This chapter considers the defence of limitation in regard to an action for compensation for breach of trust, which are governed by the Limitation Act 1980. Actions normally have to be brought within a six-year limitation period, though there are exceptions such as fraud, where no limitation period is imposed. The related doctrine of laches (unreasonable delay) is also explored. It also considers those provisions as they apply to actions against fiduciaries who have received an unauthorized profit, which has proved more difficult because the legislation does not make any express provision for such claims. A failed attempt at legislative reform of the operation of limitation periods by the Law Commission is also explored.
Chapter
36. Limitation of action
Chapter
20. Limitation of Actions
Jack Beatson, Andrew Burrows, and John Cartwright
At common law, lapse of time does not affect contractual rights. But it is the policy of the law to discourage stale claims because, after a long period, a defendant may not have the evidence to rebut such claims and should be in a position to know that after a given time an incident which might have led to a claim is finally closed. Accordingly, in the Limitation Act 1980, the Legislature has laid down certain periods of limitation after the expiry of which no action can be maintained. Equity has developed a doctrine of laches, under which a claimant who has not shown reasonable diligence in prosecuting the claim may be barred from equitable relief.