Limitation Periods for Money Claims Under the Limitation Act 2010
When someone suffers a loss due to another’s act or omission and seeks monetary relief, such as for breach of contract or negligence, the Limitation Act 2010 (“the Act”) sets time limits for bringing such claims. These limits encourage claimants to take timely legal action.
A money claim generally must be filed in Court within six years of the act or omission occurring. This six-year period is known as the primary period. If a claim is filed after this timeframe, a defendant can apply to have it struck out.
However, the Act includes exceptions. One key exception is the late knowledge provisions. A claimant may still have time to file if they can prove that they gained knowledge of, or ought to have gained knowledge of, all of the following facts within three years before filing the claim in court:
- That the act or omission occurred;
- That it was attributable to or involved the defendant;
- That damage or loss was suffered (if relevant to liability);
- That the claimant didn’t consent (if consent matters to liability);
- That fraud or mistake was involved (if that is relevant to liability).
The courts may impute knowledge if a reasonable person in the claimant’s position would have known or investigated further. Simply ignoring the signs is not a valid excuse.
Importantly, this late knowledge period does not automatically extend the primary six-year period. If a claimant gains knowledge within the first three years of the primary period, they still must bring their claim within six years. Only if the knowledge arises later can the claim period be extended—but only up to the “longstop” period.
The longstop period sets an absolute limit. For claims involving building work or performance of functions under the Building Act 2004, the limit is ten years. For all other claims, it is fifteen years. Even if a claimant had no knowledge of key facts, if the claim is brought after the applicable longstop, it will fail.
There are two important exceptions that can reset the limitation clock:
- If a defendant acknowledges liability in writing, a new six-year primary period may begin from the day after the acknowledgment.
- If a defendant makes a part-payment toward a debt, this may also start a new primary period.
Acknowledgements are assessed objectively, based on the words used and the context, as seen through the eyes of a reasonable person.
There are also different limitation periods for other types of money claims, such as a defamation and abuse claims.
For claimants, prompt action is crucial. Delays can easily result in claims becoming time-barred, even in cases with late discovery or clear liability. Understanding how the Act works, and its exceptions, can be the difference between a successful claim and a claim that is dismissed.
It is best to take legal advice at an early stage in order to limit the potential for a valid money claim being time-barred, particularly where comprehensive investigations may be required to ascertain and confirm the particular facts of the case.
