Limitation contract error was due to negligent advice

Watkins and another v Jones Maidment Wilson (a firm)

(Court of Appeal - 4 March 2008)

This case concerned an appeal by the claimants against a decision that a claim relating to their former solicitors, Jones Maidment Wilson, was statute barred.

JMW advised the claimants on a building agreement, dated 3 April 1998, pertaining to the construction of a new house, and also a clause that entitled them to terminate the contract if the project was not complete by 31 August 1998. The claimants agreed to waive this option on 6 August 1998.

A dispute ensued between the claimants and their builders and, on 26 August 2004, over six years from the date of the agreement and the decision to waive the option, the claimants issued proceedings against JMW on the basis that they had been negligently advised.

They argued that, because the agreement was not disadvantageous to them when it was signed - but only in September 1998 when an NHBC certificate was issued - limitation should run from that date. The court rejected this. If negligent advice had not been given, the claimants would have had the opportunity to negotiate a better agreement. The cause of action was complete at that point and claims relating to the April 1998 contract were time barred.

The second argument was that the cause of action in relation to the waiver only accrued on 31 August 1998, when the builders had failed to complete the property, and not on 6 August 1998 when the waiver was agreed. The court did not agree, holding that the right to terminate had a value before 31 August 1998 even though it could not be used before then. The loss to the claimants occurred on the date they agreed to waive the option and this was also barred.

Comment

Limitation dates in respect of building contract claims can be potentially complex and care should be taken to ensure that the correct dates are noted and recorded to avoid proceedings being issued out of time.

- Max Ekstein, BLM Manchester

This law report first appeared in Post Magazine on 10 April 2008

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