledge of employees or senior management of another, albeit
associated company, should be imputed to the original company. Companies also have
agents who are not their servants. Under the general law of agency, their knowledge will
only be imputed to the company when they are within their authority to receive the
information. If our proposed corporate knowledge regime is implemented, there will thus
be a contrast between the position of such agents and agents who are also employees.
However, their relationship to the company is no different to their relationship to a human
plaintiff. Furthermore, to say that the knowledge of all such agents is prima facie to be
attributed to the company would be to stretch the net too wide. The purpose of setting up a
special attribution rule for a company’s employees is to circumvent the problem of the
company’s lack of real personality.
112 We would wish to avoid requiring a court to judge what are the functions of comparable
employees in companies in general.
113 The following examples may be helpful in clarifying what we have in mind. (a) A railway
engineer learns in the course of tests carried out on a new bridge that the wrong materials
have been used in its construction, and in consequence it is not capable of supporting the
required weight. He would be expected, as part of his job, to pass that information on
277