In this case the court considered whether or not an interim payment triggered the start of the two-year period for commencing contribution proceedings based on s.10(4) of the Limitation Act 1980.
The original claim was for negligence brought by a patient against a hospital and the surgeon, Mr Brooke, who had operated upon him. On 18 November 2011, the hospital offered to settle the claim together with costs on the understanding that it would seek a 50% contribution from the surgeon. It also offered, pending assessment of damages, to make an interim payment. A consent order to that effect was then signed by all three parties on 25 November 2011. Quantum was then agreed on 24 June 2013.
The hospital then issued contribution proceedings against Mr Brooke on 5 March 2015.
S.10(1) of the Limitation Act 1980 states:
‘Where under section 1 of the Civil Liability (Contribution) Act 1978 any person becomes entitled to a right to recover contribution in respect of any damage from any other person, no action to recover contribution by virtue of that right shall be brought after the expiration of two years from the date on which that right accrued’.
The date on which a right to recover contribution accrued is ascertained either by the date a judgment is given in any civil proceedings or an award is made on any arbitration which holds the person in question liable for the damage.
S.10(4) of the Limitation Act 1980 states:
‘If, in any case not within subsection (3) above, the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made’.
The preliminary issue in relation to limitation in this case was:
whether a voluntary interim payment amounted to "mak[ing] or agreeing to make, [of] any payment...in compensation for the damage" within s.10(4) of the 1980 Act so as to trigger the start of the two-year limitation period under that section;
The surgeon submitted that the date of the interim payment offer was when the right to recover contribution had accrued i.e 18 November 2011 and as such time had run out for the hospital to bring this contribution claim on 18 November 2013. He based this on the language of section 10(4) which he said was clear in saying that the trigger date is the date on which ‘the amount to be paid by him is agreed’. That phrase, in turn, he said, refers back to the amount of ‘any payment…in compensation for that damage’. The key word is ‘any’ in ‘any payment’. An agreed interim payment, as made in the present case, is such a payment ‘in compensation for that damage’. That it is intended to be covered by section 10(4) is confirmed by the use of the word ‘any’. If section 10(4) had been intended to cover only final quantification of damages, there would have been no need for the word ‘any’.
Spire submitted that under both s.10(3) and s.10(4) it was important to distinguish between a) the circumstances in which a person becomes entitled to a right to contribution and b) the date on which that right accrues. It claimed that the first part of s.10(4), the words ‘makes or agrees to make any payment to one or more persons in compensation for that damage’, defines the circumstances, but it is the second part, the words ‘the earliest date on which the amount to be paid by him is agreed’, which is the trigger date for the commencement of limitation. The ‘amount to be paid by him’ must mean, it said, to be paid ‘in compensation for the damage’ and that must be the full amount to be paid in full compensation for the damage. As such, it was Spire’s case that, limitation ran from the date of agreement of final quantum i.e. 24 June 2013 and so limitation did not expire until June 2015 and as the claim was brought on 5 March 2015, the claim was in time.
Mr Justice Morris, sitting in the High Court agreed with Spire’s interpretation of the legislation and rejected Mr Brooke’s submission that s.10(4) covered an agreed interim payment. He stated that the provision was concerned with the date of agreement of ‘the’ settlement sum, which meant the final overall figure, rather than agreement of sums towards a final figure. There should be a parity of approach to the meaning of ‘the relevant date’ for limitation purposes as between s.10(3) and s.10(4) of the 1980 Act. Under the predecessor to s.10(4), namely the Limitation Act 1963 s.4(2)(b), an interim payment would not have been covered. Section 10 substantially reproduced s.4 of the 1963 Act even though the wording was materially changed; there was no suggestion that the change in wording had been intended to change the trigger date. Not even a court order for an interim payment would start time running under s.10. Furthermore, the word ‘any’ in the first part of s.10(4) did not mean that a consensual interim payment was the trigger date under s.10 in circumstances where a court-ordered interim payment was not. Where limitation legislation was intended to cover the effect of a part payment, it would say so expressly. The ‘relevant date’ for the purposes of s.10(4) was therefore 24 June 2013 and proceedings had been issued within the two-year limitation period.