Kerry Underwood

LIMITATION: TWO RECENT CASES

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Claim Allowed Under Section 33 of the Limitation Act After Defendant Told He Would Not Be Sued

In Ellis v Heart of England NHS Foundation Trust and others [2018] EWHC 3505 (Ch) (20 December 2018)

the High Court disapplied Section 33 of the Limitation Act 1980 so as to allow the claimant to proceed against the third defendant even though the claimant had previously told that defendant that he would not be sued.

The High Court also held that the case law in relation to relief from sanctions was irrelevant as far as Section 33 applications were concerned.

The correct guidance was to be found in

The Chief Constable of Greater Manchester Police v Carroll [2017] EWCA Civ 1992.

Here the claimant instructed solicitors in October 2013 and issued a Letter of Claim in May 2015 and the third defendant responded in March 2016 and the primary limitation period was extended by agreement and expired in June 2016.

In September 2016 the claimant’s solicitors told the solicitors for the third defendant that the defendant was “released from this matter and we are satisfied for you to close your file”.

Following advice from new counsel a further expert’s report was obtained and in January 2017 the claimant’s solicitors advised the third defendant that he would be pursuing him after all.

Here the court held that the third defendant was on notice from March 2013 of a possible damages claim and, after formal notification, had had full opportunity to investigate and respond well within the primary limitation period and the claimant’s delay in issuing proceedings was understandable given the first negative report of the first expert.

The third defendant could not identify any prejudice to his defence if the claim proceeded, but if the claimant could not pursue his potentially significant claim against the third defendant then he would be left with an uncertain loss of charge claim against his own lawyers.

 

Section 14A and Latent Damages

In Munroe K Ltd and another v Bank of Scotland plc [2018] EWHC 3583 (Comm) 20 December 2018)

the Commercial Court, a part of the High Court, granted summary judgment to the defendant bank on an interest rate swaps misselling claim holding that a claimant cannot postpone the date of knowledge under Section 14A of the Limitation Act 1980 by choosing which particulars of breach of duty to rely on.

Before the alleged misselling in 2006 and 2008, the defendant had calculated its worst case potential future exposure to the claimants and the claimants alleged that the defendant had breached its advisory duty, and duty not to misstate, by failing to disclose the existence of that calculation, and thus had misled the claimants as to the risks of entering into the swaps.

The claimants contended that they did not discover the calculation until November 2015 and would not have entered into the swaps had the defendant supplied accurate information.

The issue was when the claimants had the requisite knowledge, for the purposes of Section 14A, for bringing an action.

The key question was when the claimants knew that the damage was due in whole or in part to the act or omission alleged to constitute negligence – see Section 14A(8)(a).

By 2009 the claimants knew of their significant actual liability and the fact that they had not been advised or informed of a significant potential liability, whether or not as high as the worst case calculation.

The claimants’ true cause of action was the defendant’s failure in not advising them or informing them of their potential liability when the swaps were sold.

Section 14A did not extend limitation until the identification of every last particular of breach – see

Haward v Fawcetts [2006] UKHL 9.

This was not a case of a continuing duty with breaches occurring over a period.

The claimants’ choice to omit one particular of breach, material enough to satisfy Section 14A(7), in favour of another particular, perhaps, as here, discovered later does not affect the position under Section 14A.

 

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Written by kerryunderwood

January 3, 2019 at 4:00 pm

Posted in Uncategorized

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