Latent Damage Act 1986: what it did and why it still matters

Category: Limitation and liability · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~6 min read

The problem it was written to solve

Damage caused by negligent design, construction or advice often does not announce itself. A defective foundation, a mis-drafted deed or a flawed structural calculation can sit undiscovered for years. Under the ordinary six-year period in section 2 of the Limitation Act 1980, time runs from when the cause of action accrues — which, in tort, is when damage occurs, not when anyone notices it. The result was that claims could be time-barred before the claimant had any realistic means of knowing they existed.

Parliament’s answer, following the Law Reform Committee’s work in the 1980s, was the Latent Damage Act 1986. It is a short Act, and most of its practical effect is delivered through amendments to another statute.

What the Act actually inserted

Section 14A of the Limitation Act 1980 — “Special time limit for negligence actions where facts relevant to cause of action are not known at date of accrual” — applies to any action for damages for negligence other than one to which section 11 applies (that is, other than personal injury claims). It gives the claimant whichever is the later of two periods: six years from the date on which the cause of action accrued, or three years from the “starting date”. The starting date, under section 14A(5), is the earliest date on which the claimant, or any person in whom the cause of action was vested before them, first had both the knowledge required for bringing an action in respect of the relevant damage and the right to bring such an action.

Section 14B — “Overriding time limit for negligence actions not involving personal injuries” — provides that such an action shall not be brought after the expiration of fifteen years from the date on which there occurred any act or omission alleged to constitute negligence. It bites even where the claimant had no knowledge at all, and even where the cause of action had not yet accrued when the fifteen years expired.

Both sections were inserted by sections 1 and 4(1)(2) of the Latent Damage Act 1986.

Successive owners: section 3

Section 3 of the 1986 Act deals separately with property that changes hands. Where a person acquires an interest in property that has already suffered latent damage caused by negligence, and the damage is not known to any person with an interest at the time of acquisition, a fresh cause of action in respect of that negligence accrues to the new owner on the date they acquire their interest. That matters for anyone advising on a building purchase: the buyer is not necessarily inheriting a clock that has already run down, though section 14B’s fifteen-year longstop still applies from the original act or omission.

It does not apply to contract claims

This is the point most often missed. Section 14A(1) applies to actions for damages for negligence. A claim framed as breach of a contractual duty of care does not get the benefit of the three-year date-of-knowledge extension; a contract claim runs six years from breach under section 5 of the Limitation Act 1980, regardless of when the claimant found out.

The practical consequence is that where a professional owes concurrent duties in contract and in tort, the tortious claim can survive after the contractual one has expired. Where a retainer or appointment purports to exclude any duty in tort, the effect can be to remove the claimant’s access to section 14A altogether — a drafting point with real limitation consequences, and one worth flagging when reviewing appointment documents.

What it means for professional indemnity insurance

Latent damage is why professional indemnity is a long-tail class. A firm can be sued more than a decade after the work was done, on a claim that only became knowable last year. Three consequences follow for cover.

First, professional indemnity is written on a claims-made basis, so the policy that responds is the one in force when the claim is made or the circumstance notified — not the one in force when the work was done. A firm with no current policy has no cover for historic work, however carefully it was insured at the time.

Second, that is what run-off cover is for. A firm that closes, sells or converts still faces claims for years afterwards, and the standard six-year run-off period found in some regulated schemes is shorter than the fifteen-year longstop in section 14B. We look at that gap in our guide to run-off cover for UK professionals.

Third, retroactive dates matter. A policy with a retroactive date that post-dates the work in question will not respond to it. When moving insurer, the retroactive date is often the single most important item on the schedule — more important than the premium.

Practical points

Do not treat “six years” as the answer to a limitation question in a negligence claim. Ask when the claimant first had the requisite knowledge, and check the fifteen-year longstop separately.

Keep project records for longer than you think you need to. A defence to a fourteen-year-old allegation is built out of drawings, file notes and correspondence, and the firm that kept them is in a materially better position than the firm that did not.

When a limitation argument looks available, notify insurers before running it. Limitation is a defence to be deployed with the insurer’s knowledge, not a reason to delay notification.

Frequently asked questions

Does the Latent Damage Act 1986 apply to claims in contract?

No. Section 14A of the Limitation Act 1980, inserted by the 1986 Act, applies to actions for damages for negligence. A claim for breach of a contractual duty of care runs six years from the date of breach under section 5 of the Limitation Act 1980, whether or not the claimant knew about it.

What is the fifteen-year longstop?

Section 14B of the Limitation Act 1980 provides that an action for damages for negligence not involving personal injury cannot be brought more than fifteen years after the act or omission alleged to constitute the negligence. It applies even if the claimant had no knowledge of the damage, and even if the cause of action had not accrued by then.

When does the three-year date-of-knowledge period start?

On the starting date defined by section 14A(5): the earliest date on which the claimant, or a predecessor in whom the cause of action was vested, first had both the knowledge required for bringing an action in respect of the relevant damage and the right to bring it. Knowledge is a factual question and is frequently the contested issue in these claims.

Does my professional indemnity policy cover work done fifteen years ago?

Only if a policy is in force now and its retroactive date is early enough. Professional indemnity is claims-made: it responds to claims made and notified during the period of insurance, subject to any retroactive date, not to the policy that was in force when the work was carried out.

Sources

• Latent Damage Act 1986 — legislation.gov.uk
• Limitation Act 1980 section 14A — legislation.gov.uk
• Limitation Act 1980 section 14B — legislation.gov.uk
• Latent Damage Act 1986 section 3 — legislation.gov.uk

This page is general insurance information, not legal advice, and describes the position as at August 2026. Cover depends on the wording of the policy actually in force. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.