Don’t look back in anger, don’t leave Litigation action ‘till the last minute

Year Published: 2012

It may sound like stating the proverbial obvious but if you leave serving or responding to a claim in litigation to the last minute, then you are not maximising your prospects, you increase the risk of not achieving your desired outcome and of making a very costly error.

The recent case of Ener-G Holdings Plc v Philip Hormell [2012] EWCA Civ 1059 highlights this very point. And there was a potential claim of £2m at stake; so it was not to be sniffed at.

The claim related to a share purchase agreement; specifically the warranties given within the contract. In order to bring a claim the buyer had to serve a notice by the second anniversary that the contract was completed. The buyer then had to issue court proceedings within twelve months of the date of the notice.

Unfortunately matters were left to the last minute. The buyer was able, by the skin of their teeth, to serve the notice in time. However, due to the service provisions in the Civil Procedure Rules, deemed service of the court proceedings was not within the twelve months required by the contract.

Unfortunately for the buyer, as the proceedings were not issued in accordance with the contract, the warranty claim was irrevocably withdrawn and with it a potential £2m claim.

If the buyer had been just a week earlier, which in the grand scheme of things and given the sums involved, is not a long time – they would have been in time to bring the claim.

Therefore, you need to make yourself fully aware of any time limits within a contract and also the time limits in the civil procedure rules. Ensure you give yourself – and your lawyer – plenty of time to take action and make sure the relevant dates are in your diary, with reminders.

Please also be aware that time limits for claims are not just a matter of contract. There will also be limits placed on any claim as a matter of law.

If you are not sure, speak to your lawyer, get early advice. Don’t be someone who loses out and looks back in anger!

For more information on time limits or any other litigation issue, please contact our Dispute Resolution team on 0161 475 7676.

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