Q&As

The limitation period for a claim expires in one month. The parties have now reached an agreement on damages, without the issue of proceedings, but the related costs have not been agreed. What is the impact of the limitation period expiring on the recovery of costs?

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Published on LexisPSL on 26/09/2018

The following Dispute Resolution Q&A provides comprehensive and up to date legal information covering:

  • The limitation period for a claim expires in one month. The parties have now reached an agreement on damages, without the issue of proceedings, but the related costs have not been agreed. What is the impact of the limitation period expiring on the recovery of costs?

The limitation period for a claim expires in one month. The parties have now reached an agreement on damages, without the issue of proceedings, but the related costs have not been agreed. What is the impact of the limitation period expiring on the recovery of costs?

In this Q&A it has been assumed that the parties have reached an agreement on which party will be liable to pay costs (albeit that the amount of costs is not agreed) and that this, together with the agreement on damages, is recorded in a settlement agreement.

In such circumstances, the expiry of the limitation period for the underlying claim may no longer be relevant since any claim concerning the recovery of the costs can be made pursuant to the terms of the relevant settlement agreement. Much would turn on the specific wording used in the settlement agreement, but in the event that a party who had contractually agreed to be liable to pay costs subsequently refused to agree those costs and/or the costs remain unpaid, the other side to the agreement would likely have a claim for breach of contract. For further information, see Practice Note: Enforcing settlement agreements concluded pre-action and Remedies for breach of contract—overview.

In terms of the period within which such a claim could be pursued, the limitation period for simple contract claims is six years

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