LIMITATION OF ACTION — Breach of Community law — Claim for damages — Crown failing to implement certain provisions in Community Directives — Claimants suffering consequential loss — Whether cause of action accruing at time loss suffered — Whether claims statute-barred — Limitation Act 1980, s 2 — Council Directive 84/5/EEC, art 1(4) — Council Directive 89/391/EEC, art 6(2)

Spencer v Secretary of State for Work and Pensions; Moore v Secretary of State for Transport and another [2008] EWCA Civ 750; [2008] WLR (D) 218

CA: Waller, Carnwath and Stanley Burnton LJJ: 1 July 2008

A cause of action for damages against the Government for failure to implement Community law and provide a remedy in a personal injury case accrued as soon as some measurable damage had been suffered.

The Court of Appeal so stated when dismissing the appeal of Derek Keith Spencer against a decision of Holland J in the Queen’s Bench Division on 27 July 2007 [2007] EWHC 1775 (QB); and the appeal of Kenneth Dudley Moore against a decision of Eady J in the Queen’s Bench Division on 20 April 2007 [2007] EWHC 879 (QB).

Mr Spencer made a claim against this employer for injury at work and a claim against the Secretary of State for Work and Pensions for failure to implement art 6(2) of Council Directive 89/391/EEC into the Management of Health and Safety at Work Regulations 1992. Mr Moore was injured by an untraced driver. He received compensation from the Motor Insurers’ Bureau but alleged that it was not sufficient because the Secretary of State for Transport had failed correctly to implement art 1(4) of Council Directive 84/5/EEC. The Government sought summary disposal of both cases on the grounds that if a cause of action accrued it did so when the claimants suffered their personal injuries and the claims were barred by s 2 of the Limitation Act 1980. The judges in both cases agreed and dismissed the claims.

WALLER LJ said that in a claim for damages under the Francovich principle (Francovich v Italian Republic (Joined Cases C-6/90 and 9/90) [1995] ICR 722) the limitation period was one of six years from the accrual of the cause of action, i e from the date when all the necessary ingredients of a cause of action were present. There was no previous appellate authority dealing with limitation for these claims for damages in the context of an alleged failure by the Government to provide a remedy in a personal injury case. At least prima facie an alleged failure of a government to have a particular provision in force was analogous to a solicitor failing to provide an appropriate term in a contract or an insurance broker failing to provide an effective policy of insurance. Those kinds of case gave guidance: see DW Moore v Ferrier [1988] 1 WLR 267; Knapp v Ecclesiastical Group plc [1998] PNLR 172; Law Society v Sephton [2006] 2 AC 543 and Nykredit Mortgage plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627. The following conclusions could be drawn. The facts might demonstrate that no measurable damage had been suffered at the date the negligent advice had been given or negligent failure had occurred, and that would be so where damage was totally contingent. But if it could be shown that a claimant was worse off in terms that could be measured financially at the date of receipt of the advice or negligent failure, the cause of action would accrue on that date, even though accurate measurement of damage would be difficult and some of the damage might still be contingent. In particular, if the allegation was of a failure to provide a term in a contract or a failure to provide an effective insurance policy, the cause of action would accrue on receipt of the negligently drafted contract or receipt of the ineffective policy because, as at that date, the claimant had received something of less value and had thus suffered loss. As long as some measurable damage had been suffered the cause of action would accrue. A measurable loss had been suffered by both Mr Spencer and Mr Moore in relation to their claims against the Government when they suffered their personal injuries. Limitation was a complete answer to their claims and the appeals would be dismissed.

CARNWATH and STANLEY BURNTON LJJ agreed.

Appearances: Paul Epstein QC and Andrew Buchan (Dean Wilson Laing, Brighton) for Mr Spencer; Robert Seabrook QC and Oliver Sanders (Russell Cooke LLP) for Mr Moore; Jonathan Crow QC, Jemima Stratford and David Barr (Treasury Solicitor) for the Secretary of State; Dermod O’Brien QC and Fergus Randolph (Greenwoods) for the Motor Insurers’ Bureau.

Reported by: Alison Sylvester, barrister