Tick tock, stop the clock!
It’s hard to believe that we are approaching the 6-year anniversary of the first UK lockdown in response to the Covid-19 pandemic. In some ways, it can feel like a fever dream. Did we really follow a one-way system around the supermarket, home school our kids, and endure endless Zoom quizzes? I’m sure that for those on the frontline, it felt more like a nightmare.
For litigators, any impending 6-year anniversary sets off limitation period alarm bells. In Northern Ireland, as in England & Wales, most contractual and tortious claims must be issued within 6 years of the cause of action accruing. That means that claims linked to the pandemic (for example for breach of contract where parties found themselves unable to perform their contractual obligations, or against insurers refusing cover for business interruption losses) will soon become time barred. Whilst the relevant legislation provides some very limited discretion to extend time in certain circumstances, generally it is no longer possible to pursue a claim once the time limit has expired.
For those involved in cross-border transactions or international trade, it should be borne in mind that limitation periods for civil claims vary across the world (from as short as 2 years to as long as 30 years). One of my favourite little quirks of Scots law is the fact that most civil claims “prescribe” after 5 years, which means the underlying obligation is extinguished completely at that point.
The courts have grappled with many complex issues relating to the pandemic in the past few years, including the enforceability of force majeure clauses in contracts, and the interpretation of business interruption insurance policies. Some potential claimants may have (quite sensibly) held fire on issuing legal proceedings to allow these cases to work their way through the system. For any businesses in this position, or who have tried but thus far failed to resolve ‘pandemic’ disputes without resort to court action, the next few weeks might well involve a scramble for legal advice!
Our Disputes team are experienced in advising on limitation issues and can mobilise to issue proceedings at short notice (although we generally do not encourage leaving court action to the last minute!)
Written By: Kirsten Magee
Kirsten Magee,
Legal Director Commercial Litigation
Email: kirsten.magee@davidsonmcdonnell.com
Direct Dial: 028 9099 1087