Horton v Sadler & Anor

The House of Lords held that its earlier decision in Walkley v Precision Forgings Ltd [1979] 1 WLR 606 was wrongly decided and departed from it under the Practice Statement. The court ruled that the discretionary power in section 33 of the Limitation Act 1980 can, in principle, be invoked where an earlier action was issued within the primary limitation period but subsequently foundered, and that the question under section 33 is whether it is equitable to disapply the section 11 time bar having regard to the prejudice to the parties and the matters listed in section 33(3).

The House allowed the appellant's appeal and dismissed the cross-appeal, remitting the case to the Salford County Court for further disposal in accordance with the judge's exercise of discretion under section 33 (the trial judge had said that but for Walkley he would have disapplied the time limit in the second action).

The claimant (Horton) was injured in a road traffic accident on 12 April 1998 caused by an uninsured driver (Mr Sadler). The Motor Insurers' Bureau (MIB) administered compensation for victims of uninsured drivers under agreements with the Secretary of State. The claimant received an interim payment from the MIB. A first action was issued on 10 April 2001 (within the three-year limitation period) but the claimant's solicitors failed to give the notice required by the MIB agreements; the MIB was joined and denied liability and counterclaimed for repayment. The claimant issued a second action in September 2001 and gave the required notice; the MIB pleaded the section 11 time bar and the claimant sought an order under section 33 of the Limitation Act 1980 disapplying the time limit.

The county court (Judge Cooke) tried preliminary issues and held the MIB not liable in the first action (the claimant ordered to repay the interim payment). On the section 33 point the judge held himself bound by Walkley and declined to exercise the discretion, but said that had he been free to do so he would have exercised the discretion to allow the second action to proceed. The Court of Appeal, bound by Walkley, dismissed the appeal. Leave to the House of Lords was granted.

The House considered (i) whether Walkley should be departed from, (ii) the correct construction and scope of section 33, and (iii) the balancing exercise to be carried out under section 33(3), including the weight to be given to competing insurers' interests. The House concluded that Walkley was wrongly decided, had produced anomalous distinctions and unduly fettered the broad discretion Parliament had conferred. The court held that section 33 must be applied by balancing the prejudice to claimant and defendant (and, properly considered, their insurers) in light of the matters listed in subsection (3). Applying these principles, the House allowed the appeal, dismissed the MIB's cross-appeal and remitted the proceedings to the county court for disposal consistent with the judge's stated exercise of discretion. The court also addressed procedural points: the need to avoid abuse by maintaining duplicate actions and a brief comment that no Article 6 European Convention issue arose on the facts.

Appeal allowed and cross-appeal dismissed. The House departed from Walkley v Precision Forgings Ltd and held that the court may, in principle, exercise its section 33 discretion even where a first action was issued within the primary limitation period but later foundered; the matter must be decided by balancing the prejudice to the parties with regard to the factors in section 33(3). The case was remitted to the Salford County Court for further disposition.

Appeal from the Court of Appeal (Civil Division) [2004] EWCA Civ 936, which had dismissed the claimant's appeal in reliance on Walkley v Precision Forgings Ltd. Permission to appeal to the House of Lords was granted and the House allowed the appeal and dismissed the cross-appeal.