Pre-action considerations and steps - Preliminary considerations: limitation and pre-action protocols

Learning Outcomes

This article explains the fundamental pre-action considerations relating to limitation periods and pre-action protocols required for the SQE1 assessment. After reading this article, you should be able to identify the key limitation periods for contract and tort claims, understand how these periods are calculated, and recognise the implications of expiry. You will also understand the purpose and general requirements of the Practice Direction on Pre-Action Conduct and Protocols, including the potential consequences of non-compliance. This knowledge will assist you in applying these principles to SQE1 assessment scenarios.

SQE1 Syllabus

For SQE1, you are required to understand the key preliminary steps taken before initiating formal court proceedings. This involves a practical application of the rules concerning limitation periods and the requirements set out in the Practice Direction on Pre-Action Conduct and Protocols. You will need to identify the correct limitation periods, understand when time starts to run, and recognise the consequences of failing to issue proceedings within the prescribed time limits. Furthermore, you should be able to apply the principles and objectives of pre-action conduct expected of parties in dispute.

As you work through this article, remember to pay particular attention in your revision to:

  • the statutory limitation periods applicable to claims in contract and tort, including personal injury claims
  • how to calculate when a limitation period starts and expires
  • the effect of limitation periods expiring before a claim is issued
  • the purpose and main steps outlined in the Practice Direction on Pre-Action Conduct and Protocols
  • the consequences for parties who fail to comply with the relevant pre-action requirements.

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 bringing a claim for breach of contract?
    1. 1 year
    2. 3 years
    3. 6 years
    4. 12 years

  2. True or False: If a claimant issues a claim form one day after the relevant limitation period has expired, the defendant must raise limitation as a defence for the claim to be potentially struck out.

  3. Which of the following is NOT a primary aim of pre-action protocols and the Practice Direction on Pre-Action Conduct?
    1. To encourage early settlement of disputes.
    2. To ensure parties exchange sufficient information.
    3. To guarantee the claimant will win their case.
    4. To support the efficient management of proceedings if litigation cannot be avoided.
  4. What is the typical first step a potential claimant should take under the Practice Direction on Pre-Action Conduct?
    1. Issue a claim form at court.
    2. Send a detailed letter before claim to the potential defendant.
    3. Apply for summary judgment.
    4. Arrange a mediation session.

Introduction

Before initiating court proceedings, solicitors must advise clients on several critical preliminary matters. Two fundamental considerations are limitation periods and pre-action conduct. Limitation periods impose strict deadlines for commencing claims, while pre-action protocols and the Practice Direction on Pre-Action Conduct outline the steps parties are expected to take to try and resolve disputes without resorting to litigation. Understanding these is essential for providing sound advice and conducting litigation effectively, forming a key part of the functioning legal knowledge required for SQE1. Failure to comply with these rules can have severe consequences, including the inability to pursue a valid claim or facing cost sanctions imposed by the court.

Limitation Periods

The Limitation Act 1980 sets out statutory time limits within which legal proceedings must be commenced. These periods exist to ensure legal certainty, prevent defendants from facing indefinite threats of litigation, and address the difficulties of litigating claims where evidence may have become stale or lost over time.

Key Term: Limitation Period
A legally defined timeframe within which a party must commence court proceedings for a particular type of claim.

The Purpose of Limitation Periods

Limitation periods serve several key purposes:

  • Certainty: They provide finality for potential defendants.
  • Evidence: They encourage claimants to bring claims while evidence is still reasonably fresh and available.
  • Promptness: They push claimants to pursue their rights without undue delay.

Missing a limitation deadline typically means the claim is 'statute-barred', providing the defendant with a complete defence.

Key Term: Statute Barred
A claim that cannot be pursued in court because the relevant statutory limitation period has expired.

Key Limitation Periods

You must be familiar with the main limitation periods relevant to contract and tort claims for SQE1:

  • Contract Claims: The limitation period is six years from the date the cause of action accrued (s 5 Limitation Act 1980). The cause of action accrues on the date of the breach of contract, not necessarily when damage is suffered.
  • Tort Claims (General): The limitation period is six years from the date the cause of action accrued (s 2 Limitation Act 1980). In torts like negligence, the cause of action generally accrues when damage is suffered as a result of the breach of duty.
  • Personal Injury Claims (Negligence/Breach of Duty): A shorter period applies. The claim must be brought within three years from either:
    • the date the cause of action accrued (the date the injury occurred); OR
    • the claimant's 'date of knowledge', if later (s 11 Limitation Act 1980). The date of knowledge is when the claimant first knew the injury was significant, attributable to the defendant's act/omission, and knew the defendant's identity (s 14 Limitation Act 1980).
  • Latent Damage Claims (Negligence): For damage not discovered until later, the period is the later of six years from the damage occurring or three years from the claimant's date of knowledge, subject to an overriding fifteen-year longstop from the date of the negligent act (ss 14A, 14B Limitation Act 1980).

