The recent decision in ECU Group Plc v HSBC Bank UK Plc [2021] EWHC 2875 (Comm) is a stark reminder of the possible implications of delaying a claim.
The Limitation Act 1980 (‘LA 1980’) sets out the limitation periods for different causes of action. The limitation period varies for the principal type of claim brought. Section 5 of the LA 1980 provides that the limitation period is 6 years for simple contract claims and section 2 for certain actions in tort. Section 8 of the act provides that for actions on specialty, where there the contract is under seal, the time limit shall be 12 years.
LA 1980 section 6 provides that the limitation period is 6 years where a loan agreement does not provide for repayment of the debt on or before a fixed date. The limitation period commences from the date of demand of payment.
The case of Rowan Companies Inc v Lambert Eggink Offshore Transport Consultants [1999] held that section 9 of LA 1980 was not restricted to claims for liquated sums and that the limitation period applied to any claims for money made pursuant to a statute. The limitation period for claims for the recovery of rent arrears, or damages in respect of arrears of rent, is contained in S 19 of LA 1980 as 6 years from the date on which the arrears fell due.
For claims for recovery of land, section 15 of LA 1980 provides no action can be brought against any person after the expiration of 12 years from the date on which the right of action accrued.
Section 32 of LA 1980 provides that the in claims for fraud, concealment, and mistake: the clock does not begin until the claimant has discovered the fraud, concealment or mistake or could with reasonable diligence have discovered it. The latter is applicable in any of the following circumstances: (i) the action is based on fraud of the defendant; (ii) where any fact relevant to the claimant’s right of action has been deliberately concealed by the defendant; or (iii) where the action is for relief from the consequences of a mistake.
In the case of ECU Group plc v HSBC Bank UK Plc [2021,] the Court’s ruled that the Claimant had sufficient knowledge to bring the claim in 2006 and therefore the claim was time-barred. This resulted in the Claimant having to pay the Defendant’s legal costs in excess of US$11.6m.
As well as providing time limits for issuing claims, section 24(1) of the LA 1980 provides that an action shall not be brought upon any Judgment after the expiration of 6 years from the date on which the Judgment became enforceable. This does not apply to the enforcement of a Judgment; however, permission is required to issue a writ or warrant of control on a Judgment more than 6 years old. In addition, the Interest on the Judgment sum will be limited to 6 years.
It remains unclear whether the enforcement of a Tomlin Order is also subject to the LA 1980. In Bostani and others v Pieper and another [2019] EWHC 547 (comm), it was held in the Commercial Court that an application to enforce the terms of a Tomlin order and to enter Judgment was subject to the 6-year limitation period, starting from when the right to enforce arose, for actions founded on a simple contract.
If the limitation period has expired, then your claim, regardless of its merits, will be time-barred. It is there crucial to be conscious of the time limit and to check the relevant dates to ensure the limitation date has not expired.
Written by : Nilojana Nirmalan, Paralegal
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