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Changes to Scottish prescription law may cause ‘uptick in litigation’

Out-Law News | 09 Mar 2022 | 2:52 pm | 2 min. read

Changes to the rules around making claims for loss or damage in Scotland may lead to an increase in claims, according to one legal expert.

It comes after the Scottish government laid the implementation regulations for the 2018 Prescription (Scotland) Act before the Scottish parliament last month. The Act states that the countdown on the time limit for a claim will only start when the individual pursuing the claim (the 'pursuer') is aware that loss injury or damage has occurred, that it was caused by a person’s act or omission, and the identity of that a person - effectively changing the law so that it closer to the stance historically taken by Scottish courts.

Previous rulings, such as in the 2021 WPH Developments Limited case, substantially curtailed the situations where a lack of knowledge would delay the start of the countdown. In that case, the court ruled that the countdown for a property developer to bring a claim for £300,000 in damages against architecture firm WPH Developments for incorrectly plotted drawings started when it paid for the documents in 2012. The court said that, under section 11 of the 1973 Prescription and Limitation (Scotland) Act, it was not necessary for the developer to become aware that the drawings were faulty – as it had in 2014 – for the countdown to begin. It meant the claim against the architect was out of time.

Mitchell Abbott, litigation expert at Pinsent Masons, said the changes to when the prescription clock begins to run are “particularly important for litigants” because they “aim to rebalance the interests of pursuers and defendants – which had been tilted in favour of defendants by a series of court decisions beginning in 2014.”

“Those decisions, including in WPH Developments, meant that the prescription clock often started to run before a party was even aware that they had suffered loss - or knew the identity of the person who had caused it. Often, pursuers had little to no opportunity to make their claim before it prescribed,” he added.

The Act will also allow parties to litigation in Scotland to extend the time limit for making a claim, known as the ‘prescriptive period’, from five years to six, subject to agreement. It is already possible for parties to agree to extend a limitation period in English law, with even greater flexibility over the length of the extension. Both of the changes to the time limit for bringing claims and standstill agreements detailed in the 2018 Act are set to come into force in June this year, with the remainder of the Act to be implemented on 28 February 2025.

Mitchell said: “The short timeframe for the introduction of these two key reforms is surprising given that the Scottish government’s 2020 consultation envisaged all of the changes being implemented three years after the passing of the regulations. Disputing parties and regular litigants should now consider the 2018 Act carefully. From 1 June 2022, defenders will find it harder to argue that claims have been made out of time and we may see an uptick in litigation because of this.”

“Importantly, the regulations provide that the 2018 Act’s changes will not “re-awaken” prescribed claims; if a claim has prescribed prior to the date the relevant provision comes into force, it will remain prescribed. Additionally, where the changes to the 2018 Act mean that a claim will retrospectively prescribe, pursuers will be permitted to bring those claims up to the date prior to the implementation of the relevant provisions. This will allow litigants sufficient time to organise their affairs prior to the introduction of the 2018 Act’s changes,” Abbott said.

He added: “Certain pursuers may now have additional time to advance some of their claims currently under preparation, and others will need to take action prior to 28 February 2025 to make their claims in time.”