Limitation of Actions Consultation - Law Commission

offered by the limitations system. Where the defendant admits liability, the courts
have been prepared to find that the defendant is contractually bound not to raise,
or estopped from raising, a limitation defence even where the issue of quantum
remains unresolved. 257
If this is the case, the importance of the distinction between
liquidated and unliquidated claims is considerably diminished, and there appears
to be no reason in principle why acknowledgements should not be effective in the
case of unliquidated claims.
12.167 It may well be more difficult for the courts to decide whether an acknowledgement
or part payment by the defendant amounts to an admission of liability in an
unliquidated claim, but in practice we do not believe that these difficulties are
likely to prove insuperable. In any event, they would be minimised if the current
requirements, that the acknowledgement must be in writing and signed by the
person making the acknowledgement, are retained. 258
We provisionally
recommend that acknowledgements and part payments should start time
running again for all claims, whether liquidated or unliquidated.
Consultees are asked whether they agree and, if not, to say why not.
(b) Should an acknowledgement or part payment bind anyone other than
the person making the acknowledgement or payment?
12.168 For liquidated claims, the current rule is that, where there are a number of people
liable in respect of the same claim, an acknowledgement made by one of them will
bind only the acknowledgor, so that the other debtors may continue to benefit
from the running of the limitation period. 259
However, where one of those liable
makes a part payment in respect of the debt, all those liable are bound by that
payment, and in consequence subject to a new limitation period, running from the
time of the part payment. 260
This distinction was introduced by the Limitation Act
1939, on the recommendation of the Law Reform Committee which felt that, as
all the co-debtors would receive the benefit of the part payment, it was right that
they should also suffer the burden. 261
12.169 The distinction introduced further complexity into this area of law, departing from
the uniform treatment previously accorded to acknowledgements and part
payments. The justification given for the change is questionable. It may be
reasonable for the co-debtors to suffer the burden which follows a part payment,
particularly where the payment made substantially reduces the amount owed by
the co-debtors. However, where one debtor makes a nominal payment to the
creditor, without the consent of the co-debtors, the benefit gained by the codebtors
would not seem to justify fixing them with the burden of being subject to
an extended limitation period running from the date of the new payment. It also
leaves open the possibility that a creditor may attempt to avoid the effect of the
257 Lubovsky v Snelling [1944] KB 44; Wright v Bagnall & Sons Limited [1900] 2 QB 240; See
paras 9.7 - 9.9 above.
258 We discuss this question in paras 12.183 - 12.184 below.
259 Section 31(6). See paras 8.44 - 8.48 above.
260 Section 31(7).
261 See Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (1936) Cmd
5334, para 21.
311