No time like the present - Bring professional negligence claims in a timely manner

Most claims have to be commenced within set time limits otherwise they become statute barred pursuant to the Limitation Act. For instance, breach of contract claims will need to be bought within 6 years of the date of the breach of contract. Professional negligence claim are no different and a recent Court of Appeal case emphasised the importance of bringing claims within time.

In the case of Bridging Loans Limited v Toombs [2017] EWCA 205, the Court said that where a lender dealing with a default situation waited too long for possession or other recovery proceedings to play out, any potential claim in negligence against a professional adviser, such as the Valuer in the original transaction, will become time-barred if not bought within the applicable limitation period.

The Valuer in this case provided a valuation of a property at £730,000 on 2 November 2006. The Lender made a bridging loan of £502,750 on 3 November 2006 to the borrower which was repayable in full after 6 months. The borrower defaulted on the loan and the property was sold in possession. The Lender, inevitably, suffered a loss on sale.

The Lender claimed the Valuer had provided a negligent over valuation alleging the property at the time of the transaction was only £450,000. The Lender issued its claim in negligence against the Valuer on 16 May 2013.

The Court of Appeal said that the burden to prove limitation lay with the Lender and as they had not provided any evidence of the borrower’s ability to make repayments and indeed the borrower had not made any repayments, the limitation period was 6 years from the date of default. It was noted in the Court that the Lender had sent a preliminary notice of claim and letter of claim to the Valuers which showed that it had knowledge to bring a claim more than three years before the Claim was in fact issued.

This perhaps begs the question as to whether the Lender had a potential claim against its advisors in the claim against the Valuers for not issuing within time. A possible further issue of professional negligence.

It is essential that if you have a potential claim against professional advisers that you take advice as soon as possible to avoid problems with Limitation. Seek an early assessment of your claim.

If you want expert advice on any potential claim, please do not hesitate to contact us.