In our previous Law Now "Limitation in Professional Negligence Claims" we explained how the courts are increasingly finding that professional negligence claims will become time-barred 6 years after the date of advice, regardless of whether the claim is made in contract or tort.

The Court of Appeal has now confirmed this trend and has expressly recognised that the limitation periods in tort and contract ought broadly to be the same where a claim is essentially contractual in nature.

A professional's relationship with his or her client is usually contractual in nature. However, professional negligence claims tend to be made both in contract and in tort. Often this is done because the limitation period allowed for claims in negligence is perceived to be more generous than for those in contract.

For claims in contract, limitation will run from the date the contract is breached by the provision of negligent advice. However, limitation for claims in tort will not begin to run until the claimant first suffers damage as a consequence of the negligent advice. Claimants often use this to their advantage by asserting that they did not suffer damage until long after they received negligent advice, effectively allowing them more time to bring a claim.

Yet the clear weight of case law, to which the Court of Appeal's recent decision can now be added, shows that claimants very rarely succeed with this argument.

Indeed, the Court of Appeal emphasised that in cases of negligent advice the person relying on the advice will usually have entered into a transaction of some kind which has turned out to be flawed in some way. The fact that the flawed transaction has been entered into will usually be damage from the claimant's point of view, meaning that the limitation period in tort begins to run at that point not at some later date when a more tangible loss manifests itself.

Of course, a remaining potential advantage of negligence claims in tort is that the claimant can benefit from an alternative 3-year limitation period running from the date they first acquired knowledge of their potential claim. However, the case law on this issue is also relatively strict on claimants and only allows them 3 years to investigate whether they might have a claim against a professional rather than allowing them 3 years to issue a claim once they have confirmed the existence of such a claim. ( Click here to see our Law Now on the leading case on this issue.)

Accordingly, professionals and their insurers can increasingly expect to avoid claims for advice given more than 6 years ago and claimants who delay in issuing their claims run a real risk of being time-barred.

Further reading:

Axa Insurance Limited -v- Akther & Darby Solicitors & Others [2009] EWCA Civ 1166

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 24/11/2009.