Prescription and limitation – when should you bring a claim?

Like many jurisdictions, Guernsey implies a time limit by when a litigant must bring its claim in the Guernsey courts. 

This is to limit the opportunity for parties to bring a claim over a historic event and provide certainty to potential parties to litigation. 

Different time limits apply to different types of claim.

In Guernsey law, this limit is called “prescription” and it has its origins in the island’s customary law. 

Prescription extinguishes the right to bring a claim. Because Guernsey prescription extinguishes a right, it is a matter of substantive law.

Substantive law is the set of laws that govern how members of society are to behave. It is contrasted with procedural law, which is the set of procedures for making, administering and enforcing substantive law.

Prescription is different to the English concept of “limitation” which simply bars the right of a party to seek a particular remedy.

Limitation is a matter of English procedural law and accordingly it can be extended or altered if agreed between the parties. It is possible for the parties to a dispute to agree to extend the limitation period by them entering into a “standstill” agreement.

However, save as discussed below, standstill agreements are not commonly used in Guernsey. Although the issue has not been tested in the Guernsey courts, there is a strong argument to say that a standstill agreement cannot be effective because it is not possible for parties to change a matter of substantive law. Once the right to bring a claim is extinguished, it is lost.

General periods

The prescription period depends on the type of claim being brought. The key prescription periods under Guernsey law are:

• A claim for breach of contract: 6 years from accrual of the cause of action;
• A claim in tort (e.g. negligence): 6 years from accrual of the cause of action;
• A claim for personal injury or death: 3 years from accrual of the cause of action or knowledge (but the court has to power to overrule this, see below);
• Breach of trust: 3 years from the date of knowledge; and
• Rights in realty (ownership of land) 20 years from the date of the action arising.

Personal Injury and Death

However, a slightly different position to that discussed above arises under the Law Reform (Tort) (Guernsey) Law, 1979 (the Tort Law).  Interestingly, this law refers to “limitation” rather than “prescription”.  Section 8 of the Tort Law gives the Court discretion to extend the 3 year period for bringing a claim for personal injury or death if it is satisfied that it is equitable to do so.  Section 8 of the Tort Law provides a number of factors to which the court should have regard such as the reason for the plaintiff’s delay, the defendant’s conduct and the effect of the delay on any evidence. 

The ability to extend the period in which the Plaintiff must bring their claim (in claims for personal injury or death only) contrasts with the concept that prescription extinguishes the right to bring a claim. 

In the case of Holdright Insurance Company Limited v Willis Corroon Management Guernsey Limited [2000], the Deputy Bailiff confirmed that his view was that the Guernsey legislature had intentionally adopted different terminology in the Tort Law (as applying to death and personal injury) to apply the common law position in England rather than the customary law doctrine of prescription.

This means that statute has intervened to change the customary law and create a self-contained regime for personal injury and death.

Empêchement

Separately to the extension regime under the Tort Law, there is a customary law principle known as empêchement, which operates to suspend time in circumstances where a claim would be extinguished by prescription. 

Empêchement allows a party to argue it can bring a claim out of time because there was a practical impediment in place, which prevented that party from bringing a claim earlier. Empêchement does not frequently arise in modern practice and its precise operation is uncertain.

Determining the prescription period

Establishing the correct prescription period for a claim is not always straightforward.  In certain circumstances, the prescription period may not commence until the party has knowledge of a particular issue, even though that may be some time after the cause of action arose.

In circumstances where a claim may have arisen, we strongly recommend seeking the advice of an advocate at the earliest opportunity to protect that position and prevent the claim from becoming prescribed.  It is often possible to issue proceedings to protect that position whilst seeking a resolution with the other party.