What is prescription/time bar?

The law of prescription is the set of legal rules in Scotland which governs whether obligations and claims are extinguished if too much time has passed before proceedings are raised. It is governed by the Prescription and Limitation (Scotland) Act 1973 (referred to here as the 1973 Act), as now modified by the Prescription (Scotland) Act 2018 (the 2018 Act).

For damages claims, the applicable period is usually the five-year rule. In broad terms, a claim must be raised in court or arbitration, or formally acknowledged in writing, within five years of becoming enforceable. If not, the underlying obligation, and thus the right to claim, may be lost.

What is the problem?

As readers may know, following upon two decisions of the UK Supreme Court in Scottish appeals, many claimants seeking damages for latent defects in construction works have been told that their claims in that connection are time barred (prescribed).

While the position is complex, this is because, in essence, the combined effect of the two UK Supreme Court cases was that section 11(3) of the 1973 Act, which deals with when the five-year prescriptive period starts to run, had been wrongly interpreted for about 40 years. The effects of the application of those decisions on Scottish construction cases are still being felt in 2026 and will be for years to come.

What does the legislation say?

Time bar law (prescription) is governed in Scotland by the 1973 Act. The controversial section of the 1973 Act in the context of claims for latent damages is section 11(3). Stated shortly, a claim, such as a claim for damages arising out of latent defects in the design or construction of a building, has to be made in court proceedings or arbitration (or be relevantly acknowledged) within five years of the claim becoming enforceable or else, as a general rule, the right to claim will be lost.

Importantly, section 11(3), as it was originally interpreted, was understood to mean that there was a necessary element of what many referred to in shorthand as ‘discoverability’, i.e. the prescriptive period did not start to run until the date a person discovered or with reasonable diligence could have discovered not only that they had sustained loss, injury or damage but also that that loss had been caused by an act, neglect or default.

This was of crucial importance in the area of latent defects in construction works, given that they may not be apparent even upon a detailed visual inspection, may be in work that is covered up and thus not readily accessible and, accordingly, may not in fact come to light until years after the relevant construction works were carried out. For example, a building may be completed in 2018. At that point all looks in order. However, in 2024 cracks start to emerge in the superstructure of the building. Investigations are undertaken and in 2026 it is discovered there is a defect with the foundations.

Why hidden defects cause problems

Latent defects are not all the same. A latent defect in the design or construction of a building may not result in any observable, physical damage. Construction works can be inherently defective even if there is no physical sign of a problem, for example, when the wrong type of cladding is installed on the exterior of a building which is, in fact, a major fire hazard and endangers human life because it does not meet relevant building standards.

By contrast, in some cases, a latent defect might, eventually, give rise to actual physical damage to property, for example, where foundations have been defectively designed or constructed and as a result, over time, the forces produced cause cracks to appear in the superstructure of the building - the example given above.

However, as a result of UK Supreme Court decisions, the discoverability element of the test for commencement of the five-year prescriptive period was substantially altered. The practical effect of the Supreme Court’s rulings was that the clock could start running before the claimant knew the defect was caused by someone else’s fault or breach of contract. It could be enough that the claimant knew they had paid money or had not received what they expected.

The Court determined that - notwithstanding the acknowledgement that section 11(3) was intended to address latent damage - the relevant provision does not postpone the start of the prescriptive period until a claimant is aware actually or constructively that he or she has suffered a detriment in the sense that their loss was suffered as a result of the negligence or default of a prospective defendant. It is sufficient simply that the claimant is aware that he or she had not obtained something sought or had incurred expenditure.

So, to take the foundation example already referred to: the cracks only started to emerge in 2024, but by that time it might already be too late for any potential claimant to bring an action against a potential wrongdoer, for example a designer. Payments had been made for work done and expenditure had thus been incurred on the basis of a negligent design. The incurring of that expenditure can constitute a loss.

As one might imagine, the removal of the discoverability test attracted significant and at times adverse commentary. Its application to latent damage in construction cases was of particular concern and it did not take long for that issue to come before the Courts. We do not propose to rehearse the outcome of those cases here. Suffice to say that one of the undoubted features of some of these cases is that, thus far, the Scottish courts have taken the view that as soon as there is known expenditure, which with the benefit of hindsight, did not result in what was anticipated because of defective performance, say by a consultant or a contractor, section 11(3) is of no real assistance in delaying the start of the prescriptive period.

