Professional negligence claims sit at the intersection of contract and tort, and the rules on limitation determine whether a claim can be brought at all. Section 14A of the Limitation Act 1980 extends the ordinary limitation period where damage is latent, meaning it was not reasonably discoverable at the time it occurred. For professional advisers and the firms that insure them, s.14A materially widens the exposure window and drives the case for maintaining professional indemnity cover well beyond retirement or firm closure.
The starting point for a claim in tort is section 2 of the Limitation Act 1980, which sets a limitation period of six years from the date on which the cause of action accrued. In negligence, the cause of action accrues on the date damage is suffered, not on the date of the negligent act itself. For a professional adviser this can be difficult to pin down, because the damage may be economic and may crystallise long after the advice was given.
Section 14A provides an alternative period for negligence claims that do not involve personal injury. Where the primary six-year period has expired, or is about to, a claimant may still bring proceedings within three years of the earliest date on which they had the knowledge required for bringing the action. The three-year clock runs from whichever date, on the s.14A test, comes later than the six-year period under s.2.
The statutory concept of knowledge was examined by the House of Lords in Haward v Fawcetts [2006] UKHL 9. The court held that a claimant needs knowledge of the material facts about the damage — enough to justify starting to investigate whether there is a case worth pursuing against the adviser — but does not need to know that those facts amount to negligence in law. The bar is a practical one: the claimant must know that something has gone wrong and that it is attributable to the act or omission of the defendant, at a level of detail sufficient to make investigation reasonable. Earlier authority such as Halford v Brookes [1991] 1 WLR 428 illustrates the same idea in the personal injury context — knowledge is broad and factual rather than technical or legal. In Su v Clarksons Platou Futures [2018] EWCA Civ 1115 the Court of Appeal reaffirmed that constructive knowledge, meaning what the claimant could reasonably have been expected to acquire, counts alongside actual knowledge.
Section 14B imposes an absolute longstop of 15 years from the date of the negligent act or omission. It runs regardless of the claimant's knowledge and cannot be extended by s.14A. Once 15 years have passed from the negligent act, the claim is time-barred even if the damage has only just become discoverable.
Section 32 postpones the running of time where the defendant has deliberately concealed a fact relevant to the claimant's right of action. In that event, the limitation period does not begin until the claimant has discovered the concealment, or could with reasonable diligence have discovered it. Section 32 can override the s.14B longstop in cases of deliberate concealment, and it applies to negligence claims where the adviser has concealed the fact of their error.
Worked example. A solicitor drafts a will in 2010 that fails to give effect to the testator's instructions. The testator dies in 2020, and the disappointed beneficiary discovers the drafting error at that point. The primary six-year period under s.2 runs from 2010, the date of damage, and expires in 2016 — well before the beneficiary knows anything is wrong. The s.14A three-year period runs from 2020, when the beneficiary acquires the material facts, and expires in 2023. The s.14B longstop runs 15 years from the negligent drafting in 2010, expiring in 2025. Because the s.14A period ends within the longstop, the claim is viable if brought before 2023. For the claim to have anywhere to go, the solicitor's professional indemnity insurance must still be in force, either through the current policy or through run-off cover taken out after the firm has ceased to practise.
Professional indemnity policies are written on a claims-made basis, meaning it is the policy in force when the claim is notified — not the policy in force when the work was done — that responds. The combination of a six-year primary period, a three-year knowledge extension and a 15-year longstop means that a claim can arrive on a professional's desk many years after the underlying advice. Firms that close, merge or retire without adequate run-off cover leave former principals exposed to personal liability during the tail. Apex Insurance Brokers regularly reviews run-off provision alongside live cover for solicitors, accountants, architects, surveyors, engineers and other regulated professions, so the limitation tail and the insurance tail line up.
Further reading on the profession-specific market context is available on the Apex pillar pages for solicitors' PI insurance, accountants' PI insurance, architects' PI insurance and surveyors' PI insurance.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.