Time's up: limitation challenges

There’s been no shortage of limitation cases emanating from the courts recently and so it may be timely (!) for a quick reminder of some of the areas where limitation has been challenged, in most cases, unsuccessfully – with the unsurprising overarching conclusion that the courts will not willingly grant indulgence when it comes to limitation – so don’t delay or your time’s up.

In the first of a series of three posts, we look at the case of Jacobs and what is knowledge for the purposes of the Limitation Act 1980. Look out for parts two and three on Bewry (libel limitation periods) and Arcadia (deliberate concealment) later this week.

What is ‘knowledge’ for the purposes of LA 1980, s 14A

Section 14A of the Limitation Act 1980 (LA 1980) applies where, at the time the claimant’s cause of action accrues, the claimant does not know certain specified facts about their claim.

It provides an alternative limitation period of three years calculated by reference to when the claimant has (or should reasonably have acquired) knowledge of the relevant facts required for bringing an action in damages in respect of the relevant damage.

When the claimant has (or should reasonably have acquired) knowledge of the relevant facts then the ‘starting date’ occurs and it is from this date that the alternative three year period prescribed by LA 1980, s 14A arises.

Bringing an action

The knowledge required for bringing an action for damages in respect of the relevant damage means knowledge of both:

• the material facts about the damage in respect of which damages are claimed, and
• other facts relevant to the action, which include:
  • that the damage was attributable in whole or part to the act or omission which it is alleged to constitute negligence, and
  • the identity of the defendant

Under LA 1980, s 14A(7), the ‘material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment’.

A person’s knowledge includes knowledge which he might reasonably have been expected to acquire:

• from facts observable or ascertainable by him, or
• from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek.

Jacobs v Sesame Limited

In Jacobs, applying the authorities (including the House of Lords in Haward and the Court of Appeal in both Halford and Gravgaard) the Court of Appeal concluded that an inexperienced investor had the ‘relevant knowledge’ to bring a claim against the financial service provider when she received annual statements indicating the drop in the value of her investment.

Had she considered this information on its receipt, as against the original investment literature with which she had been provided on taking out the investment , and spoken to the defendant on receiving her statements, then she would, at that point, have had the relevant knowledge required.

Having failed to check back against her original documents or make enquiries of the service provider, she could not invoke LA 1980, s 14A to rescue her claim from being debarred on the basis of limitation.

Lessons to be  learnt

This places quite a high burden on investors to raise with their service provider at the time their investments start to decline any concerns they may have as to the original investment advice, so as to uncover the relevant knowledge to bring a claim without falling foul of limitation.

Cases:

• Jacobs v Sesame Limited [2014] EWCA Civ 1410, [2014] All ER (D) 347 (Oct)
• Haward v Fawcetts [2006] UKHL 9, [2006] 3 All ER
• Halford v Brookes [1991] 3 All ER 559
• Gravgaard v Aldridge & Brownlee (a firm) [2004] EWCA Civ 1529, [2004] All ER (D) 134 (Dec)

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