Laws & Ors v The Society of Lloyd's

The interpretative obligation in section 3 of the Human Rights Act 1998 does not alter accrued substantive rights or immunities arising before that Act commenced. Article 6 protects access to a court for the determination of arguable civil rights. It does not create substantive rights.

A statutory immunity from damages defines the scope of substantive rights and is not merely a procedural bar. A late statutory-misrepresentation claim is not an action for damages for negligence under sections 14A or 14B of the Limitation Act 1980, because the claimant need not allege a negligent act or omission.

After fraud claims in the Lloyd’s litigation failed, certain underwriting Names sought permission to amend their pleadings to claim damages for negligent misstatement and statutory misrepresentation. Cooke J held that claims accruing after section 14 of the Lloyd’s Act 1982 commenced were barred by Lloyd’s substantive immunity. He also determined several limitation and amendment issues.

The Names appealed or sought permission to appeal. The principal questions were whether the Human Rights Act 1998 enabled a Convention-compatible construction of section 14, whether Article 6 was engaged, when the 1982 Act commenced, and whether the proposed claims could overcome the amendment and limitation provisions of the Limitation Act 1980.

1. Disposition. The post-1982 Act Names’ appeal was dismissed. Every other appeal for which permission was granted was also dismissed, and permission was refused on the remaining grounds. Cooke J’s orders therefore stood. Permission to appeal to the House of Lords was refused.

2. The court held that section 3 of the Human Rights Act 1998 could not be used to alter Lloyd’s accrued immunity under section 14(3) of the Lloyd’s Act 1982. Before the 1998 Act commenced, Lloyd’s had no liability in damages for the relevant conduct unless bad faith was established. Applying section 3 to remove that immunity would impermissibly alter accrued rights in pre-existing civil litigation.

3. Article 6 was not engaged. It protects procedural access to a court for the determination of arguable civil rights, but does not create substantive rights. Section 14 restricted the scope of the Names’ substantive rights by conferring immunity from damages. It was not a procedural bar, regardless of the way in which it was drafted.

4. For section 35(5) of the Limitation Act 1980, the court must identify the facts already in issue and determine whether the new cause of action arises from the same or substantially the same facts. That is a fact-sensitive evaluative judgment. Here, negligence concerned what Lloyd’s ought to have done and required substantially different factual and expert inquiries from the fraud claim, which concerned the knowledge or recklessness of identified individuals. The proposed negligent-misstatement claims therefore did not satisfy the provision.

5. A claim under section 2(1) of the Misrepresentation Act 1967 is not an action for damages for negligence within sections 14A or 14B of the Limitation Act 1980. The claimant need not allege negligence. The representor instead bears the burden of proving reasonable grounds for belief and actual belief in the representation’s truth.

6. Section 14B imposed a 15-year longstop. A claimant had to identify a relevant negligent act or omission within that period, and could recover only loss flowing from that act or omission. A later act could not support recovery of historical loss already sustained.

7. Section 14 of the Lloyd’s Act 1982 commenced on Royal Assent, 23 July 1982. Neither the Act nor its transitional provisions postponed its commencement until the Council of Lloyd’s first met. Prospective members relying on recruitment brochures were persons seeking to become members of the Lloyd’s community and therefore fell within section 14(2)(c).

1. Court of Appeal (Civil Division): The appeals for which permission was granted were dismissed, the remaining applications for permission were refused, and Cooke J’s orders stood: [2003] EWCA Civ 1887.

2. High Court, Commercial Court: Cooke J refused the relevant amendments or confined the Names to a limited category of potentially viable pre-23 July 1982 negligent-misstatement claims. No neutral citation is stated.