Lords kills time-bar limitations

The debate of 'to shred or not to shred', sparked by Andersen's role in the Enron debacle and the recent criticisms of lawyers in Australian tobacco litigation, reared its head in a House of Lords case last month

In Cave v Robinson Jarvis & Rolf, the Law Lords overturned a ruling last year that restricted the ability of lawyers to rely on time-bar limitation defences in professional negligence cases.
Clifford Chance litigation partner Jeremy Kosky said law firms are guided chiefly by the time limits for bringing claims under the Limitation Act 1980 “on the assumption that, once potential claims by a client are time-barred, it is safe to destroy documents relating to that client”.
But Kosky, who studied policies on document shredding as part of an MA in advanced litigation, said these time limits “extend to 15 years in certain circumstances, and in other circumstances they don't start to run if the facts giving rise to a claim are 'deliberately concealed'”.
But now the House of Lords has clarified the law. “Deliberate concealment is once again confined to where a defendant takes active steps to conceal his breach of duty after he's become aware of it, or where he's guilty of a deliberate breach of duty and concealed or failed to disclose it in circumstances where it was unlikely to be discovered for some time,” said Kosky.
Kosky added: “Unless overturned on appeal, this case is likely to lead to many companies having to rewrite their document retention policies.”
In McCabe, an Australian judge threw out British American Tobacco's defence, claiming that its “deliberate obliteration” of internal documents had prejudiced the case. Clayton Utz was also criticised in the judgment.