UK: Cave v. Robinson

Last Updated: 11 October 2002

It is a well known legal principle that a claimant must issue proceedings within a certain period of time or face the prospect of being denied a remedy. The public policy behind this principle is obvious, namely a potential defendant should not have to suffer indefinitely the prospect of having a stale claim being brought against it.

It is not the intention of this article to recite the basic principles of limitation law. There are two good reasons for this. First, that has been done many times before and in significantly more detail than is possible in this publication. Second, the statute governing limitation in English law, the Limitation Act 1980 (the Act), looks set for an overhaul in the light of the Law Commission’s recent proposals for reform published in July 2001 which the Government announced were accepted in principle on 16 July 2002.

Having said that, however, one particular aspect of the law on limitation has recently been the subject of much debate in the light of recent court decisions, namely where the defendant has been guilty of "deliberate concealment" of facts relevant to the claim. Given the significance of how the Courts interpret statutory provisions relating to deliberate concealment, whether under the current regime or under any new legislation which may be introduced, this article focuses on the recent decisions of Brocklesby v. Armitage & Guest [2001] 1 All ER 172 and Cave v. Robinson Jarvis & Rolf [2002] UKHL 18.

"Deliberate concealment"

The starting point is to observe that different rules apply in circumstances where the defendant’s own conduct has contributed to the length of time it has taken the claimant to get his claim off the ground. This rule applies equally to the Act and its proposed replacement.

Section 32 (1) of the Act states that where any fact relevant to the claimant’s right of action has been deliberately concealed from him by the defendant, the period of limitation shall not begin to run until the claimant has, or with reasonable diligence could have, discovered the concealment.

Section 32 (2) states that for the purposes of Section 32 (1) the deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to "deliberate concealment" of the facts involved in that breach of duty.

Brocklesby

Without going into the details of the factual background, the Court of Appeal in Brocklesby interpreted the words "deliberate commission of a breach of duty" to mean that where an act was committed deliberately, if it also involved the commission of a breach of duty, then the criteria for what constituted "deliberate concealment" for the purposes of Section 32 (2) were met. This was so even if the person doing the act did not know that they were committing a breach of duty. Since it is hard to conceive of many circumstances where a professional does an act which is not deliberate (in the sense that they do not know they are doing it), the effect of the ruling was that the limitation defence was no longer available in most cases brought against professionals for breach of duty.

The statutory interpretation as laid down in Brocklesby ran contrary to most practitioners’ understanding of the meaning of Section 32 (2). Not surprisingly, it was the cause of much concern not only for professionals but also their indemnity insurers. Even the circumstances of the Brocklesby judgment were unsatisfactory. The Judgment was given by a two man Court of Appeal rather than three and it was given extempore at the end of a hearing on a Friday afternoon. To make matters worse, the Court of Appeal’s unconventional construction of Section 32 (2) was not necessary for its decision in any event since it was made clear that the Court would still not have struck out the claim (which was really what Brocklesby was all about anyway). Leave to appeal to the House of Lords was refused and, thus, the decision stood.

Brocklesby was subsequently followed by the lower courts which considered themselves bound by it. For instance, in Liverpool Roman Catholic Archdiocese v. Goldberg [2001] 1 All ER 182 Laddie J said that Section 32 (2) treated the intentional commission of a breach of duty which is unlikely to be discovered in the same way as if it were a deliberate concealment of the facts. Accordingly, in the Judge’s view, even if the claimant were aware at all times of all the facts giving rise to a cause of action, the intentional commission of a breach of duty in circumstances where that breach was unlikely to be discovered, created a legal fiction whereby the facts are unknown. According to that reasoning, the limitation period would only begin to run once the claimant had discovered that there was a breach of duty.

Further, in the case of Gold v. Mincoff Science & Gold [2001] Lloyd’s Rep PN 423, Neuberger J held that the claimant’s claim against his solicitors arising out of a property investment secured by mortgage was not statute barred. In so holding, reliance was placed on the decision in Brocklesby, although it should be noted that the Judge held that any limitation defence would have failed on other grounds anyway.

