A recent House of Lords’ ruling has overturned 27 years of legal precedent on limitation periods in personal injury claims. The judgment, which was reached in the case of Horton v Sadler, offers a lifeline to claimants trapped by the strict rules on claim time limits.
The case involved a road traffic accident, which occurred in April 1998. In the accident, Mr Horton was injured and Mr Sadler, who was uninsured, admitted liability. A claim was made against the Motor Insurers' Bureau (MIB) for compensation for Mr Horton’s injuries. The MIB made an interim payment to him of £3,675, but then discovered a legal loophole with the claim.
Many claims have limiting time periods within which actions must be brought; in the case of personal injury claims, the limit is three years. Mr Horton's solicitors brought an action against Mr Sadler two days before that period was due to expire. Unfortunately, one of the technicalities of instigating the claim –
giving notice – was not adhered to, so the claim was issued again, but this time outside the limitation period. The first claim was irretrievable but the MIB defended the second claim on the basis that it was made outside the limitation period.
The court then had to decide whether it had discretion under the Limitation Act 1980 to override the time limit and allow the claim anyway. Since 1979, similar cases have been decided based on the precedent set by a decision made by the House of Lords in the case of Walkley v Precision Forgings Ltd. That case did not allow the court to exercise its discretion and this was the rule applied in Horton v Sadler until the case reached the House of Lords on appeal.
The House of Lords overruled the earlier decision, deciding that the Walkley judgment had been wrong as it deprived claimants of a right Parliament intended them to have. The MIB’s defence to the claim was based solely on a technical breach. In all other respects, the claimant's case had been 'cast-iron' and so the appeal was allowed.
The effect of this case should be that claimants are less likely to have their claims rejected as a result of breaches of limitation periods. It will, of course, depend on the facts and circumstances of the individual case.