In litigation, it is crucial to think about limitation periods and to be aware that there is an ultimate deadline by which you can bring a claim before it is time-barred.
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What is a limitation period?
The law sets out deadlines for bringing legal claims, which are referred to as limitation periods. The purpose of limitation periods is to prevent legal claims from being brought too long after the cause of action accrued. The length of the limitation period varies with different types of legal claim.
Why is limitation in litigation important?
Limitation is not something that should be ignored. Where a party has a strong case, but the limitation period has expired, the claim will be likely to fail. Even in unusual circumstances, where a party is prevented from issuing its claim in time for reasons beyond its control, the court has no discretion to extend the limitation period in this type of claim. It is, therefore, crucial that limitation issues are considered at the outset of any potential claims.
When does time start running on a claim?
Once the cause of action has accrued, the time for bringing a legal claim will start to run and the limitation period will begin. In order to stop time running before the expiration of the limitation period in relation to a particular cause of action, you would need to either issue a claim form at Court or enter into a standstill agreement with your opponent.
What happens after the limitation period expires in litigation?
If the limitation period expires before you have issued a claim form or entered into a standstill agreement, then your claim will be time-barred. This means that if you begin your legal claim after the limitation period has expired, the defendant will be able to raise limitation as a complete defence to your claim (regardless of how strong a claim it may otherwise be).
Defendant options in defending a claim brought after the expiration of the limitation period
A Defendant could raise limitation in its defence in one of several ways:
- It could apply under the Civil Procedure Rules (which govern the conduct of civil litigation) to have your claim struck out as disclosing no cause of action.
- It could file and serve its defence and then seek (usually at the Costs and Case Management Conference) to have the limitation point tried as a preliminary issue, with a view to obtaining summary judgment under CPR 24.
- It could allow the claim to take its ordinary course, reserving the limitation defence until the full trial.
What is a standstill agreement?
This is a method by which time can be extended by agreement between the parties before the limitation period expires. You can protect your position by entering into a standstill agreement with all the parties to the relevant claim. In practical terms, the action will “stand still” and no party to the agreement can complain to the court about the other party’s inactivity in the claim.
Should I enter into a standstill agreement?
The standstill agreement stops time running for the purposes of limitation, and therefore prevents the limitation period from expiring (usually only temporarily). It may also give you time to pursue settlement negotiations with your opponent, without needing to issue proceedings to protect the limitation position. It thereby avoids the time and costs associated with issuing a claim, but potentially alerts the other parties that you may actually issue legal proceedings. In any case, proceedings should only be issued if you can properly particularise the claim.
Can a limitation period be extended?
In certain circumstances, a limitation period can be extended in the following ways.
Date of knowledge
Section 14 of the Limitation Act 1980 provides for two alternative start dates for negligence claims:
(1) 6 years from the date the cause of action accrues i.e. when the damage occurs; or
(2) 3 years from the “earliest date on which the Claimant had both the knowledge required for bringing an claim for damages in respect of the relevant damage and a right to bring such a claim.
For the reasons above, it is vital to seek legal advice as soon as you become aware of a potential claim you have against a Defendant.
Section 32 of the Limitation Act 1980 states that “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the Defendant” the 6 year period for bringing a claim does not start until the Claimant has discovered the concealment, or could have done so with reasonable diligence.
The term “deliberate” means that the fact has been concealed by a positive act of concealment or omission or withholding of relevant information.
This means the Defendant must have known that he acted in breach of duty before he can be accused of deliberate concealment. This is a difficult hurdle to overcome and it is important you seek specialist legal advice on the same.
Our team of carefully selected solicitors and barristers, specialising in financial services litigation and professional negligence have advised many clients in deliberate concealment cases against well known financial institutions in relation to mis-selling of complex financial products.
Section 32(1)(c) provides for the limitation period to be extended where the action being brought “is based upon the fraud of the defendant”.
