If you are intending on bringing a claim it is important to ensure that it is brought within the time frames provided for under the Limitation Act 1980 (“LA 1980”) .
In order to bring a claim within the limitation period, the court needs to receive the claim form and correct court fee in time. Failure to comply with time frames pursuant to LA 1980 (or other applicable limitation provisions) can enable a defendant to have a complete defence.
There does not appear to be any provisions in the Emergency Coronavirus Bill presented to Parliament and the Coronavirus Act 2020 to suspend the effect of the LA 1980. Accordingly, along as the claim form and the correct court fee is received by the court before the limitation period expires, from a limitation perspective, the clock will stop (even if there is a small delay due to the coronavirus pandemic).
However, given the potential for issues arisen due to the coronavirus and the risks generally in filling a claim form shortly before the expiry of the limitation period, in order to minimise the chance of a claim becoming time barred, consideration should be given to either entering a standstill agreement with the other party or possibly issuing protective proceedings.
A standstill agreement is whereby parties can enter into an agreement to suspend the running of the limitation period or extend it to a specific date. Such an agreement should be carefully drafted and it is also important that the parties clearly state what their intentions are regarding this.
It should be noted that there is an important distinction in connection with suspending the running of time for a defined period, and extending the period of limitation to a specific date. With regards to the running of time being suspended, the unexpired portion of the limitation period, as at the date of the agreement will re-commence after the period of suspension ends. In relation to when the limitation period is extended, the limitation period will typically end on the date when the period of extension ends. This will normally be a date later than when the original limitation period was due to end. Given the current circumstances, discussions in connection with entering a standstill agreement should be commenced as soon as possible in order for any agreement to be finalised in good time.
If a standstill agreement is not possible, to ensure a claim is properly preserved, in some cases issuing protective proceedings may be appropriate. However, should a claim be issued, there is an expectation that proceedings be pursued promptly given that the clock will start to run in relation to service and the particulars of claim. Further there should be a valid basis for the claim being issued given that where there isn’t one and proceedings are issued for limitation purposes only, this may be considered to be an abuse of process.
If you would like any further information on any of the above, or would like to discuss your particular circumstances and how Knights could help, please contact a member of our Restructuring & Insolvency team.