An earlier post outlined the potential causes of action that leaseholders may have against developers in contract, in tort (negligence) and under the Defective Premises Act 1972 (DPA). This post explains the time within which claims in contract and tort have to be issued (‘limitation periods’). The next post looks more specifically at the DPA and new claims under the Building Safety Act 2022 (BSA), both of which may provide more practical options than contract and tort claims. Both posts provide an outline and are not a substitute for legal advice. Separate posts here, and here, set out some of the key steps and challenges involved in pursuing claims.
To claim in contract it is necessary to show a breach, which will require the contract to contain warranties. The contract wording is central because there are no statutory warranties implied into a contract between a developer and leasehold purchaser that the flat will be fit for habitation or built in accordance with building regulations. Indeed, as the pleadings in Naylor v Roamquest illustrate, it will often only be off-plan purchasers who have strong contract claims. The doctrine of privity prevents subsequent purchasers suing on the original purchaser’s contract. But in Naylor there is a further sub-division between the original purchasers: those who had bought off-plan could point to express contractual terms that included a warranty; those who bought ‘as seen’ had to argue that there were implied terms under the Supply of Goods and Services Act 1982. Whether that argument would have provided them with a contractual remedy for defective construction is unclear as the case has settled on confidential terms.
In tort, as discussed below, it is practically impossible to bring a claim based in negligence.
What is a limitation period?
A claimant does not have an indefinite period within which to bring a claim against a defendant. The reasons for limitation periods are policy based as a defendant should not have the threat of being sued hanging over them forever, and claimants should have an incentive to bring claims as soon as possible, particularly as evidence will often become less reliable and more difficult to secure as time passes. The need for procedural rules preventing stale claims, the erosion of evidence, and promoting the goals of legal certainty and finality is recognised by the European Court of Human Rights. It also notes, however, that limitation periods must not ‘restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired’ (Stubbings v UK, 1996).
If the limitation period has expired the claim can be defended on the basis that it is ‘time barred’, regardless of the substantive merits of the claim.
When does the clock start, and end, for contract and tort actions?
The date on which the cause of action accrues depends on the circumstances and the claim being brought.
The applicable limitation period depends on the precise cause of action. Putting to one side claims under the DPA (discussed in the next post), as a general rule for contractual and most tort claims, the limitation period is six years from accrual of the cause of action (Limitation Act 1980, ss 2 and 5). For a contract made by deed (which would be unusual between a developer and a flat purchaser), the limitation period is 12 years (Limitation Act 1980, s 8).
Generally:
- For contractual claims, the cause of action starts on the date of breach of contract;
- For negligence based tort claims, the cause of action generally starts on the date on which the damage is suffered, that is, the date on which a quantifiable or ascertainable loss is suffered. In practice, with unsuitable or defective construction the cause of action arises when the work is finished, usually the date of practical completion: ‘... a building is a manufactured thing, and if it is unsuitable or defective when it is handed over it seems to me that the cause of action arises when the person acquires it in its defective state’ (Tozer Kemsley Millbourn (Holdings) Ltd v J. Jarvis & Sons Ltd (1983, 4 ConLR 24)). The cause of action for a negligent design may, however, accrue earlier: The Oxford Architects Partnership v The Cheltenham Ladies College . Although attempts have been made to argue that it is ‘knowledge of the defect’ that should start the clock, ‘the knowledge test has not been applied in English law as marking the date on which damage is first suffered for the purpose of completing a cause of action in negligence.’ (New Islington and Hackney Housing Association Ltd v Pollard Thomas and Edwards Ltd, 2000). Applied to the fire safety context, the limitation clock starts ticking when the building is completed even though it is only much later that leaseholders learn of the damage and potential claims.
There are a couple of exceptions.
