What is the statute of limitations?
‘Statute of limitations’ is a general term for the law that sets time limits within which legal proceedings can be brought in court – ie ‘limitation periods’.
Different limitation periods apply to different types of legal claims. Once the time limit for a specific claim has passed, it is no longer possible to initiate a court case based on that claim as it will be deemed ‘out of time’ or 'statute barred'.
Limitation periods stop claims from being brought after too long a time has passed since the event that prompted the claim. Their purpose is largely to ensure fairness on both sides of a legal claim. For example, if a matter is brought to court after a long delay, evidence and witnesses accounts may be harder to solidly establish and the claimant’s (ie the person bringing the claim’s) motivations for not bringing the claim earlier could be dubious (eg a business tactic). Limitation periods are different for different types of claims to try to balance what’s fair between the parties to a claim in different types of situations.
In England and Wales, the key legislation that sets out limitation periods is the Limitation Act 1980. Some limitation periods are also imposed by other legislation, for example, specific periods applicable to some employment, tax, and criminal matters.
When does a limitation period start?
Limitation periods usually start from the date of the 'cause of action', ie when the thing that gives rise to a claim occurred and this became known. For example, when a contract was breached or a negligent act occurred.
Some limitations will have a more specific starting point. For example, for claims under the Consumer Protection Act 1987 in relation to defective products, the limitation period is three years from the date of knowledge, ie from when a defect became known rather than when it was created.
What are key limitation periods relevant to businesses?
In England and Wales, some of the standard limitation periods most likely to relate to legal issues that small and medium business (SMEs) might have include:
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for simple contract claims: six years – this covers claims related to breaches of simple contracts (as opposed to agreements made more formally via deed), including some types of loan repayment claims
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claims regarding contracts made by deed: 12 years – contracts made by deed (or ‘executed under seal’) are considered to be more formal than simple contracts, therefore, a party generally has longer to bring a claim if such a contract is breached
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tort claims: six years – these are claims regarding a 'civil wrong', ie a situation in which one person unfairly causes another loss or harm. A common tort is the tort of negligence. Some types of tort claims have shorter limitation periods (eg defamation claims, which have a period of one year)
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personal injury claims: three years – personal injury claims are those relating to injury or illness suffered by an individual
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data protection claims: six years – these are claims for compensation made under the UK General Data Protection Regulations (GDPR)
For each of the limitation periods above, exceptions may apply in certain circumstances. If you’re considering starting a legal claim, before you start you can obtain advice from a lawyer on the merits of your claim to make sure pursuing a claim is worth the trouble.
Additional details for key types of claim
Some types of claims in England and Wales have a standard limitation period alongside a more complex set of rules that determine when this standard limitation period does or does not apply or when it starts running. For example, for claims regarding:
Debt recovery
Limitation periods are vital for debt recovery. As a general rule, a creditor (ie a party that lends another money) has six years to recover most types of unsecured debts (ie where no security or collateral, eg a house, was taken to secure the debt in case it is not repaid) or 12 years for some mortgage debts.
The limitation period for debts generally begins from the point at which an individual (or business) falls into arrears or fails to make a repayment. Where a loan is made but there’s no set due date for repayment, the limitation period generally starts when a demand for payment is made. Lenders or creditors should document the stages of debt so that there is a record of the cause of action (ie a failure to pay) if needed.
For more information, see our legal documents and guidance for Debt recovery.
Personal injury
The limitation period for personal injury claims is typically three years from the date of the injury or diagnosis of illness or the date that the injured person becomes aware of their injury or illness (whichever comes later). This limitation period generally also applies to claims for compensation made when a defective product causes damage, injury, or death.
Medical negligence
For claims related to negligence in medical settings, the limitation period is generally three years from the date the negligence occurred or the date the claimant became aware that the treatment they received caused them injury due to potential medical negligence, whichever comes later. Exceptions can apply in specific circumstances, for example, in situations involving children or somebody who has a mental disability.
If someone dies as a result of medical negligence, dependents of the deceased can make a claim. In this case, the limitation period generally runs from the date of death, as long as the initial limitation period that applied before death had not already expired when the individual died.
Construction
As for general simple contract claims, the limitation period for claims related to construction defects is usually six years. However, this can be extended to an overall maximum of 15 years in certain situations (eg time can be added on if damage is discovered after a period of latency).
Defamation
A defamation claim must normally be brought within one year from the defamatory statement being made. However, the courts may choose to extend this time limit in certain circumstances if a 'reasonable' delay has occurred (eg if the defamed party did not discover the defamatory remark until a year after it was made).
For more information, read Defamation.
Statute of limitations in Scotland
In Scotland, contracts are subject to prescription and so limitation periods are also referred to as prescription periods. Prescription is primarily regulated in Scotland by the Prescription and Limitation (Scotland) Act 1973.
The Five year prescription period
A standard claim for breach of contract in Scotland generally has a five-year prescriptive period. So, claims for damages for breach of contract can be brought within five years from the date that the claimant knows about the loss and its cause connected to the breach of contract.
The 20-year prescription period
In addition to the five-year prescription period, a 20-year period is applied as a ‘long stop’. This means that there is an absolute time limit on when claims can be made (ie even when an extension may otherwise have been allowed due to a lack of knowledge of a loss, a claim made beyond 20 years is generally not possible).
Alternative prescription periods
As for England and Wales, some specific alternative limitation periods apply to specific situations in Scotland. For example:
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personal injury claims in Scotland must be brought within three years of an accident
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defamation claims in Scotland should be brought within one year (until August 2022, a three-year period applied)
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product liability claims in Scotland may generally be brought within ten years
Navigating the legal rules on settling disputes can be complex. If you’re considering starting a legal claim or need to defend one, our dispute resolution service can help.
