Prescription in Professional Negligence Cases

26 January 2011

Two recent decisions from the Outer House have seen discussion of the short negative prescription in the context of claims for professional negligence:  Pelagic Freezing Ltd v Lovie Construction Ltd [2010] CSOH 145 and Santander PLC v Allied Surveyors [2011] CSOH 13.

Both cases ruled that, once a plea of prescription is raised by the defender (or pars judicis by the court), the onus lies on the pursuer to aver and prove that his right of action has been preserved. This is a departure from the position adopted in previous Outer House authorities which had stated that the initial onus of showing that the prescriptive period had passed lay on the defender.

In Pelagic, the claim for damages against a firm of architects and planning supervisors was held to have been extinguished by prescription given that the action was raised 5 years and two months after the first appearance of damage, notwithstanding the fact that the initial damage was of a lesser degree than subsequent faults which emerged later. The date of concurrence of iniuria and damnum was the first date of emergence of damage, and later emergence of more serious problems did not mean that there was a later start date for the prescriptive period.

In Santander, the court required to consider the date of concurrence of iniuria and damnum in the context of a defective survey which led to money being advanced by way of secured lending. The question, which has been discussed in theory in various cases but rarely actually tested on the evidence, was whether the lender sustained loss on lending the money, or only on the borrower defaulting. On the particular facts in Santander, the court held that loss was sustained as soon as the money was advanced, with the result that the claim had prescribed.

In Pelagic, the pursuing building owners were represented by Sean Smith; the defending builders by Alasdair Duncan; and the defending architects by Roddy Dunlop QC - all of Axiom Advocates. Roddy Dunlop also represented the defending surveyors in Santander.