On behalf of Lockton, a discussion of the risk management issues presented by time limits and deadlines, some of which have come into sharper focus as a consequence of COVID-19 and working from home

While time in lockdown has, for many, felt eternal, the clock has continued to tick. Time limits and deadlines for solicitors in many legal sectors have remained, despite the novel and challenging circumstances we have faced.

Step back a year in time – the majority of solicitors were unsure what working from home would be like. A variety of changes had to be made to the way in which the traditional solicitor worked. A year on, and these changes are now the new way of working.

One issue which has not changed, however, is the uncertainty which competing authorities create in assessing prescriptive periods. If anything, this is proving increasingly difficult as we await the outcome of the appeal in WPH Developments Ltd v Young & Gault [2020] and the commencement of the Prescription (Scotland) Act 2018, for which workable transitional provisions remain elusive. Meanwhile, we remain fully reliant on the existing Prescription and Limitation (Scotland) Act 1973 and recent judicial interpretations.

Not what the doctor prescribed…

Section 6 of the 1973 Act, in broad terms, extinguishes certain claims that are more than five years old, with time running from the date the pursuer suffers a loss. When that period begins is still a contentious issue, as is the interpretation of s 11(3), which postpones the start of that period until the pursuer is, or is deemed to be, aware of the loss.

The Supreme Court in David T Morrison & Co Ltd v ICL Plastics Ltd [2014] (the Stockline Plastics factory explosion case) adopted a strict approach towards pursuers, deeming the clock to run as soon as they knew they had suffered loss, injury or damage, irrespective of knowing the cause or who might be responsible.

Gordon’s Trustees v Campbell Riddell Breeze Paterson LLP [2017] extended this even to situations where knowledge of the loss was not as clear cut, such as in economic loss claims. It was not necessary for a pursuer to know they had an actionable head of loss: the prescriptive period started from the moment they were aware something had gone awry to cause a loss, expense or disadvantage.

The Lord Ordinary in Midlothian Council v Raeburn Drilling and Geotechnical Ltd [2019] went further, concluding that loss occurred as soon as the pursuer accepted and acted in reliance on the defender’s advice and that, although the pursuer was unaware of the detriment at the time, the fact that they had incurred expenditure which later turned out be loss was enough to start the prescriptive clock.

The judicial interpretation in these cases has been suggested to be manifestly unfair to pursuers. The first instance decision by Sheriff Reid in WPH Developments Ltd seemed a step towards redressing the balance, but has served to cause further confusion, not least because, in the 11 November 2020 decision in Glasgow City Council v VFS Financial Services Ltd, Lord Tyre suggested Sheriff Reid’s decision was at odds with Gordon’s Trustees.

To be on the safe side, solicitors acting for pursuers are then left having to raise protective proceedings to avoid time bar, while those on the defending side are left deciding whether to incur the cost of preparing a defence to a raised but sisted action which may never be taken further.

Significant risks may, however, attach to those who wait. If the start of the prescriptive period is wrongly identified by pursuers’ solicitors, failing to bring protective proceedings could lead to a professional negligence claim against them. For solicitors acting for defenders, failing to identify a statable defence of prescription could be detrimental to their client’s position and leave those solicitors exposed.

It is hoped that the impending appeal decision in WPH Developments and the eventual implementation of the 2018 Act will provide much needed clarity on the position but, in the meantime, the advice to solicitors continues to be to err on the side of caution and assume that prescription starts to run from the earliest date on which an occurrence of loss or ultimately wasted expenditure can be identified.

Serving documents timeously

It is not just in the context of serving proceedings that court timetables still have to be adhered to. While the COVID-19 pandemic has expedited the transition to paperless documents for many businesses, including the courts, solicitors should not assume that everything can now be done by email. Schedule 4, para 1(5) to the Coronavirus (Scotland) Act 2020 (“CSA”), as amended, permits the Lord President to direct for certain documents to be excluded from electronic submission, such as commissary documents. Additionally, para 1(3) provides that consent to electronic service on a party should be obtained prior to service. This is particularly important in the case of initial service of proceedings. Consent must be obtained and should not be assumed from previous conduct in relation to other types of court documents, as this could be challenged by the recipient. A successful challenge to service could lead to a delay in raising proceedings, which could be critical where there is a time limit involved.