First, ‘negligence claims not involving personal injury’ come within the Latent Damage Act 1986, which introduced sections 14A and 14B into the Limitation Act 1980. This was intended to address the concern that sometimes damage is ‘hidden’ or ‘non-discoverable’. The end date then can be 3 years from when there is knowledge of a cause of action, with an overriding long-stop of 15 years from the date the cause of action accrued. The period may, for example, run for a further 3 years from when, post-Grenfell, claimants realised that their buildings were negligently constructed, which appears much more appropriate than the usual 6 years from construction rule. In practice, however, pursuing tort claims for defective construction is not straightforward, particularly since the 1990 House of Lords judgment in Murphy v Brentwood DC. It was held in that case that if a defect ‘becomes apparent before any injury or damage has been caused, the loss sustained by the building owner is purely economic…. [And] in the absence of the special relationship of proximity [purely economic losses] are not recoverable in tort.’ This means that loss for defective buildings is seldom recoverable in tort law. In Sportcity 4 Management v Countryside Properties (UK) Ltd (discussed here) the defendant relied on the Murphy decision to deny liability and the claimant’s barrister accepted that the authorities compelled the judge to conclude that the losses were irrecoverable as pure economic loss. It has been argued that this inability to recover for economic loss makes no sense in the context of defective buildings, but as Professor McKendrick points out although it might be possible to get the Supreme Court to reconsider this, litigating the point would be risky. In the meantime, lower courts are bound by the decision in Murphy. Until challenged, this decision significantly undermines the important reform in the Latent Damage Act. Further, section 14A of the Limitation Act 1980 has been held not to apply to claims framed in contract even if founded on an allegation of negligent conduct (Iron Trade Mutual Insurance Co Ltd v Buckenham Ltd, 1990).
Secondly, if the action is based on the fraud of the defendant, or facts have been ‘deliberately concealed’, time does not ‘begin to run until the plaintiff (claimant) has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it’ (Limitation Act 1980, s32). There have been cases in which the argument has been run that the building regulation certification by the building control inspector was fraudulent, that the issue of insurance warranty cover notes was fraudulent (both discussed here), or that the lack of building regulations approval had been concealed (discussed here).
Protecting a claim
Gibson and Hembling explain the key procedural steps involved in bringing claims, and the importance of observing time limits. In some cases time is so tight that it is difficult to secure the evidence required, and to observe the Pre-Action Protocol for Construction and Engineering Disputes. In those circumstances, claimants should still issue the claim but should then, as specifically contemplated in the Pre-Action Protocol, apply to the court for a stay (postponement) to complete the pre-action steps. A stay ‘halts’ the proceedings; and as Coulson LJ remarks in Grant v Dawn Meats (2018) once it is lifted the ‘parties (and the court) pick up where they left off’ when the stay was imposed.
An alternative to issuing a claim is for the claimant and defendant to enter a standstill agreement. This “stops the clock” for limitation purposes with the result that the claimant will not need to incur the costs and expenses of issuing a claim to protect their legal rights and avoid any claim being “time barred”. However, both claimant and defendant need to agree a standstill – and a defendant may not agree (although a refusal to enter into a standstill agreement which forces claimants to issue proceedings and incur costs, and which potentially wastes valuable court time, will likely be taken into account by a court in respect of cost awards).
As can be seen, although there are policy reasons supporting limitation rules generally, there is a serious risk that in cases of defective construction they are liable to erode ‘the court’s ability to remedy wrongs …[and] to protect legitimate interests’(Zuckerman) and, as required by the overriding objective, to ‘deal with cases justly’. The next post looks at big changes made by the BSA.
How to cite this blog post (Harvard style):
S. Bright. (2022) Limitation Periods in contract and tort: How much time is there to bring a claim?. Available at:https://blogs.law.ox.ac.uk/housing-after-grenfell-blog/blog-post/2022/07/limitation-periods-contract-and-tort-how-much-time. Accessed on: 30/05/2023
FAQs
Limitation Periods in contract and tort: How much time is there to bring a claim? ›
The applicable limitation period depends on the precise cause of action. Putting to one side claims under the DPA (discussed in the next post), as a general rule for contractual and most tort claims, the limitation period is six years from accrual of the cause of action (Limitation Act 1980, ss 2 and 5).
What are the limitations for tort claims? ›The limitation period in contract is also six years but time in contract runs from the date of breach, while in negligence it runs from the occurrence of damage. Damage is capable of occurring later than breach with the effect that tort claims in negligence may afford a more generous time limit in certain cases.
What is the limitation period for a claim? ›Limitation periods vary depending on the type of claim involved and the circumstances of each case. For most claims in contract or tort, the limitation period is six years from the date of the cause of action.