Calculating Limitation Periods

Time generally starts running from the day after the cause of action accrues. For example, if a breach of contract occurs on 10 June 2023, the six-year limitation period starts on 11 June 2023 and expires at midnight on 10 June 2029.

Proceedings are 'brought' for limitation purposes when the court receives the claim form, not when it is issued or served. If the limitation period expires on a day the court office is closed (e.g., a weekend or bank holiday), the claim form must be received on the next day the office is open.

Effect of Expiry

If a claim is brought after the limitation period has expired, the claim is not automatically invalid. However, the defendant can raise limitation as a complete defence. If the defendant pleads limitation and the court agrees the claim is statute-barred, the claim will fail.

Extending Limitation Periods

In certain circumstances, the running of the limitation period may be postponed or extended:

  • Disability: If the claimant is a child (under 18) or lacks mental capacity (as defined by the Mental Capacity Act 2005) when the cause of action accrues, the limitation period does not start until the disability ceases (s 28 Limitation Act 1980). For a child, this means the period starts on their 18th birthday.
  • Fraud, Concealment, or Mistake: Where the defendant has deliberately concealed relevant facts or the claim is based on fraud or mistake, the limitation period does not start until the claimant discovers the fraud, concealment, or mistake, or could have discovered it with reasonable diligence (s 32 Limitation Act 1980).
  • Acknowledgment or Part Payment (Debt Claims): In claims for debt or other liquidated pecuniary sums, if the debtor acknowledges the debt in writing and signed, or makes a part payment, the limitation period restarts from the date of acknowledgment or payment (ss 29-31 Limitation Act 1980).

The court also has a limited discretion under s 33 Limitation Act 1980 to disapply the three-year limitation period for personal injury claims if it considers it equitable to do so, weighing the prejudice to each party.

Worked Example 1.1

Anya entered into a contract with Ben Builders Ltd on 1 May 2018 for construction work to be completed by 1 September 2018. The work was completed late on 1 December 2018. Anya discovered defects in the work on 1 February 2024. When does the limitation period expire for a claim for breach of contract based on the defective work?

Answer: The limitation period for breach of contract is six years from the date of breach. The breach regarding defective work likely occurred on the date of completion, 1 December 2018. The limitation period would therefore expire at midnight on 1 December 2024. The date of discovery of the defect is irrelevant for a contract claim's limitation period (unlike latent damage claims in tort).

Pre-Action Conduct

Before resorting to litigation, the Civil Procedure Rules (CPR) expect parties to engage constructively to try and resolve their disputes. This is guided by specific Pre-Action Protocols (PAPs) for certain claim types and the overarching Practice Direction on Pre-Action Conduct and Protocols (PD-PAC) for claims not covered by a specific PAP.

Key Term: Pre-Action Protocol (PAP)
A protocol, annexed to the CPR, setting out specific steps the court expects parties to take before commencing proceedings in particular types of civil claims (e.g., Personal Injury, Professional Negligence).

Key Term: Practice Direction on Pre-Action Conduct and Protocols (PD-PAC)
A Practice Direction providing general guidance on pre-action conduct for civil claims where no specific Pre-Action Protocol applies.

The Overriding Objective and Pre-Action Steps

The requirement to follow pre-action steps aligns with the CPR's overriding objective (CPR 1.1) to deal with cases justly and at proportionate cost. Encouraging pre-action communication and settlement attempts helps achieve this by:

  • Narrowing the issues in dispute.
  • Allowing parties to understand each other's case.
  • Encouraging early settlement, saving costs and court resources.
  • Supporting efficient case management if litigation becomes necessary.

Practice Direction on Pre-Action Conduct and Protocols (PD-PAC)

The PD-PAC applies where no specific PAP covers the dispute. Its core principles emphasize reasonable and proportionate steps:

  • Litigation as a last resort: Parties must consider ADR.
  • Information Exchange: Parties should exchange sufficient information to understand positions and make informed decisions.
  • Settlement Attempts: Parties should try to settle without proceedings.
  • Proportionality: Steps taken and costs incurred should be proportionate.

