Report on the Statutes of Limitations: Claims in Tort and Contract in respect of Latent Damage

By Órla Gillen, Wednesday, 21st March 2001 | 0 comments
Filed under: 2001.



Press Release

Report on the Statutes of Limitations: Claims in Tort and Contract in respect of Latent Damage

This Report examines the law relating to the Statutes of Limitations in non-personal injury cases where the loss is latent. Latent damage is loss or damage which is not immediately obvious to the ordinary person. Often it is a number of years after the damage actually occurs before an ordinary person could be expected to be aware of it. Examples of latent damage are: cracks in the foundations of a building; a negligently executed conveyance; a carelessly drafted document; and negligent financial advice.

Currently, under the Statute of Limitations Act, 1957 a person must commence proceedings within six years from the date the damage took place. So if there was a crack in the foundations of a house in 1990, the owner would have had until 1996 to take an action against the builder or the architect. After 1996 the owner would  not have been able to bring the action as the claim would have been statute-barred.

The Commission is of the view that the present law can lead to much injustice and hardship. To remedy this, where the damage has not become apparent until a time which would be too late under the present law, it is proposed that there should be an alternative period of three years starting at the time when a reasonable person ought to have known that the damage had occurred.

The Commission, however, also felt that it is unreasonable to expect builders or professionals to keep records indefinitely and to take out insurance against such claims for an indefinite period of time. Therefore the Commission recommends that irrespective of when the person could have known of the damage there should be a cut off period or "long-stop" after which no claim can be brought. This period would run for 10 years from the date that the damage occurred

Under the present law, a limitation period is suspended if the person is under a legal incapacity before the damage occurs. A person is defined as being under a legal incapacity if they fall into such categories as: "an infant" or a person of "unsound mind". The Commission has recommended replacing "unsound mind" with the following more modem and comprehensive  definition:  "where a person is incapable of the management of his affairs because of disease or impairment of physical or mental condition".

Annexed to this Report is a draft Bill, which implements the recommendations set out in the Report. The practice of drafting legislation is an innovation on the part of the Law Reform Commission and is designed to facilitate speedier implementation of its Reports.