News In Focus
5 May 2005
Contract damages case not time barred
A time barred claim for personal injuries does not stop an action that also claims contractual damages, a Court of Session judge has ruled.
Lord Bracadale in the Outer House allowed a case by retired motor engineer John Brady against his accountants Hutton & Philip to go to proof under deletion of a claim for damages for anxiety, distress and ill health.
Mr Brady's case was that when his business was subject to an Inland Revenue investigation, the defenders failed to advise him of the possibility of negotiating a settlement in advance of a hearing before the General Commissioners, or of the possible outcomes before the Commissioners including the charging of interest and penalties. Had he been properly advised, he would have settled at a much lower figure than the Commissioners ordered. The defenders were in breach of contractual duty to him and among other things had caused the ill health described.
The accountants argued that the personal injury claim had been brought later than the three year time limit allowed by the Prescription and Limitation (Scotland) Act 1973. Further, the effect of section 17 of the Act was that if part of the case included such a claim, the whole action became subject to the three year limit although a contractual claim could otherwise be brought within five years. A 1967 case, Drinnan, on the effect of similar earlier legislation was inconsistent with the wording of the Act.
Lord Bracadale however held that the approach in Drinnan was correct. There Lord Milligan had ruled although the defenders' interpretation was a possible one, he was extremely reluctant to give the statute that meaning. The section could be read as providing a limitation for personal injuries claims only, so that while the claim in respect of ill health had to be excluded from proof, it did not affect the claim for economic loss.
Lord Bracadale's opinion can be read at http://www.scotcourts.gov.uk/opinions/CSOH56.html .