On appeal from: [2016] CSIH 16

This appeal considered whether the five year prescriptive period under the Prescription and Limitation (Scotland) Act 1973, s 6, begins to run on the date on which a creditor becomes aware that he has incurred a financial loss, or whether he must also be aware that such a cost may constitute ‘loss’ or ‘damage’.

The Supreme Court unanimously dismissed the appeal. The Court held that the  phrase “loss, injury or damage” must be interpreted consistently throughout s 11 of the 1973 Act, and therefore that it follows that s 11(3) does not postpone the start of the prescriptive period until a creditor of an obligation is aware, actually or constructively, that he or she has suffered a detriment in the sense that something has gone awry which renders the creditor poorer or otherwise at a disadvantage. The Supreme Court recognised that, though this approach may be harsh to a creditor, the alternative would create uncertainty and a requirement for awareness of a head of loss would involve knowledge of the factual cause of the loss.

The Supreme Court did note that there are live proposals for law reform. Following a Scottish Law Commission report, the First Minister of Scotland announced on 5 Sep 2017 that the Scottish Government intended to bring forward a Bill to reform the law of prescription in Scotland. It will be for the Scottish Parliament to decide whether the Commission’s proposals for reform of the discoverability test in s 11(3) of the 1973 Act should be adopted.

For judgment, please download: [2017] UKSC 75
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (19 Jul 2017 morning session)