The Law Society has won a House of Lords victory which allows it to pursue its fight against an accountancy firm accused of negligence.
Yesterday morning (10 May) the Lords ruled that the society is able to bring its case against Sephton & Co despite having filed the claim 14 years after the actions under dispute took place – outside the standard six-year limitation period.
The Law Society filed its negligence and fraud claim against Sephtons in 2002, alleging that a partner in the firm had failed to properly examine the accounts of solicitors’ firm Payne & Co between 1989 and 1995.
Paynes’ name partner Andrew Payne was struck off the roll and was imprisoned for misappropriating more than £750,000 from clients’ accounts. The Law Society brought the case against Sephtons for recovery of funds repaid from the Solicitors’ Compensation Fund.
In February 2004, Michael Briggs QC, sitting as a deputy High Court judge, dismissed the Law Society’s case because he said it had exceeded the limitation period.
But the Court of Appeal disagreed in December 2004, prompting Sephtons’ appeal to the Lords, which was dismissed today.
Barlow Lyde & Gilbert partner Stuart Hall, advising Sephtons, said: “Whilst this decision does not fundamentally alter the landscape, it is certainly a timely reminder that the headline six year period of limitation does not always mean only six years in practice.”
A Law Society spokesperson said: “At first sight this surely a highly satisfactory outcome which provides useful clarification. However we need to consider the judgment in detail before taking a view on its longer term significance.”
The Law Society, instructed regular advisers Wright Son & Pepper and Fountain Court Chambers’ Timothy Dutton QC. Hall instructed Hailsham Chambers’ Michael Pooles QC for Sephtons.