First instance judges have rejected claimants’ attempts to defeat limitation arguments by postponing the accrual of their cause of action in two cases since the Court of Appeal’s decision in the summer in Shore v Sedgwick Financial Services. In Shore the Court of Appeal made it clear that Law Society v Sephton was a case on its own unusual facts and should not be relied upon generally to postpone the accrual of causes of action in professional negligence claims. The court also noted that the House of Lords’ decision in Nykredit Plc v Edward Erdman Ltd is of limited application even in over-valuation claims.
The recent cases were Pegasus v Ernst & Young, which concerned negligent tax advice leading to the purchase of shares in the wrong type of company, and Pickthall v Hill Dickinson concerning negligent legal advice and the drafting of a share sale agreement. In both, the court held that the claimants could not rely on Sephton and Nykredit to avoid the cause of action accruing at the date the transaction was entered into.