Certainty Restored in Professional Negligence Claims

Profession:Herbert Smith
 
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Having been exposed to virtually indefinite limitation periods in respect of negligence claims by virtue of Brocklesby, interpretation of the Limitation Act has now been clarified following the House of Lords' decision in Cave v. Robinson Jarvis & Rolf [2002] UKHL 18. In Cave, the House of Lords overruled an English Court of Appeal decision, Brocklesby v. Armitage & Guest [2001] 1 All ER 172, which had the effect of undermining the viability of a limitation defence in many professional negligence cases by extending the meaning of the expression "deliberate concealment" in Section 32(1)(b) Limitation Act 1980, a provision which is mirrored by Section 26(1)(b) of the Hong Kong Limitation Ordinance.

Cave has re-established the position that a professional who has acted conscientiously and in good faith in attempting to perform an obligation, should not be faced with the statutory time limitations applicable to cases of deliberate concealment. This obviously good news for professionals and their insurers.

Limitation problems - section 26(1)(b) Limitation Ordinance

Section 26 of the Limitation Ordinance governs the postponement of the commencement of the limitation period in cases of fraud, concealment or mistake. S.26(1)(6) provides:

Where "any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendantthe period of limitation shall not begin to run until the plaintiff has discovered the fraud concealment or mistake (as the case may be) or could with reasonable diligence, have discovered it."

S.26(3) provides that:

"For the purposes of subsection (1), 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."

In Brocklesby, which concerned a solicitor's failure to ensure release from liabilities under a mortgage, it was held by the English Court of Appeal that "deliberate commission of a breach of duty" occurred where:

"the commission of the act was deliberate in the sense of being intentional and that act or omission, as the case may be, did involve a breach of duty whether or not the actor appreciated that legal consequence."

Prior to Brocklesby, it was assumed that where a professional acted in breach of duty, but did not act culpably in concealing the breach from his client, the commencement of the limitation period would, pursuant to S.31 of the Ordinance...

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