Melinda Parisotti in her recent article ("Decent proposals", 17 May) referred to various proposals by the Law Commission to amend the current rules on limitation. If and when such changes are implemented (which, even optimistically, will not happen until after the next general election), new legislation will still leave open the serious loophole relating to "deliberate concealment".
For many years, the laws on limitation have dictated that most court actions and arbitrations must be started within six years of the right to sue arising (or 12 years in the case of contracts under seal). The Limitation Act 1980 introduced an exception to this rule whereby, in cases of negligence, one could sue later than the six-year period, within three years from the time when damage or injury was discovered or reasonably discoverable; there was a long stop of 15 years from the date of the original negligent behaviour.
That law also introduced the notion that where any fact relevant to the claimant's right of action had been deliberately concealed by the defendant, the limitation period would not run until the claimant discovered, or could reasonably have discovered, the concealment. For there to be deliberate concealment, there has to be the "deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time" (see Section 32(2)).
This replaced the old law relating to "fraudulent concealment". In Cave v Robinson Jarvis & Rolf (25 April 2002), the House of Lords decided that deliberate concealment applied where a defendant takes active steps to conceal his own breach of duty after becoming aware of it, and where he deliberately and consciously commits a breach of duty and conceals it, or fails to disclose it, in circumstances where it is unlikely to be discovered for some time.
The next Limitation Bill should introduce a fairer and less exacting definition of deliberate concealment
In broad terms, the idea of deliberate concealment as an excuse to postpone the running of limitation is perfectly fair and reasonable. However, in the context of construction, it could have the effect of extending limitation almost indefinitely. An obvious example is a defective concrete slab where the edge is intentionally concealed by facing brickwork. The concrete slab may have been constructed fractionally over tolerance in length; the edge which is to be covered by brickwork is then hacked to enable the facing brickwork to be constructed vertically; the hacking is done deliberately and it may well leave the reinforcement in the slab with inadequate cover. The bricklayer wants to construct his wall vertically. There has then been deliberate concealment by the contractor as a whole because someone knew that (a) the slab had been hacked, (b) it was left with inadequate cover and (c) it was being covered up by the brickwork.
The problem for builders is that, because they are mostly limited companies, they are vicariously liable for their employees. Although often no individual employee will be guilty of deliberate concealment, collectively the criteria for establishing a deliberate concealment are established if the requisite acts and knowledge are those of individual employees. In reality most defects remaining within a building that are not found out will often have been concealed, often necessarily as part of the design.
What then is the solution? First, the next Limitation Bill should reflect the reality at least with regard to construction. A fairer and less exacting definition of deliberate concealment should be introduced. The second answer might well be the general introduction of decennial insurance. In Europe decennial insurance is the norm. It enables all parties (but principally the end-user) to have recourse to an insurance which covers all defects both in construction and in design. This would introduce a no-fault concept and would give the end-user an important security.
Limitation is a "good thing": it is in the public interest that the person with a good cause of action should pursue it promptly. That public interest should be maintained by a proper definition which prevents the possible extension of limitation period ad infinitum.
Robert Akenhead QC is a barrister specialising in construction law at Atkin Chambers and joint editor of Building Law Reports.