Limitation of Actions Consultation - Law Commission

to obtain the relevant information - is more complex. Any test for such “structural
constructive knowledge” would require the court to assess the management
structures of the company concerned, and make a judgment on what structures a
“reasonable” company could be expected to have for gathering information. 115
In
practice, such an argument by defendants would be likely to be rare. Normally
defendants would be pointing to a particular individual or individuals within a
company who ought to have known rather than to the company’s defective
information-gathering structures. Moreover, we are unconvinced that the litigation
costs involved in a court assessing the management structures of a company are
justified, in the context of the issue of limitation (which, after all, is not the
substantive issue in the action). It seems preferable, therefore, not to try to
develop a test in this context of “structural” constructive knowledge.
12.87 It is therefore our provisional view that:
(1) there should be a general rule that a company has constructive
knowledge of any fact relevant to its cause of action of which one of
its employees or officers has constructive knowledge;
(2) but this rule should not apply where the company can show that the
employee or officer concerned would not, had he or she had actual
knowledge of that fact, be expected, in the course of his or her
employment or under a duty to the company, to act on the
information or to communicate that information to a superior or
anyone else within the company with the authority to act on the
information.
(3) No provision should be made for “structural constructive
knowledge”.
Do consultees agree? If consultees do not agree, would they prefer to have
no test for corporate constructive knowledge, so that the initial limitation
period would start for a corporate plaintiff only on the date the company
had actual knowledge of the facts relevant to the cause of action under the
test set out in paragraph 12.80 above?
2 HOW LONG SHOULD THE LIMITATION PERIOD BE?
12.88 An initial question is whether it is right to have a uniform period for all claims or
whether different periods can be justified for different classes of claim. In our view,
with possible minor exceptions (such as, possibly, the limitation period for
defamation actions which we discuss below), 116
the different periods which exist at
present cannot be defended and are products of the ad hoc development of the
law of limitations. 117
115 See the analogous test for corporate manslaughter contained in Clause 4 of the draft Bill on
Involuntary Homicide contained in Legislating the Criminal Code: Involuntary
Manslaughter (1996) Law Com No 237, at page 137.
116 See paras 13.38 - 13.43 below.
117 Discussed in detail at paras 1.6 - 1.21 above.
280