Key Steps in Pre-Action Conduct (PD-PAC)

The PD-PAC outlines a typical sequence:

  1. Claimant's Letter Before Claim: The potential claimant writes to the potential defendant setting out concise details: basis of claim, summary of facts, what is sought (including calculation if monetary), and enclosing/listing key documents.
  2. Defendant's Response: The defendant should respond within a reasonable time (e.g., 14 days straightforward, up to 3 months complex). The response should confirm if the claim is accepted (in whole/part), state reasons if disputed, identify disputed facts/parts of the claim, and state if a counterclaim is intended, enclosing key documents.
  3. Disclosure: Parties disclose key documents relevant to the issues in dispute.
  4. Experts: Parties should consider if expert evidence is needed and whether a single joint expert could be used.
  5. ADR/Settlement: Parties should actively consider negotiation or ADR.
  6. Stocktake: If the dispute remains unresolved, parties should review their positions before issuing proceedings.

Key Term: Letter Before Claim
A formal letter sent by a potential claimant to a potential defendant before court proceedings are issued, outlining the claim details as required by the relevant PAP or the PD-PAC.

Consequences of Non-Compliance

While PAPs and the PD-PAC are not rigid rules in the same way as the CPR, failure to comply can have significant consequences if the matter proceeds to litigation. CPR 44.2(5)(a) explicitly states the court will consider compliance with pre-action conduct when making costs orders. Sanctions for unreasonable non-compliance can include:

  • Costs Orders: The non-compliant party may be ordered to pay some or all of the other party's costs, potentially on the more punitive indemnity basis.
  • Interest Penalties: A non-compliant claimant might be deprived of interest on damages awarded, or awarded interest at a lower rate. A non-compliant defendant might be ordered to pay interest on damages at a higher rate (up to 10% above base rate).
  • Stay of Proceedings: The court might stay (pause) the proceedings until the required pre-action steps are taken.

Worked Example 1.2

BuildCo Ltd completed construction work for Client plc. Client plc refused to pay the final £50,000 invoice, alleging defects. BuildCo issued proceedings immediately without sending a letter before claim or attempting negotiation, citing urgency due to cash flow issues. Client plc defended the claim. At trial, BuildCo succeeds, but the judge finds their failure to follow pre-action steps was unreasonable. What order regarding interest might the court make?

Answer: The court has discretion. As BuildCo (the claimant) failed unreasonably to comply with pre-action expectations, the court could order that BuildCo is deprived of some or all of the interest it would normally receive on the £50,000 judgment sum for a specified period, or award interest at a lower rate than usual, as a sanction for its non-compliance.

Exam Warning

Do not assume that limitation pressures automatically excuse non-compliance with pre-action protocols. While the court acknowledges the need to issue proceedings before limitation expires, it expects parties to consider applying for a stay immediately after issue to allow compliance or seek a 'standstill agreement' pre-issue. Unjustified failure to engage, even near a limitation deadline, can still attract sanctions.

Key Term: Standstill Agreement
A contractual agreement between potential litigants to suspend or extend a statutory limitation period, typically to allow time for negotiation or compliance with pre-action protocols without the need to issue protective proceedings.

Summary

  • Limitation periods (mainly under the Limitation Act 1980) set strict deadlines for commencing legal claims (e.g., 6 years for contract/general tort, 3 years for personal injury from accrual/knowledge).
  • Failure to issue a claim within the limitation period makes it statute-barred, providing the defendant with a complete defence.
  • Limitation periods can be postponed or extended in specific circumstances like claimant disability or defendant fraud/concealment.
  • Pre-action protocols and the Practice Direction on Pre-Action Conduct and Protocols (PD-PAC) aim to encourage early communication, information exchange, and settlement before litigation.
  • Key pre-action steps generally include a Letter Before Claim, Defendant's Response, disclosure of key documents, and consideration of ADR.
  • Unreasonable failure to comply with pre-action requirements can lead to court sanctions, primarily affecting costs and interest awards.

Key Point Checklist

This article has covered the following key knowledge points:

  • The purpose and effect of statutory limitation periods.
  • The main limitation periods for contract claims, tort claims, personal injury, and latent damage.
  • How to determine the start date and expiry date of limitation periods.
  • Circumstances where limitation periods may be extended or postponed.
  • The significance of the overriding objective in pre-action conduct.
  • The purpose and general steps required by the Practice Direction on Pre-Action Conduct and Protocols (PD-PAC).
  • The potential sanctions for failing to comply with pre-action requirements.

Key Terms and Concepts

  • Limitation Period
  • Statute Barred
  • Pre-Action Protocol (PAP)
  • Practice Direction on Pre-Action Conduct and Protocols (PD-PAC)
  • Letter Before Claim
  • Standstill Agreement
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