---------- Forwarded message ----------
From: Gerard Sadlier <gerard.sadlier@gmail.com>
Date: Wed, 27 May 2015 00:59:03 +0100
Subject: Cases Where Subsequent Negligent Act or Omission Stops
Limitation Period
To: Obligations Discussion Group <odg@law.ox.ac.uk>

Dear all,

I'd be grateful for any references you may have to cases from any
jurisdiction, in which a second or subsequent negligent act or
omission, say a negligent failure to identify and flag one's previous
negligence was held to restart the limitation period.

This has arisen in a series of solicitors' cases, in England but I
would be particularly interested in cases concerning other
professionals, accountants, engineers etc.

The principle seems to have been developed in England since Gold v
Mincoff [2001] Ll Rep 423. It was reviewed recently by the English
High Court in Matheson v CLINTONS (A FIRM) [2013] EWHC 3056, at
paragraphs 157 and following.

By way of example, Gold v Mincoff [2001] Ll Rep 423. (as summarized at
157 and following of Matheson's case) was a case in which there were
two retainers: an initial advisory
retainer between 1984 and 1990, and a further retainer in 1993. As a
result of negligence in relation to the first retainer, Mr Gold became
party to mortgage
contracts the terms of which were disadvantageous to him, and exposed
him to substantial risks. Under the second retainer in 1993, Mincoffs
negligently
failed to identify disadvantageous terms and consequent risks during a
restructure of the mortgage contracts with the mortgagee, AIB, and
failed to advise
Mr Gold of their earlier negligence under the first retainer. AIB
successfully sued Mr Gold upon the mortgage contracts under the terms
which Mincoffs
negligently failed to advise him about.

157.
When suing Mincoffs, Mr Gold relied upon s32 and upon an argument that
later negligence had concealed the earlier negligence. Neuberger J
dealt with the
latter argument at [97] to [102] in the following way:

"97. If Mr Gold cannot rely upon section 14A or section 32, so far as
the earlier mortgages are concerned, Mr Bonney contends on his behalf
that he has,
in effect, a fresh cause of action in relation to the earlier
mortgages, based on Mincoffs' failure to advise him about the
existence and effect of the
liability clause in the earlier mortgages in or about July 1993. The
claim runs thus. If Mincoffs had properly advised Mr Gold when the
draft 1993 mortgage
with the liability clause was proffered, they would have appreciated
that they had been negligent in relation to the earlier mortgages and
would have been
bound to advise Mr Gold to that effect. Had they so advised, he would
not have been barred by the 1980 Act from suing Mincoffs in relation
to the earlier
mortgages. On this hypothesis, through Mincoffs' negligence in the
first half of 1993, Mr Gold lost the right to sue Mincoffs for their
negligence in relation
to the earlier mortgages. If that contention is correct, then, albeit
on the basis of a slightly different set of facts Mr Gold has not lost
the right
to sue Mincoffs for their failure to advise as to the effect of the
earlier mortgages, even if his claim was otherwise statute-barred.


98. Mr Davidson rightly warns against the court being too easily
persuaded by the claimant that he has a fresh cause of action against
his solicitor on
the basis that the solicitor failed to advise, at some point after his
initial negligence, that he had been negligent. If such an argument
were too readily
accepted, it would have two unsatisfactory consequences. First, it
would enable the provisions of the 1980 Act to be evaded in many cases
in an artificial
way. Secondly, it would effectively impose on a solicitor some sort of
implied general retainer. Accordingly, I would accept that it would be
a relatively
exceptional case where the court would be prepared to hold that a
solicitor's negligence claim that was otherwise Statute-barred could,
albeit in a slightly
different guise, be resurrected on the basis that, at a time within
the limitation period and less than six years before the issue of
proceedings, the
solicitor failed to advise that he had been negligent. Only if the
facts clearly warrant such a conclusion should the court adopt it, in
my view.


99. It is clear that a solicitor "who … has acted negligently [does
not come] under a continuing duty to take care to remind himself of
the negligence of
which, ex hypothesis, he is unaware" — per Oliver J in Midland Bank
Trust Co Ltd -v- Hett Stubbs and Kemp [1979] Ch at 403C. It is also
true, in my opinion,
that the mere fact that, following his negligence and within the
limitation period, the solicitor is instructed in the same matter by
the same client,
does not itself put the solicitor under a duty to discover, or advise
as to, his negligence on the earlier occasion. As was said by Oliver J
in Midland
at 403A, the Court must be careful of imposing a duty on a solicitor
which involves going beyond his specific instruction. Nonetheless, if
the subsequent
instruction was also negligently implemented by the solicitor, and,
this later negligence concealed the earlier negligence then, subject
to normal questions
such as causation and remoteness, if the earlier negligence only comes
to light outside the limitation period, the loss of the right to sue
in respect
of it can properly be the subject of a claim based on the later
negligence. I derive support for this proposition from Costa -v-
Georgiou (2nd May 1984,
CA Transcript 15G–17D, 18H–19G). See also Liverpool [2000] Lloyds LRPN
836 at paragraphs 11 and 27.


100. In the present case, during 1992 and 1993, Mr Gold sought and
obtained the advice of Mincoffs in connection with the consolidation
of the Partnership's
liabilities to AIB, and, in particular, in connection with terms and
signing of the 1993 mortgage. It is common ground that Mincoffs ought
to have considered,
and advised on the effect of, the liability clause in the draft 1993
mortgage. Had they done so, they would have appreciated that it
imposed a far greater
liability on Mr Gold than either he or Mincoffs intended. They would
have advised Mr Gold about this and could have done so up to the time
he executed
the 1993 mortgage, namely in July 1993, less than six years before the
issue of these proceedings.


101. In my judgment, if they had appreciated the effect of the
liability clause in the draft 1993 mortgage, it would have led
Mincoffs inexorably to the
terms of the earlier mortgages, and that would equally inevitably have
led them to appreciate that the earlier mortgages contained the
liability clause,
which was already binding on Mr Gold. This would have been achieved in
one of two ways. First, Mincoffs would have advised Mr Gold that he
ought to approach
AIB with a view to amending the liability clause in the draft, and
that would have, or at least ought to have, led them to consider the
then-current extent
of Mr Gold's present liability, i.e. under the earlier mortgages.
Alternatively, if they had not been as efficient as they might have
been, Mincoffs would
have approached AIB objecting to the terms of the liability clause, in
the draft 1993 Mortgage. In that event, from the evidence I have
heard, AIB would
have been reluctant to amend that clause, because, although it appears
that they did not appreciate its full effect, it was in their standard
form, and
they were not anxious to depart from their standard form. That would
have led Mincoffs, either off their own bat following negotiations, or
(more likely)
because their attention was drawn to it expressly by AIB, to the
liability clause in the earlier mortgages, which represented Mr Gold's
liability at that
time.


102. In these circumstances, if Mincoffs had not been negligent in
failing to advise Mr Gold as to the effect of the liability clause in
the 1993 mortgage,
before he signed it, they would have advised him as to the existence
and effect of the liability clauses in the earlier mortgages. This
would inevitably
have required them to have advised Mr Gold that they had been
negligent in connection with the earlier mortgages, and that he should
seek separate legal
advice, which would have led him to be able to bring proceedings
against Mincoffs based on their negligence under the earlier
mortgages. That follows,
to my mind as a matter of law. It is also clear from paragraph 13.04
of the Law Society's Guide to the Professional Conduct of Solicitors
(1990 Edition)
which was then in force. This, I accept, is a somewhat indirect
conclusion, but in my view, it is correct."

Many thanks

Ger