The Importance of Limitation Periods

The importance of limitation periods

Most limitation periods impose strict time limits within which a claim must be brought. As such, it is essential for any potential party to litigation to be fully appraised of how these time limits work in practice. The following guide provides an overview of the key limitation issues to consider when bringing or defending a claim, with examples of periods of limitation for certain causes of action.

What is limitation and why is this so important?

Before even beginning to consider the merits of a claim, one of the first questions around a client bringing an action is whether their claim is time-barred. If an action is not commenced within the relevant limitation period, and the time for issuing proceedings has expired, the defendant will typically have a complete defence to the claim, regardless of any wrongdoing on their part.

It is for the defendant to plead the defence of limitation, where an out-of-time claim can still be permitted to proceed by the courts where the point is not specifically pleaded. However, once the defendant has raised limitation, the burden will fall to the claimant to prove that time has not expired. For any claimant unable to discharge this burden, the claim will inevitably fail.

What are the relevant limitation periods?

When it comes to relevant limitation periods, this will all depend on the nature of the claim and the cause of action in contemplation by the prospective claimant. The Limitation Act 1980, which governs the law in this area, makes provision for the following principal limitation periods:

- an action founded on tort shall not be brought after the expiration of 6 years from the date on which the cause of action accrued.

- an action founded on simple contract, ie; a contract not contained within a deed, shall again not be brought after the expiration of 6 years from the date on which the cause of action accrued.

- an action upon a specialty, for example, for breach of an obligation contained within a deed, shall not be brought after the expiration of 12 years from the date on which the cause of action accrued.

In the context of tortious actions for defamation or malicious falsehood, such as slander and libel, the 6-year period is reduced to just one year from the date on which the cause of action accrued. The court also has the discretion to exclude this time limit where it would be equitable to do so.

When do different limitation periods start to run?

The starting point for the running of time is usually the date on which the cause of action accrues. For example, to be able to sue in simple contract, the cause of action accrues on the date of the alleged contractual breach, where the 6-year limitation period will run from this date.

In contrast, for claims based on fraud, concealment or mistake, the period of limitation will not begin to run until the date on which the claimant discovers the relevant facts giving rise to the claim ‘or’ from the time at which the claimant could have discovered these with reasonable diligence.

Time will only stop running for limitation purposes once proceedings are formally issued and the claim form is received by the court, or if the claimant enters into a standstill agreement with any potential defendant(s). If limitation is about to expire, it is possible to issue the claim form but not serve it immediately, although the claim form must be served within its validity period of 4 months.

So what does this mean for prospective parties?

As long as a claim has been brought well within the relevant limitation period, with no basis for an argument as to when the cause of action accrued, the issue of limitation will not create unnecessary difficulties for a prospective claimant. Avoiding imminent expiry of the limitation period will also mean that the claimant can comply with any relevant practice direction or pre-action protocol, in this way avoiding any criticism from the court or the need to apply for a stay of proceedings.

However, seeking specialist legal advice at the earliest possible opportunity can be key to establishing the merits of a claim and deciding how best to proceed without a ticking clock impacting this important decision-making process. A claim not only needs to be commenced in time, but there needs to be time within which to correspond with the prospective defendant to see where they stand, including whether the matter can be settled without recourse to litigation.

Equally, for the defendant faced with the prospect of defending a claim, sometimes several years down the line, seeking expert legal advice as to the substantive merits of disputing that claim, including any potential limitation defence, can often make short shrift of the threat of litigation.

Legal disclaimer

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.

Before acting on any of the information contained herein, expert advice should always be sought.

©Melissa Worth, January 2023