CostsDeliberate concealment in limitation

May 17, 20191

I have previously given an overview of limitation periods in professional negligence claims, indeed it is that article which consistently records the most traffic on my website. That article briefly touched on the issue of deliberate concealment. As I am often asked to advise about it, in this article I consider in some more detail the topic of deliberate concealment in professional negligence claims.

As my previous article explained, in a claim based on negligence, if the primary 6 years limitation period has expired and you are unable to rely on the secondary limitation period in section 14A, it may be important to consider deliberate concealment.

Deliberate concealment is also potentially very significant, because it can be a way of circumventing the 15 year “longstop” in section 14B.

Deliberate concealment is catered for by section 32 of the Limitation Act 1980, as follows:

(1)        …where in the case of any action for which a period of limitation is prescribed by this Act, either—

(b)        any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

                       …

(2)        For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.

        …

(5)        Sections 14A and 14B of this Act shall not apply to any action to which subsection (1)(b) above applies (and accordingly the period of limitation referred to in that subsection, in any case to which either of those sections would otherwise apply, is the period applicable under section 2 of this Act).

Deliberate breach of duty

The first point to note is that section 32 in effect provides for two different types of deliberate concealment. One is perhaps not what we would think of “concealment” at all but where the defendant deliberately commits a breach of duty in circumstances in which it is unlikely to be discovered for some time. This will not apply where a professional has simply been careless, but involves demonstrating that the breach of duty was deliberate. That means that the professional either knew that he was committing a breach of duty or intended to commit a breach of duty.

In Cave v Robison, Jarvis & Rolf [2003] 1 AC 384, Lord Scott said, at paragraphs 58 and 60:

The relevant words in section 32(2) are ‘deliberate commission of a breach of duty … amounts to deliberate concealment of the facts involved in that breach of duty’. These are clear words of English. ‘Deliberate commission of a breach of duty’ is to be contrasted with a commission of a breach of duty which is not deliberate, a breach of duty which is inadvertent, accidental unintended—there are a number of adjectives that can be chosen for the purpose of the contrast, and it does not matter which is chosen. Each would exclude a breach of duty that the actor was not aware he was committing.

The claimant need not concentrate on the allegedly concealed facts but can instead concentrate on the commission of the breach of duty. If the claimant can show that the defendant knew he was committing a breach of duty, or intended to commit a breach of duty—I can discern no difference between the two formulations; each would constitute, in my opinion, a deliberate commission of the breach.

Deliberate concealment of any fact

The second type of deliberate concealment is where the professional does actually cover up relevant matters. A number of points arise as to when this may be established.

The meaning of “deliberate” was considered in Williams v Fanshaw Porter Hazelhurst [2004] 1 W.L.R. 3185. In that case a solicitor was found guilty of deliberate concealment. The solicitor agreed to a consent order that another party cease to be a party to proceedings, believing that they could later be joined in again. The subsequent joinder application failed. The solicitor must have appreciated that agreeing the consent order had been a mistake, and was under a duty to inform the client of it, so the failure to do s was deliberate concealment.

The requirement that the fact being concealed is “relevant to the right of action” has been considered in a number of cases, such as the recent See also Ford & Warren v Warring-Davies [2012] [EWHC] 3523 (QB). A fact is only relevant for the purposes of section 32(1)(b) if it is one which has to be pleaded in order to constitute the cause of action.

“Any fact” required only that any one relevant fact is deliberately concealed. If more than one relevant fact is concealed, time will only begin to run once all have been discovered or could have been discovered with reasonable diligence: Halifax Plc v Ringrose & Co [2000] P.N.L.R. 483

The effect on the postponement of limitation can be very significant. In Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd  [1996] 1 AC 102 the House of Lords held that where the concealment takes place after the cause of action has accrued, the effect of section 32(1)(b) is that the claimant will have the full limitation period, not just the balance that was left at the time of the concealment.

Time begins to run when the claimant discovers the fraud or concealment or could, with reasonable diligence, have discovered it. As to what is required by way of reasonable diligence, in Paragon Finance Plc v DB Thackerar [1999] 1 All ER 400 Millett LJ said:

the question is not whether the claimant should have discovered the fraud sooner but whether they could with reasonable diligence have done so. The burden of proof is on them. They must establish that they could not have discovered the fraud without exceptional measures which they could not reasonably be expected to take …  the test [is] how a person carrying on a business of the relevant kind would act if he had adequate but not unlimited staff and resources and were motivated by reasonable but not excessive sense of urgency.”

One comment

  • paul hogan

    June 25, 2020 at 10:36 am

    I have now found this section.

    It is a very informative fact guide for an LiP, who has previously used these guidance steps to issue high court negligence claim again the largest stockbroker in the UK for concealment of a suitability report in relation to 138d for redress of a pension transfer.

    Thank you

    Reply

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