Limitation—latent damage

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Limitation—latent damage
  • Background
  • General
  • The relevant knowledge
  • Degree of knowledge required
  • Constructive knowledge
  • The long-stop
  • Successive ownership and latent damage

Limitation—latent damage

Background

The limitation period for an action founded on tort is six years from the date on which the cause of action accrued pursuant to section 2 of the Limitation Act 1980 (LA 1980). For claims in negligence, the cause of action accrues when damage first occurs rather than the date (if later) on which it is discovered by the claimant. For further information, see Practice Notes:

  1. Limitation—tort claims

  2. Limitation Act 1980—general application

Such principles have the potential to cause injustice in certain cases (for example, in Pirelli v Oscar) where, through no fault of the claimant, the limitation period expired before the damage had become apparent. This problem was most ubiquitous and acute in building cases. To meet the problem, the Latent Damage Act 1986 (LDA 1986) was enacted and, significantly, LA 1980, ss 14A and 14B were added. LA 1980, s 14A provides an alternative limitation period calculated by reference to when the claimant has (or should reasonably have acquired) knowledge of the relevant facts. LA 1980, s 14B provides a long-stop date for negligence actions not involving person injury.

However, two subsequent decisions of the House of Lords (D&F Estates Ltd v Church Commisioners for England and Murphy v Brentwood District Council) effectively confined the recoverability of pure economic loss in negligence to cases of negligent misstatement (within the liability established by Hedley

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