The recent case of Tilbury Douglas Construction Limited v Ove Arup & Partners Scotland Limited CA117/21 [2023] CSOH 53 saw the issue of prescription come before Lord Harrower in the Outer House.

Background

At the heart of this case is a complex multi-faceted construction dispute. This action, which will now proceed to proof, concerns the development of a former railway yard located to the east of Edinburgh’s Haymarket station. Before the development could begin, the ground level of the development site required to be lowered, by removing up to 6m of soil. That required certain enabling works to be carried out, to ensure that the material could be safely unloaded without compromising the integrity of the neighbouring tunnels. The design also required that any movement of the neighbouring tunnels would be acceptable to Network Rail. The design required to be altered and resubmitted for approval resulting in the pursuer incurring irrecoverable costs.

The pursuer’s argument

The pursuer conceded that it had suffered loss and damage, for the purposes of section 11 (1) of the Prescription and Limitation (Scotland) Act 1973 (the “Act”) as at 27 November 2013. The summons was served on the defender on 30 July 2019 by which time the pursuer’s rights would ordinarily have prescribed under the usual five-year prescriptive period. The sole issue for preliminary proof was whether the start of that period should be postponed. The pursuer argued it should be postponed until November 2014, at the earliest, since that was the date when it first became aware, or could with reasonable diligence have become aware, that it had suffered loss per section 11(3) of the Act as a result of the defender’s negligence.

Alternatively, the pursuer argued that the whole of the period between November 2013 and November 2014 should be discounted from the prescriptive period, thus relying on section 6(4) of the Act. The inducing words or conduct by the defender were that they had produced a competent design. The pursuer relied on the defender’s presentation of its design and its associated invoice as well as its ongoing assurance from August 2013 until around September 2014. It was only in late November that the defender advised that full grouting would be required.

The defender’s argument

The defender argued that the pursuer’s case hinged upon a single allegation of the fault being the provision of a defective design and the pursuer had knowledge of costs/delays pertaining to that design in March/April 2014 – the summons having been served in July 2019 more than five years later, the pursuer’s right of action in respect of all such losses had prescribed. Additionally, the defender argued that the pursuer could not be rescued by s 6(4) because the defender’s design was always liable to change as a result of any demands made by Network Rail. In any event, any error could have been discovered by the pursuer by the application of reasonable diligence. The pursuer could not be relieved of the obligation to exercise reasonable diligence merely by virtue of the fact that the defender continued to endorse the validity of its own design.

The court’s decision

In relation to s11(3) time starts to run from when the pursuer was aware or could have, with reasonable diligence, become aware, of loss – however it doesn’t also need to be aware that the loss was caused by any breach of duty alleged. The court went on to make a distinction between a “risk of the contractual arrangements” and breach of duty. Costs and delays are not therefore necessarily losses arising from breach of duty – there may be a distinction between them.

Ultimately the court held that for the purposes of s11(3) time started to run from when the enabling works were delayed due to the impact that the core results had on Network Rail, making May/June 2014 the date for which the court found the pursuer to have been actually (and constructively) aware of loss that arose from breach of duty alleged.

In relation to the pursuer’s s6(4) argument, the court held that, as the defender had given reassurances as to its design, the pursuer had no cause to believe that it had any remedy against the defender in respect of the need for extensive redesign (and resulting delay and costs).

The court rejected the defender’s argument that the pursuer could not rely alone on continued assurances. The court found that it was not a simple bare assertion that the design was not deficient, but that the pursuer had continued to rely upon the defender’s services.

The court held that the pursuer was entitled to rely on s6(4) in relation to all its pleaded breaches, and the period up to November 2014 was thereby discounted for purposes of the prescriptive clock.

A more promising outlook for pursuers?

There are several takeaways from this judgment. It offers a careful consideration on how s11(3) and s6(4) operate in circumstances where the claim is complex and multifaceted. In particular, the court’s interpretation of the legislation provides a slightly more flexible position for pursuers who pursue claims under the interim prescription provisions.

The decision regarding the operation of s6(4) is also potentially helpful to pursuers, again providing a more flexible position. The continued reliance on services from the allegedly negligent professional may be the case in many professional negligence claims, although it’s important to remember here that continued reliance on a defender’s services alone is not sufficient. A denial of liability for a claim will not be enough either, but in those cases where, as a matter of fact, a professional has been found to reassert its advice and provide reassurance which goes beyond a denial of liability, this judgment provides a potential route to postpone the start of the prescriptive period.

Given the importance of the issues which are discussed in this judgement, we are keeping a keen eye on whether or not this will be the final word on matters.

Our specialist professional negligence team have experience dealing with all aspects of pursuing and defending professional negligence claims, including complex prescription issues. Please get in touch if you would like to discuss how we can help.

For a more in-depth summary of the case, please click here.

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