Tilbury Douglas case to complete the UK Supreme Court's Scottish time bar trilogy

The UK Supreme Court recently granted Tilbury Douglas’ application for leave to appeal against the Inner House of the Court of Session’s decision in Tilbury Douglas Construction Limited v Ove Arup & Partners Scotland Limited [2024] CSIH 15.

The case involves a dispute between the main contractor (Tilbury Douglas) and the designer (Arup) in relation to enabling works required to prepare a former railway yard near Haymarket Station in Edinburgh for development and concerns allegations that the Arup failed to exercise the relevant standard of care and skill in preparing the design for the enabling works for a Victorian-era tunnel. Tilbury Douglas was first employed in November 2013 in relation to the enabling works and Arup had been involved in the project as early as 2007.

The case was first raised in July 2019 and came before the Court for a preliminary proof where Arup argued that Tilbury Douglas’ claim against them had been extinguished by operation of the Scots law of prescription (or time-bar).

Prescription

Under the law of prescription, obligations are extinguished through the passage of time (similar to the law of limitation in England and Wales, although the laws operate very differently). This essentially means that if a party has a right to make a claim for breach of contract or for a delictual (tortious) wrong, they must use it within the prescriptive period or lose it altogether. In light of this, our advice to clients is to seek legal advice as early as possible after becoming aware of a potential claim and to remain conscious of this ticking clock.

Prescription is governed by statute, namely the Prescription and Limitation (Scotland) Act 1973, which has been amended by the Prescription Act 2018. Some of these amendments apply from 1 June 2022 onwards, with others only coming into force on 28 February 2025. (Essentially the 2018 Act has created two versions of the “discoverability test” about when time bar may be postponed, depending on whether or not a claim was extinguished by 31 May 2022.) Therefore, for claims raised prior to 1 June 2022 but which are ongoing (as large litigations and arbitrations can carry on over a number of years) the 1973 Act as it stood prior to these amendments may still apply. This is the case in the Tilbury Douglas dispute.

My colleagues Mark Kirke, Joanna Fulton, Jane Fender-Allison and Jennifer Neil have recently published an excellent overview of time bar in Scotland and the recent changes that have come into force.

Off to the Supreme Court

Arup argued that Tilbury Douglas’ claim had been extinguished by the operation of section 11(3) of the 1973 Act, which sets out when the prescriptive clock starts ticking. Tilbury Douglas argued that the clock was paused by the operation of section 6(4) of the 1973 Act, on the basis that they had been induced into error by the words or conduct of Arup.

Arup’s argument was rejected by the Outer House of the Court of Session (see Tilbury Douglas Construction Limited v Ove Arup & Partners Scotland Limited [2023] CSOH 53), who agreed with Tilbury Douglas that section 6(4) applied. Arup appealed to the Inner House (Scotland’s appellate higher court for civil matters), who overturned this decision and found that Tilbury Douglas’ claim was time-barred.

The UK Supreme Court will now consider the case, in particular the correct interpretation of sections 6(4) and 11(3) of the 1973 Act (as it stood before the amendments made by the Prescription Act 2018). These are significant provisions, as they affect when time bar starts to run and what periods may be discounted.

The UK Supreme Court has previously considered the application of prescription in Scottish cases, most recently in 2017 in Gordon’s Trustees v Campbell Riddell Breeze Paterson LLP [2017] UKSC 75, 2017 SLT 1287 2014, which followed its 2014 decision in David T Morrison & Co Ltd v ICL Plastics Ltd [2014] UKSC 48, 2014 SC (UKSC) 222.

When the UK Supreme Court decides the matter in Tilbury Douglas, it will complete this trilogy of decisions and will hopefully provide some eagerly- awaited clarity to the understanding of the interruption of the prescriptive period under the 1973 Act and potentially consideration of the meaning of “loss” even following the 2018 Act amendments.

At this time, no date has been set for the hearing of the appeal in the UK Supreme Court – so watch this space. For anyone wishing to keep track of progress on this case, you can do so on the UKSC’s website.

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