PracticeConsultingCourt rulings ‘lift’ time limit on claims

Court rulings 'lift' time limit on claims

Accountants have been warned they could face a host of claims 'rising from the dead' following recent Court of Appeal and High Court decisions.

According to insurance law firm Reynolds Porter Chamberlain, the decisions mean professional firms and their insurers could find no effective time limit exists on claims to protect them.

Under the Latent Damage Act 1986 claims are barred 15 years after the event happened unless any fact had been deliberately concealed, defined as a deliberate commission of a breach of duty.

But according to RPC a recent Court of Appeal case, Brocklesby v Armitage & Guest, reinterpreted this to lift the time bar on all acts deliberately done that caused a breach of a professional’s duty of care. This interpretation was confirmed by a High Court case, Liverpool Roman Catholic Archdiocese Trustees v Goldberg 2000.

Jonathan Davies, a partner at RPC, said: ‘Any act will always be deliberate. If it was negligent that amounts to a breach of duty.

He added: ‘For professional firms it could mean a host of claims rising from the dead. Retired professionals will have to maintain run off cover for the rest of their lives.’

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