One of the reasons we recommend taking advice as soon as you are aware that a problem has arisen is that time limits apply (as set out in the Limitation Act 1980) to virtually all legal actions and if a claim is not brought in time, the court will, in all probability, refuse to hear it.
A recent case illustrates the problem. It involved a property development company that bought an unused industrial site. It wished to remove some redundant oil storage tanks so that the site could be used for other purposes. The developer engaged an architect, who advised that the tanks could be removed without the need for planning permission. This was done in 2003.
The architect’s advice was incorrect, and in March 2007 the local council issued a notice requiring the property developer to cease use of the site, which was the source of a dispute with the council that lasted some time.
The property owner sued the architect for negligence, commencing its action in June 2010. It was accepted that it could not make a claim for breach of contract, because the action had commenced more than six years after the ‘cause of action’ (the negligent advice) had arisen.
The claim was therefore made under the law of tort (civil wrong). In tort, the normal time limit for making a claim is six years after the damage occurs. However, despite an appeal on the decision, it was ruled that the damage occurred when the tanks were removed, and so that claim was ‘out of time’ as well. However, another section of the Limitation Act provides that a claim for negligence can be made up to a further three years after the six-year period if the claimant only becomes aware (or ought reasonably to have been aware) of the negligence at a later date.
The issue then was when the developer first had the ‘requisite knowledge’ of the negligence.
The architect was able to show that by May 2006 the developer was aware of the issue involving planning permission and thus had sufficient knowledge to realise that a claim in negligence may be able to be brought. Indeed, by March 2007, the council had issued the planning enforcement notice.
As the action was only commenced in June 2010 – more than three years after either date – the time limit could not therefore be extended and the claim failed.