Background
This action was only against Blyth & Blyth, the structural engineers. The Council argued that they had failed to advise that a gas defence system was required to prevent noxious gas seeping up from the coal strata and mine workings below. At debate, Blyth and Blyth maintained that any right to claim damages had been extinguished by the operation of the short negative prescription pursuant to s.6 of the Prescription and Limitation (Scotland) Act 1973. The defender argued that the Council knew from December 2007 to June 2009 that it was incurring expenditure on construction of the development in reliance on the defender's advice. The Council argued that while that loss occurred in June 2009 – at practical completion of the development - it was not aware of having suffered any loss until 7 September 2013, when the first complaint of gas fumes was made by a tenant.
Lord Doherty granted decree of dismissal. The Court held for the defender on the grounds that, following David T Morrison & Co Ltd (t/a Gael Home Interiors) v ICL PlasticsLtd (2014 SC (UKSC) 222) and Gordon’s Trustees v Campbell Riddell Breeze Paterson LLP (2017 SLT 1287), it was agreed that the breach of contract in 2006 was the date of injuria and, the Court found, as soon as the Council accepted the defender's advice and acted upon it to proceed to construction, there was damnum. The Court said that since both parties accepted that loss, injury or damage had occurred by June 2009, the Council's claim for reparation extinguished in June 2014, more than four years before it raised this action against Blyth & Blyth on 4 September 2018.
Comment
This decision robustly confirms the current position of the law of prescription in the wake of Morrison and Gordon's Trustees. It is worth noting that while Midlothian Council discovered the defect on 7 September 2013 and raised proceedings against some defenders earlier, it waited until 4 September 2018, just days before it perceived its claim would lapse, to raise proceedings against Blyth and Blyth. All defenders must take good advice on the role prescription might play in a dispute even though they are not a named party in proceedings.
Prescription (Scotland) Act 2018
The Prescription (Scotland) Act 2018 ("Act") is principally intended to clarify the period from which time starts to run where a person seeking damages is not fully aware of the circumstances of their loss or who caused it. However it also amends the law around the 20 year period when an obligation is finally extinguished, the law on relevant claims, including in situations of insolvency, the ability to contract out of the Act, and shifts the burden of proof onto the claimant.
The Act was given Royal Assent on 18 December 2018, however it has not yet come into effect. The Scottish Government is currently in the process of drafting the subordinate legislation necessary to give effect to the Act. It is anticipated that the Act will come into force later in 2019.
Contact
For more information please contact Saamir Nizam, Solicitor Saamir.Nizam@dwf.law