This is important in the construction sector because expenditure by way of payment is normally incurred to consultants or contractors for work as it is carried out which, in larger construction projects, can be years before all the works are completed and, importantly, before the payer has any reason to believe that there are latent defects in the works as designed and/or constructed.

Put another way, the Court’s interpretation of section 11(3) can (and has) resulted in a position where obligations to pay damages to innocent parties for latent defects in the design or construction of a building can prescribe before the claimants were aware that they existed.

What changed in the law?

As a result of those decisions, the Scottish Law Commission undertook a review of when the prescriptive period should start to run and why. The outcome of that review was that a revised test reintroducing an element of discoverability was proposed. The test recommended by the Law Commission was adopted and section 11(3) of the 1973 Act was amended, by the 2018 Act, to reflect that.

The revised section 11(3) provides that the five-year prescriptive period does not start to run until a person is aware, or with the exercise of reasonable diligence, could be aware of three facts, namely:

(a) that loss, injury or damage has occurred;

(b) that the loss, injury or damage was caused by a person’s act or omission; and

(c) the identity of that person.

The statutory changes made clear that it does not matter that a person does not know that the act or omission that caused the loss, injury or damage is ‘actionable in law’. Whether it is actionable in law involves knowledge of the law rather than matters of fact. However, knowledge of the three facts noted above (actual or constructive) is essential.

It is safe to say that following the adoption of the changes to section 11(3) lawyers advising the construction sector, initially at least, breathed a sigh of relief. It was anticipated that the mischief created by the cases referenced above had been addressed. Unfortunately, that relief has been short-lived.

Why the Ogilvie decision matters

The recent decision in the cases of Ogilvie Construction Limited v M1 RE Glasgow Limited and Ogilvie Construction Limited v Leach Rhodes Walker Limited (‘Ogilvie’), Revised Opinion, 6 May 2026, which were dealt with together, involved claims arising out of defects in the construction of a building.

The two defects related to cladding and cavity barriers and, somewhat unusually, the fact that the cladding was defective was known during the carrying out of the original construction works. The case is of interest because Ogilvie is believed to be the first time where the new section 11(3) as amended has been judicially considered. It was section 11(3) as amended which applied to the matters in Ogilvie.

The decision was that the obligations which the claims sought to enforce had prescribed. It is very important to note, however, that the decision was reached after hearing evidence and the case turned very much on its own facts. Nonetheless, in that case, the judge’s view appears to have been that the wording used in section 11(3) as amended does not achieve the result on discoverability desired by the Scottish Law Commission as subsequently backed by the legislation which amended section 11(3).

If that is correct, and a number of commentaries on Ogilvie have already appeared which indicate that is how the judge’s decision is being interpreted, it is a very worrying development for those within and outwith the construction sector in Scotland.

At the very least, it introduces yet further and highly unwelcome uncertainty into the Scots law of prescription about the proper interpretation of section 11(3) as amended, particularly against the background of the problems caused by the application of previous UK Supreme Court cases involving section 11(3) in its unamended terms.

Whilst this case very much turns on its own facts and is only the view of one judge and not binding upon other judges, it does cause renewed and unwelcome uncertainty which is likely to lead to further disputes.

What should you do?

The risk remains that a claim for hidden defects may be time barred before the building owner knows enough to bring it. So, no matter where you sit in the contractual chain early action is vital. Consider the following practical tips:-

• investigate potential defects as soon as concerns arise;
• keep clear records of when issues were first identified;
• record who may be responsible;
• do not wait until the full technical picture is clear before considering time bar;
• take legal advice early.

Jennifer McKay, partner at MFMac, and David Thomson KC of Axiom Advocates will be speaking on the topic of prescription at the Scottish Construction Summit.

If you’re interested in hearing more on this and other topics impacting on the construction sector please come along and join us at the Scottish Construction Summit on 22 October 2026 to hear more from our experts.