Berney v Saul (t/a Thomas Saul & Co (Solicitors))

A negligence cause of action accrues when the claimant first suffers actual financial damage through the breach of duty. The question is when the claimant became financially worse off than otherwise would have been the case.

In negligent litigation cases, damage may arise before settlement or strike-out if delay substantially diminishes the underlying claim. The claimant cannot postpone accrual merely by pleading loss by reference to a later settlement. A real risk that the underlying claim will be restricted may constitute measurable damage.

Where the opposing party has promised to take no procedural point during an agreed extension, that risk does not arise before the assurance is withdrawn. A later accrual date leaves proceedings issued within six years in time.

The claimant instructed the defendant solicitor to conduct a personal injury claim arising from a road accident. Although liability was admitted, the solicitor failed to serve Particulars of Claim within the prescribed time. New solicitors continued obtaining medical evidence and eventually settled the personal injury claim for £25,000 on 1 November 2005.

The claimant issued professional negligence proceedings on 10 January 2011. A district judge struck out the claim as time-barred and because its prospects were very limited. HHJ Simpkiss dismissed an appeal on the limitation ground, holding that the underlying claim had suffered a significant diminution in value well before 10 January 2005.

The central question was when the claimant first sustained actual damage for the purposes of section 2 of the Limitation Act 1980.

1. Appeal allowed. A cause of action in negligence accrues when the claimant first suffers actual damage through the breach of duty. The governing factual inquiry is when the claimant became financially worse off than she otherwise would have been: Nykredit Plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627.

2. Moses LJ, with whom Rimer LJ agreed, held that the form of the pleading did not determine the date of accrual. A claimant who pleads loss by reference to settlement may already have sustained damage if the underlying claim was substantially diminished beforehand. Such diminution need not await quantification by a sale or settlement. The reasoning in Khan v Falvey [2002] EWCA (Civ) 400 supported that conclusion.

3. There was a real possibility that an application made later in 2005 would have resulted in the personal injury claim being restricted to £50,000 or to the amount supported by the medical evidence then available. Price v Price [2003] EWCA (Civ) 888 demonstrated that an extension of time could be granted subject to such a restriction. A real risk of restriction was capable of constituting actual, measurable damage.

4. That risk had not arisen by 10 January 2005. The opposing solicitors had expressly allowed time for the joint expert to answer questions and had promised to take no procedural point concerning the additional delay. They could not have withdrawn those assurances retrospectively. The assurances were withdrawn only on 25 January 2005. Actual damage therefore first arose after the critical limitation date, and the professional negligence proceedings were commenced within six years.

5. Gloster LJ also allowed the appeal but would have fixed accrual at the settlement on 1 November 2005. She considered that an unrestricted extension of time should have been granted under rules 3.1(2)(a) and 3.9 of the Civil Procedure Rules. The majority did not adopt her conclusion that there had been no earlier diminution.

6. The alternative grounds concerning causation, quantum and the merits of the negligence claim could not properly be determined until amended pleadings and a defence had been served. Any renewed summary judgment or strike-out application on those grounds was premature.

1. Court of Appeal (Civil Division): Allowed the claimant’s appeal. The professional negligence claim had not accrued before 10 January 2005 and was therefore not time-barred.

2. Brighton County Court, HHJ Simpkiss: Dismissed the claimant’s appeal on 24 July 2012. He held that the underlying personal injury claim had suffered a significant and quantifiable diminution in value before the relevant limitation date.

3. Brighton County Court, DJ Liston: Dismissed the claim as time-barred and on the additional ground that the claimant’s prospects of recovering more than the settlement sum were very limited.

4. Permission stages: HHJ Coltart granted permission to appeal from the district judge. Sir Richard Buxton subsequently granted permission for the appeal to the Court of Appeal.