How does deliberate concealment impact the law on limitation?

In the recent landmark decision in Canada Square Operations Ltd v Potter [2023] UKSC 41, the Supreme Court has clarified the meaning of the phrase "deliberate concealment" within a limitation context — where any fact relevant to a claim has been deliberately concealed from the claimant by the defendant. Deliberate concealment can have a significant impact on limitation, and is further outlined in detail as follows.

What does the law on limitation say?

The Limitation Act 1980 sets out the time limits, also known as limitation periods, for bringing different kinds of legal claims.

Section 32(1)(b) of the 1980 Act outlines that where the defendant has deliberately concealed information from the claimant, the commencement of the ordinary limitation period will be postponed. Therefore, where the defendant has failed to provide the claimant with information relevant to their claim, or has omitted to do so on a deliberate basis, the statutory period of limitation begins to run either when the concealment is discovered or it could have been discovered with reasonable diligence.

The question therefore remains as to what amounts to "deliberate concealment" within this context.

How is "deliberate concealment" defined?

In the appeal in Canada Square v Potter, the Supreme Court was asked, amongst other things, to clarify the meaning of the phrase "deliberately concealed" so as to determine whether Mrs Potter’s claim against the defendant was issued too late and was therefore time-barred under the 1980 Act.

On the facts of this case, Mrs Potter had entered into a credit agreement with Canada Square on 26 July 2006 for £20,787.24, comprising a cash loan of £16,953.00 and a payment protection premium of £3,834.24. The premium related to Mrs Potter’s purchase of payment protection insurance (PPI), which Canada Square had arranged on her behalf, taking 95% of the premium by way of commission on the sale of the PPI policy. The sum of just £182.50 was paid over to the insurer, where no mention had been made to Mrs Potter about the commission. The loan was repaid in full on 8 March 2010.

On 14 December 2018, Mrs Potter issued a claim against Canada Square, seeking to recover the amounts she had paid in respect of the PPI policy, plus interest, on the basis that non-disclosure of a very high commission charged to a borrower was unfair. However, that claim — brought under the provisions of the Consumer Credit Act 1974, and following the decision in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 which provided recourse for affected purchasers of PPI — was subject to a 6-year limitation period, with time starting once the credit relationship had ended.

In deciding in Mrs Potter’s favour, notwithstanding the argument put forward on behalf of Canada Square that the claim was time-barred, the Supreme Court found that the limitation period did not start to run under section 32(1)(b) of the 1980 Act until she found out that the premium was likely to have included substantial commission after taking legal advice in November 2018.

In giving the leading judgment, the following useful guidance was also provided by Lord Reed as to the meaning of the words "deliberately" and "concealed" in this context, namely that:

• "conceal" means to keep information secret, either by taking active steps to hide it or by failing to disclose it, regardless of whether or not there is a legal, moral or social duty to disclose the fact — nor does the claimant need to show that the defendant knew the fact was relevant to any claim;

• "deliberate" is akin to "intentional", and does not include recklessness.

What is now needed to defeat a Limitation Act defence?

For a claimant who wishes to rely on section 32(1)(b) to defeat a Limitation Act defence, they must prove that there was a fact relevant to their right of action, which was deliberately concealed from them by the defendant. In discharging this burden of proof, all that is required is clear and credible evidence that the defendant has deliberately ensured that the claimant does not know about the fact in question and so cannot bring proceedings within the ordinary time limit as prescribed by the Act.

Additionally, the defendant’s concealment of a relevant fact will be deliberate if the defendant intended to conceal the fact in question, although "deliberately" does not also mean “recklessly". In respect of either word, no further embellishment is needed, where there is simply no need to move in a direction away from the clear language of the statutory provisions.

Legal disclaimer

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.

Before acting on any of the information contained herein, expert advice should always be sought.

©Melissa Worth, January 2024