What is the limitation period for an action for breach of contract? ›In most states, a cause of action for an agreement must be brought within six years.
What are the current limitation periods during which engineers and contractors can be sued in tort or contract in Ontario? ›In Ontario, the basic limitation period is two years – a person must commence an action within two years of when he or she first knew that a claim could be made. Normally, this would be two years after the claimant suffered the injury or the damage that was the subject of the claim.
What are the limitations of a contract? ›A contractual limitation period holds any party accountable for any damages or failure to fulfill his or her end of a bargain. When it comes to construction agreements, limitation periods pertain to claims are brought against a contractor.
What is limitation of liability and limitation of damages? ›A limitation of liability clause in a contract limits the amount of money or damages that one party can recover from another party for breaches or performance failures. In other words, the clause can put a cap on the number of damages the organization will have to pay under certain circumstances.
What is the longest statute of limitations? ›- No time limit: Capital offenses, terrorism-related offenses that result in death or serious injury, and designated federal child abduction and sex offenses.
- 20 years: Art theft.
"limitation period", in relation to a claim, means the period after which a court proceeding must not be brought with respect to the claim; "local judgment" means any of the following: (a) a judgment, order or award of.
What happens if a claim is taking too long? ›You can sue your insurance company if it takes your insurance claim too long to settle. For example, you might have grounds for a lawsuit if your company doesn't rule on a claim within your state's timeframe.
What is an example of limitation period? ›
For example, the limitation period is two years to bring a claim for lack of payment in a sale of commercial goods. The limitation period starts running on the date the obligation must be performed by the other party. Contract: six years. Tort: six years.
What is the limitation period for personal injury tort? ›The limitation period for personal injury claims is generally three years. This means claims must be commenced in the courts within three years from the date on which the accident or incident occurred in which the injuries were caused; or three years from the date of 'knowledge'.
What is the statute of limitations during which parties to a contract may bring legal suit to enforce specific performance in Texas? ›The four-year statute of limitations applies to any cases that arise under a contract, including: Legal actions seeking specific performance of a contract. Lawsuits seeking breach of contract damages.
What relates to the time period after which a lawsuit Cannot be filed? ›Statutes of limitations are laws that specify how much time a person has to file a lawsuit against a company or an individual. Once this period of time or "statutory deadline" has passed, it is no longer possible to file a claim or case related to the alleged incident or event.
What is the statutory time limitation for a civil cause of action claiming damages for personal injury in Queensland? ›All personal injuries claims in Queensland must be commenced in a court by filing a Claim and Statement of Claim within a three (3) year period beginning on the date the action arises. This is usually the date the injury is received, but the time limit can run from a later date in some circumstances.
Are limitation of damages clauses enforceable? ›The short of it is that limitations of liability are generally upheld and enforceable by the courts.
What are the 5 limitations of a contract? ›Understand that there are various rules that limit recovery for the nonbreaching party in a contract case. Know how these concepts serve to limit contract remedies: foreseeability, mitigation of damages, certainty of damages, loss of power of avoidance, election of remedies, and agreement of the parties.
What does statute of limitations mean in contract law? ›A statute of limitations is the deadline for filing a lawsuit. Most lawsuits MUST be filed within a certain amount of time. In general, once the statute of limitations on a case “runs out,” the legal claim is not valid any longer.
What are the 4 rules of contract? ›A basic binding contract must comprise four key elements: offer, acceptance, consideration and intent to create legal relations.
What are exclusions from limitations of liability? ›Examples of exclusions from limitations of liability include losses resulting from a breach of confidentiality, refusal to provide services, death, bodily injury, damage to tangible property, violation of applicable law, gross negligence or willful misconduct.
What is a limitation of liability clause tort? ›
A limitation of liability clause is a contractual provision that restricts the type and amount of liability that one party (the offending party) assumes when it directly or indirectly causes another party (the injured party) to experience losses in connection with their contractual relationship.
What is standard limitation of liability? ›A limitation of liability clause (sometimes referred to simply as a liability clause) is the section in a contracted agreement that specifies the damages that one party will be obligated to provide to the other under terms and conditions stipulated in the contract.
