Jessup & Ors v Wetherell & Anor

A solicitor-negligence claim accrues when the underlying claim has become doomed to failure or its value has been substantially diminished because a strike-out application would inevitably, or very seriously, succeed. Actual strike-out is not a necessary condition where relevant loss has already occurred.

The ordinary limitation period for tort and simple contract claims is six years. Sections 32 and 14A of the Limitation Act 1980 provide no extension without deliberate concealment or the statutory form of knowledge. Summary judgment is appropriate where the limitation defence is clear and no further evidence could affect the issue.

The claimants were beneficiaries of an estate and had brought an earlier action against its executors. That action remained substantially dormant for several years, failed to comply with directions, and was struck out on 23 April 1999.

The claimants then sued their solicitors, alleging negligence and breach of duty in the conduct of the earlier action. The defendants obtained summary judgment in the Bournemouth County Court on the ground that the claim was statute-barred. The District Judge refused permission to appeal. The High Court considered the appropriate limitation period, when the cause of action accrued, and whether permission to appeal should be granted.

1. The ordinary limitation period was six years under sections 2 and 5 of the Limitation Act 1980. Section 32 did not assist. The evidence disclosed no deliberate concealment of a relevant fact. The defendants’ retention of papers was the lawful exercise of a lien.

2. Section 14A did not assist. Even assuming that the relevant knowledge was obtained when the papers were released in about March 2002, the additional three-year period expired before the claim was issued and did not extend the earlier six-year period.

3. The court reviewed Hopkins v Mackenzie [2001] Lloyd’s Law Report 600 and the subsequent authorities. The applicable principle was that a solicitor-negligence claim may accrue before the underlying action is formally struck out. Accrual occurs when the underlying claim is doomed to failure, liable to be struck out for want of prosecution, or has suffered relevant damage through a substantial diminution in value. The limited approach in Hopkins v Mackenzie could apply only where the loss claimed was confined to the residual value immediately before actual strike-out.

4. By April 1999 the earlier action had been dormant for over five years, had not complied with directions, and was liable to be struck out. The claimants’ chose in action had consequently been greatly reduced in value. Their present cause of action had accrued by the beginning of April 1999, at the latest.

5. The limitation defence was therefore bound to succeed. No relevant expert evidence or further disclosure was likely to alter the conclusion. Permission to appeal was refused and the County Court’s summary judgment remained effective.

• High Court (Queen's Bench Division): Permission to appeal was refused. The court held that the underlying claim had become doomed to failure by April 1999 and that the negligence claim issued in April 2005 was statute-barred.
• Bournemouth County Court: District Judge Dancey granted summary judgment for the defendants under CPR 24.2 on the basis that the claim was statute-barred. Permission to appeal was refused.