Horton (Original Appellant and Cross-respondent) v. Sadler and another (Original Respondents and Cross-appellants)

The discretion under section 33 of the Limitation Act 1980 remains available where a claimant began an earlier personal injury action within the primary limitation period but brings a second action after it expired. The relevant prejudice is the effect of section 11 on the out-of-time action in which disapplication is sought.

The discretion is broad. The court must decide what is fair after considering the prejudice to each side, all the circumstances and the statutory factors. A negligence claim against the claimant’s solicitors is relevant but does not bar relief.

The House may depart from its precedent where an erroneous rule causes injustice, irrational distinctions and frustration of Parliament’s clear intention.

The appellant was injured by an uninsured driver. Although proceedings were issued within three years, his solicitors failed to give the Motor Insurers’ Bureau the notice required to engage its liability. He therefore brought a second action after the limitation period and sought disapplication of the time limit under section 33 of the Limitation Act 1980.

The Salford County Court held that Walkley v Precision Forgings Ltd prevented the exercise of the discretion, although the judge would otherwise have exercised it for the appellant. The Court of Appeal dismissed an appeal without argument because it was bound by that authority: [2004] EWCA Civ 936.

The central questions were whether the House should depart from Walkley and whether the county court’s proposed exercise of discretion should stand.

1. Disposition. The House unanimously allowed the appellant’s appeal, dismissed the Motor Insurers’ Bureau’s cross-appeal and remitted the case to the Salford County Court. Lord Bingham delivered the leading speech. Lord Rodger, Lord Carswell and Lord Brown expressly agreed with his reasons, while Lord Hoffmann reached the same conclusions.

2. Availability of the discretion. Per Lord Bingham, section 11 of the Limitation Act 1980 prejudiced the appellant by defeating the second action unless the time limit was disapplied. The first action was not the action to which the section 33 application related. The reasoning in Walkley v Precision Forgings Ltd [1979] 1 WLR 606 had conflated the two actions and unduly restricted the broad discretion conferred by Parliament.

   The House departed from Walkley. Its reasoning was unsound, had produced irrational distinctions and had frustrated Parliament’s clear intention. Lord Hoffmann additionally considered that departure would restore certainty because the Court of Appeal had repeatedly been driven to distinguish the precedent on narrow grounds.

3. Section 33 balancing exercise. Per Lord Bingham, the court must decide what is equitable, meaning fair, having regard to the prejudice caused by either result, all the circumstances and the six matters in section 33(3). The claimant’s rights against negligent solicitors and the practical position of insurers are relevant, but a strong professional-negligence claim does not eliminate all prejudice to the claimant or bar disapplication.

   The county court judge had considered the short and understandable delay, the absence of forensic prejudice to the Bureau, its prior notice of the claim, the loss of a fortuitous limitation defence and the further litigation which refusal would require. He had made no error of principle and was entitled to treat the Bureau as the primary source of compensation. His proposed exercise of discretion was therefore upheld.

4. Further observations. Lord Carswell, with Lord Brown agreeing, emphasised that a claimant ordinarily bears responsibility as against the defendant for delay caused by his solicitors. The seriousness of the solicitors’ mistake should not, however, be given separate weight where the statutory exercise concerns prejudice to the parties.

   Lord Bingham considered, obiter, that the former Walkley rule would not have infringed article 6 of the European Convention on Human Rights. He also observed that simultaneous pursuit of duplicate actions is ordinarily an abuse, appropriately addressed by requiring discontinuance of the first action.

1. House of Lords: In [2006] UKHL 27, unanimously allowed the appeal, dismissed the Motor Insurers’ Bureau’s cross-appeal and remitted the case to the Salford County Court.
2. Court of Appeal: In [2004] EWCA Civ 936, dismissed the appeal without argument because binding House of Lords authority precluded the section 33 application.
3. Salford County Court: Judge Roger Cooke held that Walkley v Precision Forgings Ltd prevented him from exercising the discretion under section 33 of the Limitation Act 1980. He found that, but for that authority, he would have disapplied the limitation period. His separate ruling denying the Bureau’s liability in the first action was not appealed.