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Supreme Court provides guidance on timebar rules for latent damage

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Supreme Court provides guidance on timebar rules for latent damage

01 August 2014

In David T Morrison & Co Ltd v ICL Plastics Ltd [2014] UKSC 48, the Supreme Court has given guidance on the time bar rules for latent damages claims.

Morrison owned property which had been damaged in the Stockline Plastics factory explosion in May 2004.  In August 2009, they brought proceedings claiming damages. 

Under the Prescription and Limitation (Scotland) Act 1973, the time limit for bringing the claim was five years.  But the courts had interpreted section 11(3) of the Act to mean that the five years only began once the pursuer knew (or should have known) that his loss was actionable. 

On that basis, Morrison said that the action had been raised in time – although it knew immediately that it had suffered loss, it could not know the cause of the explosion until later.

Lord Woolman held that the case was timebarred because fault could be inferred from the very fact of the explosion, on the day it took place.  The Inner House disagreed, and reversed his decision.

However, the Supreme Court has now held (overruling a line of earlier cases) that section 11(3) is only concerned with whether the loss is discoverable, and is not concerned with knowledge of the cause.  On that basis, the claim was timebarred. 

The decision marks a major change in the approach of Scots law to claims for latent damages.

Axiom member Richard Keen QC acted for the appellant ICL Plastics, and Axiom member Paul O’Brien acted for the respondents.

The full judgment is available at