The period of limitation shall not begin to run until the Claimant has discovered the fraud or could with reasonable diligence have discovered it
Section 32(1)(c) provides for the limitation period to be extended where the action being brought “is for relief from the consequences of a mistake“.
the period of limitation shall not begin to run until the Claimant has discovered the mistake (as the case may be) or could with reasonable diligence have discovered it
Time limits in Litigation
Breach of Contract Limitation Date
6 years from the date the cause of action accrued (section 5 of the Limitation Act 1980)
Professional Negligence Limitation Date
If based on contract, 6 years from the date of the breach of contract (section 5 of the Limitation Act 1980)
If based on the common law tort of negligence, 6 years from the date the Claimant suffered a financial loss as a result of a negligent professional (section 2 of the Limitation Act 1980)
Assessment of a Solicitor’s Invoice Limitation Date
This time limit is extended to 12 months if special circumstances exist as to why you didn’t challenge the bill within a month (Section 70 Solicitors Act)
HMRC Tax Penalty Limitation Date
If you have received a penalty, unless otherwise stated you must appeal, within 30 days of the date of the penalty notice.
HMRC operate very strict time limits and you may lose your right to challenge a penalty with HMRC or in the Tribunal if you submit an appeal out of time.
Our tax team can advise on challenges to HMRC and appeals in the Tax Tribunal.
Judicial Review Limitation Date
The claim form must be filed promptly and in any event not later than 3 months after the ground to make the claim first arose (CPR 54.4(1))
It is important to check time limits carefully as there are shorter time limits for claims such as certain planning judicial review decisions need to be commenced within 6 weeks and procurement decisions within 30 days (CPR 54.5)
Enforcing Judgments Limitation Date
6 years from the date on which the judgment became enforceable (Section 24 of the Limitation Act 1980)
Property Litigation Limitation Dates
Action to recover land: 12 years from the date the cause of action accrued (Section 15 of the Limitation Act 1980)
Action to recover rent: 6 years from the date the rent arrears became due (Section 19 of the Limitation Act 1980)
Action to recover proceeds of sale of land: 12 years from the date the right to receive the money accrued (Section 20 Limitation Act 1980)
If you have a landlord-tenant dispute or a complaint against an individual or firm who advised you in a property transaction, our property litigation team can assist.
Employment Law Limitation Dates
Employee’s contract claim: 3 months from the effective date of termination (Employment Tribunals Extension of Jurisdiction Order 1994)
Unfair Dismissal: 3 months from the effective date of termination or if there is no termination, the last day on which the employee worked (Section 111 Employment Rights Act 1996)
Discrimination and victimisation: 3 months starting with the date of the act to which the complaint relates or such other period as the Employment Tribunal thinks is “just and equitable” (section 123 Equality Act 2010)
If you have been unfairly dismissed, discriminated against in the workplace or have any other dispute against your employer and would like advice on bringing a claim in the Employment Tribunal, our employment team can assist.
Defamation Limitation Date
1 year from the date of the defamatory publication or when the claimant became aware of the publication of the defamatory statement (Section 4A Limitation Act 1980)
Where material is online, and continues to be published online, the time will start to run from the date the material was first published.
My solicitor failed to advise me about time limits
It is crucial for practitioners to consider limitation issues as soon as instructed in order to prevent the possibility of a claim being time-barred.
If you have been inadequately or negligently advised by a solicitor, barrister or any other professional adviser in relation to a potential claim, then you may be able to recover any losses in a claim for professional negligence against the firm or individual providing the advice.
Our professional negligence team can assist by assessing your case and advising you on the next steps.
Instructing our Litigation Lawyers
We ensure that we provide the best possible outcome for our clients by conducting in depth investigation and research into the realistic prospects of a case before selecting the appropriate course of action in order to reduce time and expense. Liability for costs is always an issue in litigation and based on our extensive litigation experience we provide our clients with as much strategic, practical as well as carefully considered legal advice in order to ensure minimum risk in respect of costs. Where appropriate we encourage the use of alternative dispute resolution (such as mediation and without prejudice negotiation) and our lawyer’s negotiation skills are first class. If early settlement at advantageous terms is not possible, we are extremely experienced and capable at navigating our clients through the litigation process.