Iqbal v Legal Services Commission

For a tort requiring damage, limitation begins when the claimant suffers material damage. Later, more serious or more precisely quantifiable consequences of the same wrongful act do not create a fresh cause of action. A continuing tort may generate fresh causes of action where repeated or continuing wrongful conduct causes distinct damage during the limitation period. That principle did not apply where the pleaded conduct and material damage occurred before proceedings were issued, and later consequences flowed from the original withholding of money. Claims for breach of statutory duty and misfeasance in public office were therefore statute-barred.

The claimant, a solicitor, brought assigned claims against the successor to the Legal Aid Board. He alleged breach of statutory duty under Legal Aid Act 1988 and misfeasance in public office arising from the withholding of payments for publicly funded work.

The High Court held that both causes of action were statute-barred and dismissed them. The claimant appealed, arguing that the alleged breaches and misfeasance were continuing wrongs, so that fresh causes of action arose when the firm later collapsed. The central issue was whether the pleaded facts disclosed continuing or repeated wrongful conduct causing actionable damage within the limitation period.

1. Appeal dismissed. The claims were correctly held to be statute-barred. The formal order was dismissal of the appeal with costs of £4,000.
2. Where damage is an essential ingredient of a tort, the cause of action accrues when material damage occurs. Actual damage includes financial detriment, liability or loss capable of monetary assessment, provided it is relevant damage and more than negligible. Later consequences which make the damage more serious or easier to quantify do not ordinarily create a new cause of action where they result from the same wrongful acts. The court applied the principles discussed in Khan v Falvey [2002] EWCA Civ 400, Forster v Outred & Co [1982] 1 WLR 86, Nyecredit Plc v Edward Erdman Ltd (No 2) [1997] 1 WLR 1627 and Knapp v Ecclesiastical Insurance Group Plc [1998] PNLR 172.
3. Some torts may be continuing torts. A continuing or repeated breach may generate a fresh cause of action where distinct wrongful events continue during the limitation period and cause additional damage. The distinction is between an isolated event causing a continuing chain of damage and continuing wrongful conduct causing loss on later occasions. The court explained and distinguished the reasoning in Phonographic Performance Ltd v Department of Trade and Industry [2004] EWHC 1795 (Ch); [2004] 1 WLR 2893.
4. The alleged breach of section 6(2) of the Legal Aid Act 1988, if actionable, was not continuing on the pleaded facts. Material damage had occurred before 23 October 1997, and there were no pleaded post-limitation acts or later occasions giving rise to separate damage. The later withholding of just under £8,000 could not sufficiently be connected to the catastrophic consequences alleged.
5. The misfeasance claim likewise accrued outside the limitation period. The pleaded malicious conduct ended no later than April 1997 and the pleaded conduct of the Legal Aid Board ended no later than July 1997. The later closure of the firm was alleged to be a consequence of that earlier conduct, not a fresh act of misfeasance.
6. Lord Justice Pill agreed with the result, while noting that non-payment might in another case constitute repeated breaches of statutory duty. On these pleadings, however, the alleged catastrophic loss could not be attributed sufficiently to any post-23 October 1997 breach.

• Court of Appeal (Civil Division) [2005] EWCA Civ 623: appeal dismissed with costs of £4,000.
• High Court of Justice, Queen's Bench Division, Leeds District Registry Mercantile List: His Honour Judge Behrens, sitting as a deputy judge of the High Court, held that the two causes of action were statute-barred and dismissed the claims.