Karen Cornwell: Prescription – an update
In the recent case of Tilbury Douglas Construction Limited v Ove Arup & Partners Scotland Limited CA117/21  CSOH 53 the issue of prescription was revisited by Lord Harrower at a preliminary proof, writes Karen Cornwell.
By way of background, the ongoing case involves the development of a former railway yard at Haymarket Station in Edinburgh. Prior to development the ground level required to be lowered. This required certain works to ensure that the neighbouring tunnels were not compromised and that the design element was acceptable to Network Rail.
In November 2013, the pursuer was employed to carry out enabling works. The defender was appointed to carry out engineering and design works. In this action it was claimed, by the pursuer, that the defender was in breach of their contractual and delictual obligations in exercising the relevant standard of skill and care in preparation of the design as a consequence of which the design allegedly required to be resubmitted at expense.
It is claimed that the defender’s design adopted erroneous assumptions for the strength and stiffness of tunnel brickwork, failed to take into account the likely presence of voids within and behind the lining of the north tunnel, and failed to make allowance for the need for annular and interstitial grouting to address those matters.
When the case recently called for a preliminary proof, on prescription, it was conceded, by the pursuer, that it had suffered loss and damage, for the purposes of section 11(3) of the Prescription and Limitation (Scotland) Act 1973 as at 27 November 2013. i.e. when the pursuer entered into the contract in reliance on the defender’s design.
As a matter of fact, the pursuer’s contract was already, on that date, worth less than it would have been but for the defenders alleged breach of duty. This is in line with the cases of Morrison, Gordons Trs, Midlothian etc. The summons was served on 30 July 2019. As such, the pursuer’s rights would ordinarily prescribed under the five-year prescriptive period.
Whilst Lord Harrower accepted that the pursuer was aware of delayed works i.e. potential loss in May/June 2014 it was not sufficient in concluding that the pursuer, exercising reasonable diligence could have discovered the error that induced it to raising court proceedings. Rather, it was held that the alleged errors were in respect for an extensive redesign and the need for grouting that induced the pursuer the pursuer from taking legal action and as such was entitled to rely upon section 6(4) of the 1973 Act. As such discounting the period up until the end of November 2014 as part of the prescriptive period. Reasonable diligence for the purposes of section 11(3) relates to the awareness of loss. Reasonable diligence for the purposes of section 6 (4) relates to the discovery of error. They are entirely different tests.
This is an interesting case and good news for parties as it provides clarity on section 6(4) and the necessary requirements to meet the necessary test.
On disposal Lord Harrower allowed a proof before answer on all averments on record other than those relating to prescription.
Karen Cornwell is a legal director at Thorntons