Professional negligence solicitor, Lee Dawkins, highlights the perils of the Limitation Act in professional Negligence Claims
Limitation in professional negligence claims (especially professional negligence claims against solicitors) can often seem like a moveable feast.
The primary limitation period is six years from the date on which the cause of action accrued. The cause of action in a professional negligence claim is said to accrue when the claimant suffers actual damage, regardless of whether that is also the date of the negligent act or omission. This seems straightforward enough, so long as you can identify the date of accrual of the cause of action – which is not always as easy as it sounds.
Claimants also have a fallback limitation date where the facts relevant to the cause of action are not known. In these cases an extension of three years is permitted running from the earliest date on which the claimant had the knowledge required to bring an action for damages for professional negligence. Again, this date is not always obvious and can be difficult to pin down.
The importance of identifying the correct limitation date was highlighted in a recent Court of Appeal judgment when a professional negligence claim brought by the administrator of an estate against a firm of solicitors was dismissed on the basis that too much time had elapsed since the loss arose.
John Lane brought the professional negligence action as personal representative of his late sister’s estate. Several years after her death in 1997 Mr Lane distributed part of the estate to a beneficiary. However, a niece of the deceased was pursuing a proprietary estoppel claim against the estate. When she won her proprietary estoppel claim and found she could not recover the monies from the beneficiary, she brought an action against Mr Lane himself.
Mr Lane in turn sued his solicitors for professional negligence. He said that his solicitors should have advised him not to distribute the estate until the niece’s proprietary estoppel claim had been resolved.
The Court of Appeal had every sympathy for Mr Lane, indicating that he had been let down by his solicitors. However, the solicitors defended the professional negligence claim on the basis that it had been brought out of time and was therefore statute barred under the Limitation Act 1980.
The court had to consider the date that Mr Lane’s loss had accrued. The solicitors said that it was the date upon which the distribution had been made which was more than six years before Mr Lane had brought his claim. Mr Lane disagreed, arguing that the limitation period should not run until the date upon which the niece had established her right to the estate.
There were arguments of a technical nature concerning the date upon which the cause of action had accrued and the distinction between a proprietary estoppel claim which the niece had brought and a constructive trust claim which the niece had been entitled to bring. In the end, the court concluded that the niece could have brought a claim for a constructive trust which would have been vested and not contingent and as such the cause of action would have accrued at the earlier date as alleged by the solicitors. As a result, Mr Lane’s appeal was dismissed.
This case illustrates how important limitation issues can be in professional negligence claims. Negligence claims against solicitors relating to estates are frequently defeated by limitation arguments. The case also demonstrates how difficult it can sometimes be to identify the correct limitation date. The lesson to be learned from this case seems to be that delay should always be avoided particularly if there is any doubt as to the date upon which the cause of action for a professional negligence claim accrued.