Pre-action considerations and steps - Calculating limitation periods for claims in contract and tort

Learning Outcomes

This article explains the fundamental principles governing limitation periods in civil claims under English law, focusing on contract and tort actions. After studying this material, you should understand the significance of limitation periods, the general time limits applicable under the Limitation Act 1980, and how to identify the date from which time starts to run for different types of claims. You will also learn about key exceptions and special rules, such as those for personal injury, latent damage, and cases involving fraud or disability. This knowledge is key for advising clients on the viability of their claims and for meeting procedural deadlines in practice.

SQE1 Syllabus

For SQE1, you need a practical understanding of limitation periods as a critical pre-action consideration. You must be able to calculate the relevant periods for claims in contract and tort and recognise situations where standard time limits may be varied or postponed. This includes understanding:

  • The effect of limitation periods expiring (claims becoming statute-barred).
  • The standard limitation periods for contract and tort claims under the Limitation Act 1980.
  • How to determine the date of accrual for causes of action in contract (date of breach) and tort (date of damage).
  • The specific rules for personal injury claims, including the concept of 'date of knowledge'.
  • The provisions relating to latent damage.
  • The effect of fraud, concealment, mistake, and disability on limitation periods.
  • The consequence of failing to issue proceedings within the relevant limitation period.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. What is the standard limitation period for a claim based on breach of a simple contract?
    1. 3 years from the date of breach
    2. 6 years from the date of breach
    3. 6 years from the date the claimant discovered the breach
    4. 12 years from the date of breach
  2. In a claim for negligence (excluding personal injury), when does the limitation period generally start to run?
    1. From the date of the negligent act or omission
    2. From the date the contract (if any) was made
    3. From the date the claimant suffered actionable damage
    4. From the date the claimant realised the defendant was negligent
  3. What is the limitation period for a personal injury claim?
    1. 6 years from the date of injury
    2. 3 years from the date of the accident
    3. 3 years from the date of injury or the claimant's date of knowledge, whichever is later
    4. 6 years from the claimant's date of knowledge

  4. True or false? The Limitation Act 1980 provides that the limitation period can be postponed if the defendant deliberately conceals a relevant fact.

Introduction

Before commencing litigation, a solicitor must determine whether the potential claim is within the relevant statutory time limit. This time limit is known as the limitation period. The primary statute governing these periods in England and Wales is the Limitation Act 1980. Missing the limitation deadline has severe consequences: the claim becomes statute-barred, meaning the defendant has a complete defence, regardless of the claim's merits. Calculating the limitation period accurately is therefore a fundamental aspect of pre-action case analysis and risk management. This involves identifying the correct limitation period for the specific cause of action and establishing the precise date from which time starts to run.

General Limitation Periods

The Limitation Act 1980 sets out different limitation periods for different types of claims. For the purposes of SQE1, the most important are those relating to contract and tort.

Key Term: Limitation Period
The statutory time limit within which legal proceedings must be commenced. Failure to commence proceedings within this period generally prevents the claimant from pursuing the claim.

Key Term: Statute-barred
A claim that cannot be enforced because the relevant limitation period has expired.

Key Term: Limitation Act 1980
The primary statute setting out the time limits for bringing different types of civil claims in England and Wales.

Contract Claims

For claims founded on simple contract (contracts not made by deed), the limitation period is six years from the date on which the cause of action accrued (Limitation Act 1980, s 5).

Key Term: Cause of Action Accrued (Contract)
In contract claims, the cause of action generally accrues on the date the breach of contract occurs, regardless of when the claimant discovers the breach or suffers damage.

This means the clock starts ticking from the moment the breach happens. For example, if a party fails to make a payment due on 1 June 2023, the limitation period starts on that date and expires at the end of 31 May 2029.

Tort Claims

For claims founded on tort (excluding personal injury, latent damage, and defamation), the limitation period is also six years from the date on which the cause of action accrued (Limitation Act 1980, s 2).

Key Term: Cause of Action Accrued (Tort)
In tort claims (like negligence), the cause of action generally accrues when actionable damage is suffered by the claimant as a result of the tortious act, not necessarily when the wrongful act itself occurred.

This is a key distinction from contract law. In negligence, for example, the negligent act might occur on one date, but if damage is not suffered until later, the limitation period only starts running from the date the damage occurs.

Worked Example 1.1

A surveyor provides a negligent property survey report in March 2022. The client purchases the property in April 2022 based on the report. In July 2024, defects missed by the surveyor become apparent, causing the property's value to decrease. When does the limitation period start?

Answer: The cause of action in tort (negligence) accrues when actionable damage is suffered. Here, the damage (decrease in property value due to the discovered defects) occurred in July 2024. Therefore, the six-year limitation period starts in July 2024. The claimant has until July 2030 to issue proceedings.

Specific Limitation Periods and Exceptions

The general six-year rules for contract and tort are subject to important exceptions and specific rules for certain types of claims or circumstances.

