A client has failed in a bid to sue her negligent solicitor as she started the claim after the expiry of the six-year limitation period. The case serves as a reminder of the efficacy of limitation as a defence, and that the date on which the claimant’s loss occurs may not be as straightforward as it first appears.
The claimant, Mrs E, had instructed her solicitors to draw up an underlease on her husband’s property, which she intended to let to a tenant. The solicitor made two mistakes in drafting the lease; it failed to include required guarantees in the lease and it failed to tell her to insure the property as required in the lease.
The Appeal judges ruled that the limitation period in tort started when the ‘flawed transaction’ was completed – in this case the execution of the underlease.
The underlease was executed on 24 February 2012. Mrs E did not insure the property, but later that year on 6 November 2012 it burned down. On 10 April 2018 Mrs E issued proceedings against her solicitors for negligence, claiming damages for the cost of rebuilding the house and lost rental income.
The solicitor admitted negligence, but immediately argued that the claim was time-barred under the Limitation Act. In the High Court, the judge ruled that the claim would be allowed, saying the cause of action started in November 2012 when the property was destroyed. However at Appeal the judges reversed the lower court’s decision and ruled that the cause of action started in February 2012 when the sub-lease was executed.
The Appeal judges ruled that the limitation period in tort started when the ‘flawed transaction’ was completed – in this case the execution of the underlease. They ruled that Mrs E suffered a loss at that point – as her lease was less valuable than it would have been had it contained clauses about the guarantees and had she fulfilled her insurance requirements.
James Burgoyne of Brunel Professions said: “Identifying when a cause of action starts in tort can be tricky, whether for claimants or defendants, and when a court analyses the facts closely, the results can sometimes be surprising. The solicitors in this case had a fortunate escape – if Mrs E started her claim just a few months earlier, it appears likely that she would have been successful.”