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Horton v Sadler, House of Lords, 14 June 2006

14 July 2006
The issues

Limitation – Walkley v Precision Forgings Ltd – whether Claimant in a personal injury action who had issued proceedings before the limitation period had expired but had brought a second action in respect of the same cause of action after expiry the Court could use its discretion to disapply the three year time limit.

The facts

On 12th April 1998 Mr Horton was injured in a road traffic accident. The Defendant, Mr Sadler, was responsible. Mr Sadler was not insured. The MIB nominated insurers to act as it agents. In October 2000, the MIB made an interim payment to the Claimant. On 10th April 2001, two days before the three year limitation period expired, proceedings were issued by the Claimant’s Solicitors against Mr Sadler. They failed to give notice of the proceedings to the MIB. This failure was a failure to comply with a condition precedent of the MIB’s liability under the agreement between it and Secretary of State for Transport. The MIB served a Defence denying liability and relying on the failure to comply with the notice conditions. The MIB counter claimed for return of the interim payment. In September 2001, a second set of proceedings were issued against Mr Sadler by the Claimant. This time the requisite notice was given to the MIB. The MIB were joined as party to the second action. The MIB maintained that the claim was statute barred. The Claimant sought an Order disapplying the three year time limit under Section 33 of the 1980 Limitation Act. The preliminary issues were ordered to be tried separately and were heard in the Salford County Court. The Judge found that the MIB was under no liability in the first action because of the failure to comply with the condition precedent and that the Claimant should repay the interim payment with interest. In the second action, the Judge decided that he could not exercise the Section 33 discretion because of the effect of the decision of the House of Lords in Walkley v Precision Forgings Ltd. In that case the House of Lords decided that in a Court could not exercise its power to disapply the ordinary time limit in a personal injuries action where a Claimant had issued proceedings in respect of those injuries before the ordinary time limit had expired and had then brought a second action after the time limit had expired.

The decision

In Walkley, the House of Lords had approached the matter on the basis that the Claimant had been prejudiced not by the operation of the limitation bar, but by his delay in proceeding with the first action. But this was not the correct analysis. The Plaintiff could only succeed in his second action in Walkley. To that action, Section 11 provided a bar which prejudiced him by defeating his action. Section 11 did not prejudice the Plaintiff in his first action brought in time but that was not the relevant action.

It had been argued for the appellant that the affect of Walkley was to fetter a discretion which the legislation was intended to give the Court unfettered. The MIB had argued that the Law Reform Committee appeared to have contemplated a more limited discretion. This was so, but the committee did not annex a draft bill to its report. The statutory language in the act was clear. Reliance on the twentieth report could not qualify or override the terms of a statute which were clear.

The reasoning of the decision in Walkley was unsound and it had given rise to distinctions which disfigured the law the effect of which had been to restrict unduly the broad discretion which Parliament had conferred.

The House of Lords rarely exercises its power to depart from its own previous decision and it had never been thought enough to justify doing so that a later generation of law Lords would have made a different decision. However it would be appropriate to depart from Walkley for three reasons taken together: that it unfairly deprived Claimants of a right to which Parliament had intended them to have; that it had driven the Court of Appeal to draw fine distinctions which were correct but which were so fine as to reflect no credit on this area of the law; and that it subverted the clear intention of Parliament.

Appeal allowed.

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