Many claims have now reached their six year limitation period following the financial crisis of 2008.
In Kays Hotels Ltd v Barclays Bank Plc [2014] EWHC 1927 the claimant was time barred from its breach of contract and breach of statutory duty claims. However, it sought a three year extension for its negligence action under s14A of the Limitation Act 1980, on the basis that the facts relevant to the cause of action were not properly known to the claimant at the time when the cause of action accrued.
The claimant's case was that the derivative product was not suitable because it exposed the claimant to an "excessive" risk. Mr Justice Hamblen considered the following:
If the complaint had simply been that the claimant had been advised that he would incur no interest rate loss, then one could understand that as soon as it became apparent that the claimant was having to pay interest rate losses, he would or should have known the facts necessary to investigate into such a claim. However, that is simply one facet of a much more complex claim; a claim which is not simply based on interest rates but which focuses on questions of suitability. In my judgment the mere fact that it was known that some interest payments were being made for a period of about a year does not give rise to an unanswerable case that the claimant knew or ought to have known sufficient facts to make the requisite investigation for the purpose of Section 14A.
The mere fact that the claimant had suffered some loss did not indicate a lack of suitability, it was only when the claimant had knowledge that it was exposed to an "excessive" risk. The application for summary judgment was dismissed as Mr Justice Hamblen held that the claimant had a real prospect of establishing that it was entitled to rely on s14A at trial.
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