The time bar is a complex area of law in Scotland that relates to the time within which a claim for breach can be made. Although the Prescription Act 2018 was passed by the Scottish government, it is still not in force.
The harsh reality of time bar for claimants was brought back by the recent Inner House decision in WPH Developments Limited v Young & Gault LLP
What is time bar under Scots law?
In its simplest form, a person cannot bring an action against another person for a breach or duty within five years of the date of the breach.
This is not the only exception. The five-year period does not begin if the person didn’t know or could not reasonably have known they had suffered a loss.
This means that a person can commence an action within five years of the date they should or knew they had suffered a loss.
This raises the crucial question: When can it be said that someone knew or should have known that they had suffered a loss. This was again the subject before the Court of Session WPH Developments.
Developer disputes time bar rules
The case involved a property developer who brought proceedings against architects for negligent services. This resulted in the construction of walls on its own land.
It suffered a loss of approximately PS300,000. This was due to the fact that it had to move the walls it had constructed and pay legal fees. In Sheriff Court, the architects argued that the claim of the developer was not time-barred.
The sheriff ruled that the action was not barred by time. The sheriff found that the developer knew of the loss and negligence more than five year before the court case began. However, the developer had only known about the loss for less than five-years before the court case began.
This decision was appealed by the architect. The sheriff failed to follow the law in binding Supreme Court decisions earlier. If he had done so, the action would have been premature.
The developer disagreed. The developer disagreed. It stated that simply having spent money due to a wrongful act doesn’t automatically mean you are aware of the loss.
The developer claimed that the architect’s negligence caused it to spend money on relocation and legal fees. This was five years prior to the start of the court case.
It also pointed out that in order to be considered a loss, money must not have been wasted considering the disadvantages that the party suffered.
This means that if the victim of a wrongful act has spent money, it is only a loss and the clock starts to run for bringing a case.
This is how the developer argued that the costs of building the walls again (which took place over five years prior to the start of the court case) would have been covered even if the architect had given the right advice.
There was therefore no loss at that time and the payment could not have been used to start the period for the time bar.
The developer was unsuccessful. According to the Inner House, the Supreme Court had already established that the claim could not be filed if the law was applied.
They refuted the argument that the claimant must wait five years before he or she can start a case. This is because a claimant knows they have suffered a loss that has made them poorer or more vulnerable. It does not matter if the claimant did not receive what they sought or incurred an expense.
The Inner House discovered that the intrusion onto the neighboring land (i.e. The Inner House found that the developer was legally liable to remove the intrusion on the neighbouring land as soon as it occurred (i.e., building the walls). It was also liable for the cost of the wall construction.
What does the judgement mean for time bar claims
For those who have claims to pursue, the decision can be difficult. The law can be beneficial for people who are exposed to claims.
The Prescription Act 2018 was passed by the Scottish government to reform the law. This Act aims to give more time to claimants.
The new act is currently inactive. If you wish to preserve your claims, it is important that those who have claims to pursue get early legal advice.