Cave

This unsatisfactory state of affairs was not resolved until the case of Cave v. Robinson went all the way to the House of Lords.

The facts of Cave were relatively straightforward. The defendants, a firm of solicitors, were instructed in connection with a sale of land and were specifically retained to draw up legal documentation to enable the claimant to enjoy mooring rights enforceable against the whole world for 100 years. The sale went ahead in March 1989 and the claimant enjoyed mooring rights for several years until he was denied by the receivers of the purchasing company in February 1994. However, proceedings were not issued against the firm of solicitors (for negligently failing to ensure the mooring rights were enforceable) until January 1998. Both at first instance and in the Court of Appeal, the decision in Brocklesby was followed. Even though it was not alleged that the defendants knew they had committed a breach of duty, it was held that there had been a deliberate concealment for the purposes of Section 32 (2). Thus, it was held that the limitation period did not begin to run until February 1994, when the claimant discovered, or could with reasonable diligence have discovered, the breach (namely when the mooring rights were denied), rather than March 1989, when the relevant transactions took place.

A unanimous House of Lords, whose leading judgments were delivered by Lords Millett and Scott, allowed the solicitors’ appeal and overturned the judgments of the lower courts.

Lord Millett put the question thus: whether the words "deliberate commission of a breach of duty" in Section 32 (2) mean "deliberate commission of an act or omission which gives rise to a breach of duty" or whether they simply mean "deliberate breach of duty". He came down firmly in favour of the latter. His reasoning was clear. In his view, Section 32 deprived a defendant of a limitation defence in two cases. First, where he takes active steps to conceal his own breach of duty after he has become aware of it. Second, where he is guilty of deliberate wrongdoing and conceals or fails to disclose it in circumstances where it is unlikely to be discovered for some time. Lord Millett gave an illuminating example of the anomalies which would flow from the Brocklesby decision. If it were correct, he said, then a surgeon who negligently leaves a swab in a patient’s stomach, but does not realise he has done so, can plead a limitation defence. By contrast, a solicitor who gives negligent advice cannot rely on a limitation defence. This is because it cannot be said that the solicitor does not know the advice he has given. In Lord Millett’s view, there was no sensible basis for such a distinction.

Lord Scott also held that the construction of Section 32 (2) adopted in Brocklesby was wrong. The relevant words in Section 32 (2) were in his view "clear words of English". The deliberate commission of a breach of duty was to be contrasted with a commission of a breach of duty which is not deliberate, inadvertent or accidental. The choice of words was not important because in each case it would exclude a breach of duty that the performer was not aware he was committing.

Comment

The decision of the House of Lords in Cave was particularly well received by the insurance industry and the professionals they insure. Whilst Brocklesby remained the last word on the subject, professional organisations faced uncertainty as to their exposures and had to contemplate a radical re-think of their document retention and destructions policies. If some claims might never be statute barred, there was a case for saying that absolutely every document relating to the business had to be stored indefinitely, no doubt at great cost, simply on the off chance that a claim may be brought many years down the line. Further, for those nearing retirement or for those already in it, there was the prospect that run-off cover in respect of claims arising within six years of retirement might not afford sufficient protection and that additional cover would be needed. In the light of Cave, now that certainty (and, it must be said, common sense) has been restored, neither of these scenarios are likely to arise and risk management procedures can be effectively managed.

Under the Law Commission’s proposals for reform, "concealment" would only apply where the defendant has been guilty of unconscionable conduct or, in other words, dishonesty. That would put an end once and for all to the debate in respect of the current legislation as to whether Section 32 (2) extends to reckless concealment. A person would not be considered to be dishonest for the purposes of the new provisions unless the person concealing the fact is aware of what is being concealed and does not wish the claimant to discover it. Going back to Lord Millet’s example, on this basis a solicitor who has given negligent advice but is not aware of having done so cannot be said to have "dishonestly concealed" anything, even if the claimant does not discover for some time that the advice was negligent. That must surely be right.

© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

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