Court of Appeal considers whether limitation period ceased to run against a claimant when company was struck off the register

The court has power under the Companies Act 2006 to make a direction preventing a limitation period from running during all or part of the period in which a company is dissolved or struck off the register (in order to place the company (and anyone else) in the same position as if the company had not been dissolved or struck off). Prior caselaw has concentrated on whether the direction should be made in favour of the company, to allow it to bring a claim. However, in this case, the issue was whether the claimant was entitled to the direction in order to bring a claim against the company.

At first instance, the judge had made the direction on the basis that there had been a "window of opportunity" (if only a small one) during which the claimant might have issued proceedings had the company not been struck off the register.

The Court of Appeal has now allowed the appeal from that decision. It held that the judge had set the bar too low. Instead, the correct test to be applied was whether the claimant can show a clear causal link between the company's dissolution and the failure to bring proceedings within the applicable limitation period. Applying that test to the facts of the case, the Court of Appeal concluded that there was "no more than speculation" as to what might have happened had the company not been struck off and it was not possible to conclude that the claimant might well have issued proceedings.