How long is the US statute of limitations? ›The statute of limitation does have exceptions. Federal law says that the general 5-year statute of limitations applies in every case unless there is a specific code section that extends the statute of limitations for that particular offense.
Can you get in trouble for something you did years ago? ›Under California Penal Code 801 PC, felonies (or offenses punishable by imprisonment) have a statute of limitations of three years. Less severe charges involving misdemeanors have an SOL of one year (in general).
How much money is considered a federal offense? ›If the total value of the property stolen is $1000 or less, it's a federal misdemeanor. If convicted, you could face up to one year in federal prison and fines of up to $100,000, If the total value exceeds $1000, it's a felony offense.
Can you extend limitation period? ›The parties could agree to enter into a standstill agreement to extend the limitation period. whichever is the earlier of the two dates.
What is the 15 year longstop limitation period? ›What is the longstop limitation period for professional negligence claims? There is a longstop date of 15 years from the date of the negligence/loss in which the claim must be brought, after which, irrespective of when you first knew, or ought reasonably to have known, of a potential claim, you cannot bring the claim.
What is a limitation of action clause? ›A limitation clause, also called a limitation of liability clause, is a stipulation in an agreement that helps ensure that a company is not held liable for more than they agreed to be responsible for.
What does waiting period on a claim mean? ›What Is a Waiting Period? A waiting period is the amount of time an insured must wait before some or all of their coverage comes into effect. The insured may not receive benefits for claims filed during the waiting period. Waiting periods may also be known as elimination periods and qualifying periods.
What happens when a claim is denied for timely filing? ›If your claim was denied for timely filing, and it was not ever submitted in the timeframe allowed, then it is more difficult to appeal. If you have a valid reason for not submitting the claim, you can appeal based on that.
Why are claims delayed? ›
Generally, the money an insurance company receives in premiums goes into investment accounts that generate interest. The insurance company retains this money until the time they pay out to a policyholder, so an insurance company may delay a payout to secure as much interest revenue as possible.
What is considered a limitation? ›That which limits; a restriction; a qualification; a restraining condition, defining circumstance, or qualifying conception; as, limitations of thought. The cause of error is ignorance what restraints and limitations all principles have in regard of the matter whereunto they are applicable. (
Why do limitation periods exist? ›They exist because as more time passes, the court's ability to rule on a claim can be impeded by their ability to call experts or examine relevant evidence. Limitation periods differ based on the scenario, which is why it's important to consult a legal team you trust as soon as possible.
What is an example sentence for limitation? ›Example Sentences
a law aimed at the limitation of federal power They have placed a limitation on the amount of time we have available.
A tort is an act or omission that gives rise to injury or harm to another and amounts to a civil wrong for which courts impose liability. In the context of torts, "injury" describes the invasion of any legal right, whereas "harm" describes a loss or detriment in fact that an individual suffers. 1.
What is the statute of limitations on a tort claim in Washington state? ›In Washington, for personal injury lawsuits, the statute of limitations is three years. Individuals may find they have more than three years from the time of the injury causing event, because: At the time of the event, the injury was not apparent.
What are the four elements needed in a negligence case? ›- A Duty of Care. A duty of care is essentially an obligation that one party has toward another party to exercise a reasonable level of care given the circumstances. ...
- A Breach of Duty. ...
- Causation. ...
- Damages.
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreementthe parties may reduce the period of limitation to not less than one year but may not extend it.
Which of the following would make a contract void? ›A contract may be deemed void should the terms require one or both parties to participate in an illegal act, or if a party becomes incapable of meeting the terms as set forth, such as in the event of one party's death. A contract that is deemed voidable can be corrected through the process of ratification.
What is a breach of contract suit? ›What Constitutes a Breach of Contract? A contract case usually comes before a judge because one or both parties claim that the contract was breached. A breach of contract is a failure, without legal excuse, to perform any promise that forms all or part of the contract.
How do you get around the statute of limitations? ›
In general, there's no way around the statute of limitations. You have to officially file the suit in the courts within two years of your accident, or unfortunately, there's very little that even the best personal injury lawyer can do for you.
How many years does the statute of limitations allow a plaintiff to bring a suit for trespassing in Georgia? ›Georgia civil statute of limitations laws impose a two-year time limit for personal injuries and fraud, with a four-year statute of limitations for trespassing, debt collection, and injuries to personal property.
