The pitfalls of entering into a standstill agreement at the last hour

In Page v Kidd & Spoor Harper Solicitors, Kennedys successfully defended an appeal against a grant of summary judgment on the basis that the claim was statute barred under s14B Limitation Act 1980.

Timeline

This claim arose out of an underlying claim for compensation under the vibration white finger compensation scheme. Mr Page alleged that his claim had been under-settled. The relevant events were as follows:

11 March 2003 - Mr Page is offered £20,177 in settlement of his claim. The offer does not extend to certain heads of loss.

21 March 2003 - Mr Page signs a form of authority confirming that he accepts the offer.

31 March 2003 - Kidd & Spoor Harper Solicitors (KSH) send off the form, accepting the offer.

28 March 2018 - KSH enter into a Standstill Agreement with Mr Page.

The law

S14B creates a total limitation period of 15 years which begins to run not on the date that damage is sustained, but on the date of the last causative act or omission. It is irrelevant as to whether damage has, in fact, already been sustained or the claimant has the requisite knowledge to bring a claim.

Arguments

Mr Page argued that either:

• KSH was subject to a continuing duty to ensure that he understood its advice that survived his signing of the form of authority.
• KSH was subject to a new duty, upon receipt of the signed authority, to ensure that he had understood what he had agreed.

We argued that a solicitor is not generally subject to an obligation to review previous work for errors and a failure to correct previous negligence does not give rise to a fresh breach of duty. We said that a fresh duty to advise could not arise in the absence of a trigger.

Decision

The Judge held that any breach of duty in failing to advise Mr Page occurred before 21 March 2003. There was no separate cause of action after 21 March 2003. The failure to further advise on receipt of the signed authority was the same wrongful act as the failure to advise properly before sending the authority to the client. A claimant cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period if he has suffered actual damage from the same wrongful acts outside that period.

Comment

The key takeaway point from this claim is that all parties should double check the requirements of the Limitation Act when limitation is an issue. Claimants are best advised to enter into a Standstill Agreement as soon as limitation becomes a risk. Defendants should be on the lookout for any failure to bring the claim in time.

Read other items in Professions and Financial Lines Brief - May 2022