Defect Must Be Known to Start Clock

If there is a latent defect in the design of a building or other structure, it may be several years before this becomes evident. The law provides that when such a defect occurs due to negligence, the normal period of limitation for bringing an action runs from the time that the defect is discovered. However, the Limitation Act 1980 does impose a ‘long stop’ period of 15 years, after which a claim cannot be made regardless of when the latent damage came to the claimant’s knowledge.

Recently, architects who designed a building which proved to have an inadequate drainage system attempted to have the legal action against them thrown out on the basis that the claim was brought after the time limit for it had expired. The claim was brought after the building had flooded for the second time.

The claim arose when books stored in the building were damaged due to flooding because the rainwater drainage system designed by the architects could not cope with the volume of rainwater. Eight years earlier, there had been a previous flood in the building, but at that time it was occupied by another company. The loss adjusters acting for the insurers at that time had discovered that the rainwater drainage was inadequate, but they had not informed the company of that fact.

The architects argued that the first flood terminated their liability. It had, they argued, ‘broken the chain of causation’ because it was reasonable to assume that the first flood would lead to the discovery of the defect, so no further damage from that cause should then be reasonably foreseeable. In claims of this type, the claimant must show that the damage follows from an unbroken sequence of actions and consequences. The architects argued that their duty of care should not extend past the first flood and, in any event, any negligent act they had committed which caused the damage for which the claim was made occurred outside the normal limitation period.

The Court of Appeal found that the first flood was the event that resulted in the inspection of the drainage system, which in turn led to the discovery of its design inadequacies. However, the claimant in this case had no knowledge of the first flood and had no reason to carry out an inspection. The chain of causation was not therefore broken and the claim was made within the ‘long stop’ period during which a claim could be brought. Since the damage caused by the flooding was foreseeable, the architects were liable.