What is the time period in which a lawsuit can be brought? ›| State | Statute of Limitations | State Law |
|---|---|---|
| California | 2 years | Cal. Code of Civ. Proc. Sec. 335.1 |
| Colorado | 2 years | Colo. Rev. Stat. Sec. 13-80-102 |
| Connecticut | 2 years | Conn. Gen. State. Sec. 52-584 |
| Delaware | 2 years | Del. Code Ann. Title 10, Sec. 8119 |
The six year limitation period for a claim for breach of contract begins to run when the breach of contract occurs regardless of whether any damage is suffered at that point and regardless of whether the innocent party knows there has been a breach of contract.
How long after injury can you claim? ›Time limits
The most common claim in a personal injury case is negligence and the time limit for this is 3 years. This means that court proceedings must be issued within 3 years of you first being aware that you have suffered an injury.
The Limitations Act allows people claiming to have a cause of action to apply to a court for leave to extend a limitation period to allow the issue of court proceedings.
What is the limitation of damages in tort? ›The applicable limitation period depends on the precise cause of action. Putting to one side claims under the DPA (discussed in the next post), as a general rule for contractual and most tort claims, the limitation period is six years from accrual of the cause of action (Limitation Act 1980, ss 2 and 5).
What are the limitations of contract damages? ›A limitation of damages clause is a contractual agreement where parties either exclude or limit the availability of damages that statutory law otherwise entitles them to.
What are limitations of liability in a contract? ›A limitation of liability clause in a contract limits the amount of money or damages that one party can recover from another party for breaches or performance failures. In other words, the clause can put a cap on the number of damages the organization will have to pay under certain circumstances.
What are the 3 conditions of tort? ›To win a tort case, there are 3 elements that must be established in a claim: The defendant had a legal duty to act in a certain way, The defendant breached this duty by failing to act appropriately, and. The plaintiff suffered injury or loss as a direct result of the defendant's breach.
What does tort limitation mean? ›
Limited tort. Limits your ability to sue the at-fault driver; typically prohibits you from suing for pain and suffering unless the accident is deemed “serious” as defined by the state.
What tort is most difficult to prove? ›An intentional tort is harder to prove than a negligent act because it requires proof not only that the act was done but that the person who did it did so intentionally.
What are the four elements of a successful tort claim? ›- The accused had a duty, in most personal injury cases, to act in a way that did not cause you to become injured.
- The accused committed a breach of that duty.
- An injury occurred to you.
- The breach of duty was the proximate cause of your injury.
Common torts include:assault, battery, damage to personal property, conversion of personal property, and intentional infliction of emotional distress.
What are the 4 essentials of tort? ›Tort that defines a civil wrong, has four fundamental elements or components. The four components of a tort are obligation, unlawful act, injury, and remedy. So, to claim damages against the tort that one faced, these four elements need to be proved.
Can you limit liability in tort? ›You can only exclude liability for other losses caused by your negligence, if reasonable. 4. When dealing with a consumer, your standard terms can't exclude or restrict liability for breach unless reasonable.
What is limitation of damages? ›A limitation of damages clause is a contractual agreement where parties either exclude or limit the availability of damages that statutory law otherwise entitles them to.
What does statute of limitations mean in legal terms? ›statute of limitations. n. a law which sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim. The periods vary by state. Federal statutes set the limitations for suits filed in federal courts.
What is a limitation of personal liability clause? ›A limitation of liability clause (sometimes referred to simply as a liability clause) is the section in a contracted agreement that specifies the damages that one party will be obligated to provide to the other under terms and conditions stipulated in the contract.
What 4 things must the prosecution prove to prove a tort case? ›Negligence claims must prove four things in court: duty, breach, causation, and damages/harm.
What are the four elements a plaintiff must prove in a tort suit? ›
A negligence claim requires that the person bringing the claim (the plaintiff) establish four distinct elements: duty of care, breach, causation, and damages.
What must a tort plaintiff prove? ›A plaintiff must prove that the defendant's act or omission caused the plaintiff to be exposed to unreasonable risk of injury and/or harm. In other words, the defendant failed to meet their obligation to the plaintiff and therefore put the plaintiff in harm's way.