This article looks at cases where negligence or other liability is admitted before the case gets underway but the claimant starts proceedings out of time. Should the defendant ask the court to strike out the claim, or would it be wiser to save themselves the costs of such an application, given the court’s discretionary power to disapply the time bar under the Limitation Act 1980?

How the time limit works

Section 11 of the Limitation Act 1980 says that claimants who suffer personal injury have three years from the date of the negligence to issue their claim. Defendant solicitors will always make a clear file note of the moment when the limitation period expires. If the claimant brings a claim outside this period, then the defendant can rely on a defence of limitation and ask the court to strike out the claim.

However, under section 33 of the Act, the court has a discretion to disapply the section 11 time bar if it thinks it would be “equitable” to allow the claimant’s claim to proceed.

Section 33 (3) sets out the various factors a judge should consider when deciding whether or not to exercise that discretion. These include:

  • the length of the delay in bringing the claim;
  • the reason for the delay;
  • the conduct of the defendant;
  • the duration of any disability suffered by the claimant following the accident;
  • the extent to which the claimant acted promptly in instigating a claim;
  • the steps taken by the claimant to obtain medical, legal and expert advice; and
  • the nature of any such advice received.

Two critical court decisions

Cain v Francis and McKay v Hamlani and Direct Line (18 December 2008) were two combined appeals, each involving personal injury claims arising from road traffic accidents. In both cases, the defendants were notified promptly of the claims. Liability was not in dispute and interim payments were made. However, final settlement was delayed in order to await medical developments. In both cases, the primary limitation periods were missed through the negligence of the claimants’ solicitors. The defendants served a limitation defence.

While the claims were factually similar, the trial judge in each case reached entirely different conclusions. Mr Cain was one day late issuing proceedings, yet the judge still refused to extend the limitation period. In the McKay case, on the other hand, the claimant delayed issuing proceedings by a year but the judge exercised his discretion under section 33 to disapply the limitation period. The Court of Appeal allowed Mr Cain’s appeal but dismissed Direct Line’s appeal in the McKay case, i.e. both cases were allowed to proceed.

The Court of Appeal’s reasoning

The Court of Appeal said that judges need to consider whether “it would be equitable to allow the claim to proceed”. A primary concern for the court will be to consider the extent to which the delay has (1) prejudiced the defendant’s investigation of the claim, both in terms of liability and quantum, and (2) impacted on the defendant’s ability to defend the claim made against them. The court will look to see if the defendant has suffered any evidential or forensic prejudice due to the delay.

Up until now, many defendants have assumed that they can readily argue that, by its very operation, section 33 prejudices defendants because of the financial consequences of any judicial decision to disapply the time bar. However, the Court of Appeal has now concluded that this form of loss is not the type of prejudice that parliament had in mind when it enacted section 33.

Practical implications

Following on from the Cain and McKay decisions, it seems almost inevitable that, in a case where negligence or other liability has been accepted and proceedings have been issued after the expiry of the limitation period, the court will now exercise its discretion under section 33 to allow the claim to run. This is because the defendant will not be able to argue with any conviction that it has suffered evidential or forensic prejudice as a result of the delay.

Therefore, in cases where negligence or other liability is conceded and the claimant issues proceedings outside the limitation period, the defendant and its lawyers need to make an important decision. Before applying to strike out the claim, they should assess the degree of prejudice they have suffered as a result of the late start to proceedings, and then decide whether a judge will think it is sufficiently severe to strike out the claim.