It may be a good idea to agree a specific email address for service and test it in advance. This would also confirm that the recipient has access to the particular mailbox outside the office. If the receiving party does not confirm that service may be made electronically, thought will require to be given as to how else service can be effected, particularly when parties are working from home and there may be no one at the business address to accept service. If the business address is closed, it may not be possible to leave the documents in the hands of an individual and depositing the documents at the place of business may not be sufficient or possible. The message should be to consider the options well in advance and build in sufficient time in case instructions have to be taken (e.g. to accept service), or in case practical difficulties are encountered and a contingency plan is needed.

Issues can be multiplied when serving documents or proceedings on a partnership or whenever service is required on a number of parties. The preferred option would, of course, be to serve the documents electronically, in line with the CSA. If that cannot be agreed, then it may be sensible to arrange for service to be via the parties’ solicitors, by seeing if they will accept service. Problems could arise here, as with service on any party, where a claim is being raised to beat the time bar.

It is also worth bearing in mind that some businesses, which have been forced to close during the pandemic may also, unfortunately, have been forced out of business and may never reopen. As ever, but all the more so in these uncertain times, an early check as to the current status of a prospective defender is a worthwhile step for pursuers’ solicitors, to ensure that an action is worth pursuing, in case it saves a lot of wasted time, trouble and expense which your clients may not ultimately thank you for.

It is also important to note that courts have adopted individual arrangements and solicitors should be aware of the individual practices of each court. There is differing guidance regarding when matters should be progressed, such as when they are deemed to be urgent or not, and this should likewise be considered. The Court of Session issued a guidance note in January 2021 which suggests that when a solicitor is initiating an action which could become time barred, any emails should be marked as “urgent”. At the start of the pandemic, the court had a specific urgent mailbox set up to assist with the management of urgent business, but that has been closed since 22 June 2020. It is vital to keep up to date with the relevant mailbox addresses of each court.

Points to consider

Steps to consider would be:

  1. Ensuring that you keep up to date with COVID related changes, including those put in place by individual courts, which are constantly being updated. This can be done by attending webinars, regularly checking the position, holding regular team meetings to discuss recent changes, and keeping all team members informed and circulating any updates amongst the wider firm.
  2. Assessing prescription when instructions are first received. Be clear on the facts to ensure the correct prescriptive period is applied; if in doubt, always take the earliest date. This should then be documented in a centralised, or at least double entry, diary system which can be remotely accessed by all relevant members of the team so everyone is aware of the timescales and can step in to deal if necessary.
  3. Considering, planning and initiating protective proceedings at the earliest opportunity if a claim is at risk of prescribing. This will allow time for any problems that may be encountered while most people continue working from home and businesses remain closed.
  4. Advising clients to have someone in the office periodically, to avoid court documents being missed, and a clear procedure to pass them to the correct person.
  5. When an initial writ/summons is warranted/signeted electronically it is important to check that the correct email address is used for the relevant court. Emails can be sent using read receipts to provide confirmation of receipt. Alternatively, you may prefer to ask the court to confirm receipt. To ensure that a writ is received, particularly where there are issues of time bar, ensure that you diarise a follow-up call with the court to confirm.

Get with the times

Whilst the application of prescription remains in a state of flux, it is wise to err on the side of caution: even more so given the added practical difficulties which the current restrictions present. Communication amongst teams through a centralised diary system is essential to ensure that deadlines are clear and able to be crosschecked. An open dialogue and communication at the outset with relevant parties will ensure that timeous delivery of documents can be effected and that measures are put in place to prevent any delays in serving proceedings. When sending documents electronically, always assess whether sending with “urgency” is required, ensure that the recipient email address is correct and follow up to confirm receipt. The risk associated with missing deadlines will be minimised by adopting a heightened awareness of the relevant time limits and by following practical procedures to ensure that they are met in good time.

The Author

Gillian Harman is an associate, and Phoebe Crane a trainee solicitor, with BTO Solicitors LLP

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