Understanding Section 32 of the Limitation Act
For claimants who missed the primary limitation period for bringing a claim, Section 32 of the Limitation Act 1980 may offer a solution. This section provides exceptions to the general six-year limitation period where there has been fraud, deliberate concealment, or mistake.
Our team of expert lawyers has extensive experience in navigating the complexities of Section 32 and can help you determine if your claim is still viable. For a free consultation, call us at 0207 459 4037 or book online through our online booking form below.
Key Highlights of Section 32
- The standard limitation period for bringing a claim is six years.
- Section 32 allows claims involving fraud, deliberate concealment, or mistake to be brought outside the standard six-year period.
- The 6-year limitation period starts upon the discovery of fraud, concealment, or mistake.
- Unlike some other limitation provisions, Section 32 does not impose a long stop date.
The General Rule
Under the Limitation Act 1980, the general rule is that a claimant must bring a claim within 6 years from the date on which the cause of action accrued. This six-year period applies to most claims, including breach of contract and torts such as professional negligence.
What is Section 32 of the Limitation Act 1980?
Section 32 provides exceptions to the standard six-year limitation period. It is designed for situations where the claimant could not have known about their cause of action due to the defendant’s actions involving fraud, deliberate concealment, or mistake.
Section 32(1) of the Limitation Act states:
“where in the case of any action for which a period of limitation is prescribed by this Act, either –
(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant; or
(c) the action is for relief from the consequences of a mistake;
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.“
How Section 32 Extends the Limitation Period
- Fraud: The limitation period does not begin until the claimant discovers the fraud or could have discovered it with reasonable diligence.
- Concealment: If the defendant has deliberately concealed relevant facts, the limitation period starts when the claimant becomes aware of those facts or could have discovered them with reasonable diligence.
- Mistake: If there is a mistake, whether of law or fact, the limitation period is postponed until the claimant discovers the mistake or could have discovered it with reasonable diligence.
No Long Stop Date
Unlike some other limitation provisions under the Limitation Act, Section 32 does not impose a long stop date. This means that there is no absolute time limit beyond which a claim cannot be brought, provided the fraud, concealment, or mistake has only recently been discovered.
Common Examples of Section 32 of the Limitation Act
Payment Protection Insurance (PPI) Mis-selling
Mrs. Potter took out a loan with Canada Square Operations Ltd in 2006, which included a PPI policy. She did not know that over 95% of the PPI premium was taken as commission by the lender. She discovered this only in 2018. Under the standard six-year limitation period, her claim would be time-barred. However, under Section 32(1)(b), the limitation period starts from the date of discovery in 2018, allowing her to bring a claim for the mis-sold PPI (Canada Square Operations Ltd v Potter).
LIBOR Manipulation
A business entered into a loan agreement based on interest rates pegged to LIBOR, which was later discovered to have been manipulated. The manipulation was not public knowledge until 2012. The High Court held that a reasonably diligent person would have discovered the fraud by 2013 when the Financial Services Authority (FSA) published its findings. Thus, a claim brought in 2019 was time-barred (Boyse (International) Ltd v NatWest Markets Plc).
Energy Mis-selling
Although specific case law on energy mis-selling under Section 32 is less common, similar principles apply. For instance, if a small business was sold an energy contract based on fraudulent misrepresentations about future energy prices, and the fraud was discovered during a financial audit five years later for example, Section 32 would allow the business to bring a claim from the date the fraud was discovered, rather than from the date the contract was signed.
How Does Section 32 Affect Limitation Periods?
Section 32 changes the standard limitation periods under the Limitation Act 1980. Generally, the Act imposes a six-year limitation period for most claims. However, Section 32 can significantly extend this period in cases involving fraud, concealment, or mistake.
Key Points to Remember:
- Discovery Rule: The limitation period starts when the claimant discovers or could reasonably have discovered the fraud, concealment, or mistake.
- Reasonable Diligence: Claimants must show they could not have discovered the issue earlier through reasonable diligence.
- Six-Year Extension: The extension provided by Section 32 is typically six years from the date of discovery.
- No Long Stop Date: There is no absolute time limit for bringing claims under Section 32, provided the fraud, concealment, or mistake has only recently been discovered.
FAQs About Section 32 of the Limitation Act
1. What constitutes “reasonable diligence”?
Reasonable diligence means taking appropriate steps to investigate potential issues. It does not require extraordinary efforts but involves a reasonable level of inquiry based on the circumstances.
2. Can Section 32 apply to professional negligence claims?
Yes, Section 32 can apply to professional negligence claims if the professional’s actions involved fraud, deliberate concealment, or mistake. For instance, if an accountant conceals errors in financial statements, Section 32 may extend the limitation period for bringing a claim.
3. How do courts determine the date of discovery?
Courts consider the specific facts of each case to determine when the claimant discovered or could have reasonably discovered the relevant issue. This includes evaluating the claimant’s actions and the information available to them.
4. What should I do if I suspect fraud, concealment, or mistake in my case?
If you suspect that your claim might be affected by fraud, concealment, or mistake, it is essential to act quickly. Start investigating potential issues as soon as possible and keep detailed records of any efforts to uncover the truth. Our expert lawyers are here to help so please do not hesitate to call us for a Free Consultation today on 0207 459 4037 to discuss your case.
5. Can Section 32 be applied retrospectively?
Yes, Section 32 can apply retrospectively, meaning that if the fraud, concealment, or mistake is discovered after the standard limitation period has expired, the limitation period can still be extended from the date of discovery.
6. Are there any specific cases involving energy mis-selling?
While specific cases on energy mis-selling under Section 32 are less documented, the principles applied in other fraud and concealment cases can be analogous. Each case will depend on its facts and the evidence available.
Case Law on Section 32 of the Limitation Act
Canada Square Operations Ltd v Potter (2023)
This case involved a claim for the mis-selling of PPI. The Supreme Court ruled that Canada Square’s deliberate non-disclosure of commission from the PPI policy amounted to deliberate concealment. The Court emphasized that “deliberate” meant intentional, rejecting the notion that recklessness sufficed. This decision clarified the interpretation of deliberate concealment under Section 32.
Cave v Robinson Jarvis & Rolf (2002)
In this landmark case, the House of Lords considered the application of Section 32 to claims involving solicitors who had negligently drafted a deed. The court ruled that deliberate concealment under Section 32 requires some deliberate wrongdoing, and mere negligence is insufficient. This case highlights the importance of distinguishing between negligence and deliberate concealment.
Boyse (International) Ltd v NatWest Markets Plc (2021)
This case involved a claim for fraudulent misrepresentation related to LIBOR manipulation. The High Court held that a reasonably diligent person would have discovered the fraud by 2013 when the Financial Services Authority (FSA), as it was then known, published its findings. Consequently, the claim brought in 2019 was time-barred.
Free Consultation with Expert Litigation Lawyers in London
Section 32 of the Limitation Act 1980 provides a crucial opportunity for claimants who have missed the primary limitation period due to fraud, concealment, or mistake. By extending the limitation periods, it allows claimants to seek redress even when the standard limitation periods have expired.
If you suspect that your claim might be affected by fraud, concealment, or mistake, it is essential to act quickly and seek legal advice. For more detailed advice on how Section 32 might apply to your case, or if you suspect fraud, concealment, or mistake in your dealings, contact us today at 0207 459 4037 or through our online consultation booking form.
