Lords ruling extends time limits for concealment

A MILESTONE decision by the House of Lords could have a major impact on litigation, allowing the statutory limitation period of six years to be extended where defendants have deliberately concealed information that would be a cause of action.

The case relates to a Lloyd's of London negligence action being taken against the RHM Outhwaite syndicate.

In interpreting legislation in the Limitation Act 1980, the Lords ruled that, where a deliberate act of concealment has taken place, a litigant's right to sue can be extended to give them up to another six years' period to run from the date they discover the concealment.

Denton Hall partner Kevin Ryan, who is acting for the syndicate, says lawyers must study the judgement carefully.

"This judgement has strong repercussions for advisers such as accountants, solicitors, surveyors and those in financial services, who give advice on issues or in areas where a cause of action may take a long time to arise and may easily be concealed, so that a plaintiff becomes aware of it only outside the statutory six-year period. This is a milestone decision."

Lovell White Durrant litigation partner Michael Seymour, president of the London Solicitors Litigation Association, comments: "I certainly agree that it's an important decision for litigators, and it will have to be studied carefully."

The action was brought by 500 Lloyd's names. Their claim, in respect of losses on the Lloyd's 1982 year of account, was outside the primary limitation period.

To overcome this, the Names wanted to rely on a provision of the Limitation Act 1980 by alleging that the defendants had deliberately concealed their own breaches of duty, denying the Names of the knowledge of their right to sue.