UK Insurance Ltd v Carillion Specialist Services Ltd

For limitation under section 14A of the Limitation Act 1980, knowledge concerns the damage claimed and the broad facts linking it to the defendant’s act or omission. A claimant need not know that it has a worthwhile cause of action, identify every defect, or obtain complete expert advice. Knowledge may arise when information reasonably prompts preliminary investigation into the reliability of a professional certificate and the risk undertaken in reliance on it. Once acquired, relevant knowledge is not suspended merely because further investigations are undertaken. Where a pleading contains a basic causation case but does not connect the alleged breaches to the counterfactual course of action, the appropriate remedy is further information rather than strike out.

The claimant insurer sued the second defendant, an independent surveyor and auditor, in tort for losses allegedly caused by an unqualified certificate of approval issued in connection with latent-defects insurance. The second defendant applied for summary judgment, contending that the claim was time barred under section 14A of the Limitation Act 1980. It also applied to strike out the claim under CPR Part 3.4(2)(a), alleging that causation was insufficiently pleaded.

The claimant relied on a later expert report as the date of knowledge. The court considered whether earlier engineering letters and the insured’s claim under the policy supplied the requisite broad knowledge, and whether the pleading disclosed a sufficient causation case.

1. Summary judgment. The court granted summary judgment for the second defendant and dismissed the claim as wholly time barred. The documents were sufficient to determine the limitation issue without a trial.
2. Under section 14A, the relevant damage was the additional unwanted risk undertaken by issuing the policy, rather than the later physical damage to the render. Knowledge of the precise cause of the render damage was unnecessary.
3. The March 2013 engineering letter identified only one horizontal expansion joint, an unsuitable frequency, and a connection between the insufficiency of joints and the cracking. Read in the context of the policy and the insured’s claim, it gave the claimant broad knowledge that the risk undertaken might be attributable to a defect in design or workmanship and that the certificate’s reliability required investigation.
4. The August 2013 letter independently supplied sufficient knowledge. It maintained the criticism concerning movement, identified inadequate reinforcing mesh, and recommended extensive replacement works. The claimant did not need to know every defect, establish negligence, or obtain a complete expert report. Relevant knowledge was acquired in June 2013, and in any event by 12 September 2013.
5. The August letter supplemented rather than superseded the March letter. The question whether later information could stop time therefore did not arise. The court nevertheless indicated that the statutory scheme did not appear to contemplate cessation of time after relevant knowledge had been acquired.
6. Strike out. The pleading contained a basic causation case: the claimant alleged that either defendant’s proper performance would have led it not to issue the policy or to issue it on different terms. However, it did not adequately explain how each alleged breach by the second defendant would have altered the claimant’s conduct. Strike out was inappropriate because the deficiency was capable of being cured by further information. The alternative application was formally redundant after summary judgment.

First-instance decision. No appellate history was stated in the judgment.