Negligence ruling opens floodgates

A judgment in the House of Lords yesterday could open the floodgates to legal actions for negligence against professional advisers and construction industry contractors even though the disputed events happened decades ago.

Three of the five judges in the case overturned a Court of Appeal judgment in June last year that, in effect, limited the scope for taking legal action against professional advisers. The two other judges supported the Appeal Court ruling.

At present, in most legal actions, litigants are prevented from starting a case if the cause of action occurred more than six years ago. However, the Limitations Act 1980 allows an exception to this rule if there has been deliberate concealment of negligence.

In yesterday's case, the Law Lords decided that a group of 500 Lloyd's names who were on an insurance syndicate in 1982 are still able to sue syndicate managers who ran up losses totalling £370m.

Lawyers for the managers of the Outhwaite syndicate 317 had argued that the normal six-year time bar for bringing legal actions applied. They claimed the statutory exception did not apply on the grounds there was no concealment at the time of the alleged negligence.

Lawyers for the names successfully argued it did not matter that the negligence and the concealment did not occur at the same time.