SECTION 33 AND “LONG TAIL CLAIMS”: CONSTRUCTIVE KNOWLEDGE AND RELEVANCE OF DELAY BETWEEN THE BREACH AND THE DATE OF KNOWLEDGE

In Collins -v- Secretary of State for Business Innovation and Skills & Ors [2014] EWCA Civ 717  the Court of Appeal considered the appropriate legal test  for the date of knowledge and exercise of the section 33 discretion when an action for damages for an asbestos related illness was issued late and the exposure had taken place decades earlier.

THE FACTS

Mr Collins was diagnosed with lung cancer in May 2002, from which he made a good recovery.  He made no enquiries about the cause of that cancer.  He later attributed that illness to exposure to asbestos between 1947 and 1967 . He issued proceedings in May 2012.

The judge at first instance held that the claimant’s date of constructive knowledge was mid-2003, with the result that the limitation period expired in mid-2006. The claimant had therefore started his action six years after expiry of the limitation period.

The judge declined to extend time under section 33 and dismissed the action. Mr Collins appealed to the Court of Appeal.

 THE ISSUES

The two issues in this appeal were:

(a)  the date of constructive knowledge under section 14 of the Limitation Act 1980; and

(b)  whether the judge ought to have extended time under section 33.

The principal question of law in this appeal was whether and how the judge was entitled to take into account the delay occurring between 1947 and mid-2003, which was the date of constructive knowledge on the judge’s analysis.

 FINDINGS ON DATE OF KNOWLEDGE AND SECTION 33

(a) Date of Knowledge

The Court  considered the cases of Adams v Bracknell Forest Borough Council [2004] UKHL 29; [2005] 1 AC 76 and Johnson v Ministry of Defence [2012] EWCA Civ 1505; [2013] PIQR P7, which held that the test to be applied under section 14 (3) is an objective one.

• The court must disregard the particular characteristics of the Claimant and decide what inquiries a reasonable person, who had suffered the Claimant’s injury, would make.
• The normal expectation was that someone who had suffered a serious injury would seek professional advice as to the cause.
• In this particular case it was held that the claimant had constructive knowledge under section  14 (3) of the Limitation Act 1980 of the possible link in mid-2003 (having been diagnosed in May 2002).
• As a “reasonable man”, he should by then have asked his doctor about the possible causes of his cancer. If he had done so, the doctor would have mentioned asbestos exposure as a potential cause.

“38.      Because the test in section 14 (3) is an objective one, the practical consequence is that some injured persons fail to make reasonable and timeous inquiries, with the result that they are time-barred. This is unsurprising. Sections 11 to 14 of the Limitation Act strike a balance between the interests of (a) persons who, having suffered latent injuries, seek compensation late in the day and (b) tortfeasors who, despite their wrongdoings, ultimately need closure. Parliament has struck that balance by means of an objective test. Parliament has also provided a safety net in the form of section 33 so as to prevent injustice arising.”

(b) Exercise of Discretion under section 33

Lord Justice Jackson held that one of the central issues to be considered under section 33 was the substantive prejudice to the claimant.  He went on to consider the period of time over which the prejudice to the defendant should be assessed.

“65.      …In a long tail case the problem seems to me to be this. Criterion (b) (of s33(3)) requires the court to focus specifically upon the extent to which the evidence has become less cogent during the claimant’s delay. If the claimant is out of time, the House of Lords’ decision in Donovan allows the court to take account of prejudice accruing since the date when the claimant knew he/she had a claim. The decisions in Price, AB and Davies establish that the court can also take account of delay before the date of actual or constructive knowledge. On the other hand, it would be absurd if the defendant could rely upon all the prejudice accruing from the date when the breaches of duty occurred, alternatively from the date when (unknowingly) the claimant suffered injury. If all that prejudice could be fully taken into account, section 33 (3) (b) would serve no useful purpose. Loss of cogency of evidence during the limitation period must be a factor which carries more weight than (a) the disappearance of evidence before the limitation clock starts to tick or (b) the loss of cogency of evidence before the limitation clock starts to tick. Furthermore both the claimant and the defendant may rely upon the effects of delay before the limitation clock starts to tick for different purposes.

 Construing section 33 (3) as best I can in the light of the authorities, my conclusions are:

i) The period of time which elapses between a tortfeasor’s breach of duty and the commencement of the limitation period must be part of “the circumstances of the case” within the meaning of section 33 (3).

ii) The primary factors to which the court must have regard are those set out in section 33 (3) (a) to (f). Parliament has singled those factors out for special mention.

iii) Therefore, although the court will have regard to time elapsed before the claimant’s date of knowledge, the court will accord less weight to this factor. It will treat pre-limitation period effluxion of time as merely one of the relevant factors to take into account.

iv) Both parties may rely upon that factor for different purposes. The claimant may rely upon the earlier passage of time in order to buttress his case under section 33 (3) (b). The claimant may argue that recent delay has had little or no impact on the cogency of the evidence. The damage was done before the claimant started being dilatory. The defendant may rely upon the earlier passage of time, in order to show that it already faced massive difficulties in defending the action; therefore any additional problems caused by the claimant’s recent delay are a serious matter. It is for the court to assess these and similar considerations, then decide on which side of the scales to place this particular factor.

7. Let me now return to the present case. The judge carried out his evaluation exercise at paragraphs 30 to 48 of the judgment. He treated the criteria set out in section 33 (3) (a) to (f) as the factors of primary importance. He also had regard to the passage of time (some 50 years) between the defendant’s alleged breaches and the claimant’s date of constructive knowledge. He took into account the extent to which this assisted the claimant in relation to criterion (b). More generally he treated the lengthy period of historic delay as a factor making it less equitable to extend time under section 33 (1). The judge did not attach undue weight to this consideration.
8. In my view the judge was entitled to take the period of historic delay into account in the manner that he did. I therefore reject the claimant’s main line of attack on the judge’s decision under section 33.

…

5. In determining whether to extend time under LA section 33 the judge must consider the matters specifically identified in section 33 (3), as well as all the circumstances of the case. He then carries out an evaluation under section 33 (1) in order to determine whether it would be equitable to allow the action to proceed, having regard to the degree to which (a) the claimant is prejudiced by the time bar and (b) the defendant would be prejudiced if the time bar were lifted.”

 POINTS TO NOTE

Date of Knowledge

• This decision reiterates the point that the test for constructive knowledge is an objective one.
• The court must disregard the particular characteristics of the claimant and decide what inquiries a reasonable person, who had suffered the claimant’s injury, would make.
• The normal expectation is that someone who had suffered a serious injury would seek professional advice as to the cause.

The practical consequence is that a claimant fails to make reasonable and timeous inquiries, they will be time-barred.

Section 33

• In determining whether to extend time under LA section 33 the judge must consider the matters specifically identified in section 33 (3), as well as all the circumstances of the case.
• The period of time which elapses between  defendant’s breach of duty and the commencement of the limitation period must be part of “the circumstances of the case” within the meaning of section 33 (3).
• Although the court will have regard to time elapsed before the claimant’s date of knowledge, the court will accord less weight to this factor. It will treat pre-limitation period efflux ion of time as merely one of the relevant factors to take into account.