Personal Injury Claims

Claims involving damages for personal injury have a shorter limitation period. Under s 11 of the Limitation Act 1980, the period is three years from:

  • the date on which the cause of action accrued (the date of injury); or
  • the date of knowledge (if later) of the person injured.

Key Term: Date of Knowledge (Personal Injury)
The date on which the claimant first had knowledge: (a) that the injury was significant; (b) that the injury was attributable in whole or part to the act or omission alleged to constitute negligence; and (c) the identity of the defendant (LA 1980, s 14).

The 'date of knowledge' provision is particularly relevant in cases where the injury or its connection to the defendant's act is not immediately apparent, such as with industrial diseases or clinical negligence.

Latent Damage (Negligence)

Sometimes, damage caused by negligence (other than personal injury) is not discovered until many years after the negligent act. The Latent Damage Act 1986, amending the Limitation Act 1980, provides special time limits in these cases (LA 1980, s 14A). The claimant has the later of:

  • Six years from the date the cause of action accrued (when damage occurred); or
  • Three years from the earliest date the claimant had the knowledge required for bringing an action and the right to bring such an action (the 'starting date').

However, there is an overriding time limit (or 'longstop') of fifteen years from the date of the negligent act or omission (LA 1980, s 14B). This prevents claims arising indefinitely far into the future.

Worked Example 1.2

A house is built with defective foundations in 2010 due to the builder's negligence. Cracks (damage) first appear in 2018. The homeowner discovers the cause of the cracks (knowledge) in 2021. When does the limitation period expire?

Answer:

  1. Standard Period: 6 years from damage = 2018 + 6 years = 2024.
  2. Latent Damage Period: 3 years from knowledge = 2021 + 3 years = 2024.
  3. Longstop: 15 years from negligent act = 2010 + 15 years = 2025. The claimant has until the later of the standard period (2024) or the latent damage period (2024), subject to the longstop (2025). In this case, the limitation period expires at the end of 2024.

Fraud, Concealment, or Mistake

Section 32 of the Limitation Act 1980 provides that where the action is based upon the fraud of the defendant, or any fact relevant to the claimant's right of action has been deliberately concealed by the defendant, or the action is for relief from the consequences of a mistake, the limitation period does not begin to run until the claimant has discovered the fraud, concealment, or mistake, or could with reasonable diligence have discovered it.

Key Term: Deliberate Concealment (s 32 LA 1980)
Occurs where the defendant knowingly takes active steps to conceal a fact relevant to the claimant's right of action, or fails to disclose a fact when under a duty to do so. This postpones the start of the limitation period.

Disability

If the person to whom the cause of action accrued is under a disability (defined as being an infant, i.e., under 18, or lacking capacity under the Mental Capacity Act 2005) on the date when the cause of action accrued, the limitation period does not start to run until they cease to be under that disability (LA 1980, s 38 and s 28).

Calculating the Expiry Date

To calculate when the limitation period expires, you start counting from the day after the cause of action accrued. The period expires at the end of the relevant anniversary day.

  • Example: A breach of contract occurs on 15 July 2023. The six-year limitation period starts running on 16 July 2023 and expires at midnight on 15 July 2029.

Issuing the Claim Form

To stop time running for limitation purposes, the claimant must deliver the claim form to the court office, accompanied by the correct court fee, before the limitation period expires. The claim is 'brought' for limitation purposes on the date the court receives these documents, not the date the court issues or seals the form (which might be later).

Exam Warning

Always diarise the limitation date as soon as you identify it. Missing a limitation date is a common source of professional negligence claims against solicitors. Remember that issuing the claim form stops the limitation clock, but it must still be served correctly within its period of validity (usually 4 months).

Consequences of Expiry

Once the limitation period expires, the claim becomes statute-barred. While this does not extinguish the fundamental right itself, it provides the defendant with a complete procedural defence. If the defendant pleads limitation in their defence, the court must dismiss the claim. A claimant cannot pursue a statute-barred claim.

Key Point Checklist

This article has covered the following key knowledge points:

  • Limitation periods are statutory time limits for commencing legal proceedings, primarily governed by the Limitation Act 1980.
  • Failure to commence proceedings within the limitation period means the claim becomes statute-barred, giving the defendant a complete defence.
  • For simple contract claims, the period is 6 years from the date of breach.
  • For tort claims (excluding specific exceptions), the period is 6 years from the date damage is suffered.
  • Personal injury claims have a 3-year period, running from the date of injury or the date of knowledge, whichever is later.
  • Latent damage claims have special rules: 6 years from damage or 3 years from knowledge, subject to a 15-year longstop from the negligent act.
  • Limitation periods can be postponed in cases of fraud, deliberate concealment, or mistake (s 32).
  • Time does not run against claimants under a disability (minority or lack of capacity) until the disability ceases.
  • The limitation clock is stopped when the claim form and fee are received by the court.

Key Terms and Concepts

  • Limitation Period
  • Statute-barred
  • Limitation Act 1980
  • Cause of Action Accrued (Contract)
  • Cause of Action Accrued (Tort)
  • Date of Knowledge (Personal Injury)
  • Deliberate Concealment (s 32 LA 1980)
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