The beautiful harshness of English limitation of actions law

The technical defence is for me a beautiful fascination. A self-confessed “fact Nazi” and chronology enthusiast, I would nevertheless prefer not to have to charge clients for the kind of obsessive mastery of facts in complicated and long-running failed litigation which is the subject of a professional negligence suit unless absolutely necessary. Summary disposition holds a lot of appeal, in other words.

So I know the exquisite schadenfreude the defendants in Jessup v Wetherell [2006] EWHC 2582 (Queen’s Bench) must have indulged in when they beat a professional negligence suit on what I consider to have been a fairly optimistic limitations defence. The clients’ proceedings had been struck out for want of prosecution. They sued their lawyers for damages for delay within 6 years of the striking out. But that wasn’t soon enough for the Queen’s Bench Division. Once again, the English courts held that some damage was first suffered — and hence the cause of action in negligence commenced — not when the claim was struck out for want of prosecution, but when a want of prosecution application, if made by the other side in the original proceedings, would have succeeded. Since the writ came more than 6 years after that time, the case was too late.¬† Australian courts’ jurisprudence¬† is in step with the English courts: see “Mega Firm Escapes Liability for Clear Negligence in Limitations Decision.” I say “once again” because the same result prevailed in Khan v Falvey [2002] EWCACiv 400. I had thought that decision a freak of nature, a case too good for defendants to be true, never to be repeated. But now, not only has the decision been followed in this latest case, but I learn that there has been a case in between which has also adopted the same reasoning: Hatton v Chafes [2003] EWCACiv 341, a decision of the English Court of Appeal where the lead judge also helpfully said at [12]:

“A claimant cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period if he has suffered damage from the same wrongful act outside that period: Khan v Falvey at paragraph 23, following Knapp v Ecclesiastical Insurance Group Plc [1998] PNLR 172 per Hobhouse LJ at 184 and 187.”

I suspect a happy coincidence is at the heart of all this. Not so long ago, the law was as the average bleeding heart might have assumed. Hopkins v Mackenzie [2001] Lloyd’s Law Reports 600 said that there was no damage until the proceedings were actually dismissed for want of prosecution. But then some bright spark took the House of Lords’ decision in Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627 and applied it to this fact scenario to overturn Hopkins v Mackenzie and give birth to the line of cases we are now examining. The happy coincidence is that in Nykredit, the House of Lords was asked by a plaintiff to identify as early as possible a commencement of a cause of action, because the earlier the cause of action arose, the more interest it could get under a statute which provided for the payment of interest between the accrual of the cause of action and judgment. Freed of the context of a defendant trying to shut out an otherwise deserving plaintiff by a technical defence, the Court found to the plaintiff’s benefit that the cause of action accrued when some loss was first suffered (substantially earlier than when the main loss was later suffered). It was a correct application of first principles, unperverted by the plaintiff pity perversion phenomenon.

In Jessup v Wetherell, the court found that a want of prosecution application had already been made prior to the sixth backwards anniversary of the professional negligence writ, and as at that anniversary, it was bound to succeed, discovery not yet having been completed 7 years into the proceedings. Accordingly, the professional negligence claim was statute barred because the plaintiffs had already then first suffered some non-negligible loss. The loss was the certain failure of their proceedings. 7 years’ investment had been lost by then; all that remained was for the exercise in the judicial confirmation of that fact to be made.

Hat tip to Reynolds Porter Chamberlain’s newsletter for bringing the case to my attention.

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