Latent Damage Act 1986: Time Limits, Knowledge and Case Law

Introduction

The Latent Damage Act 1986 was passed to fix a practical problem: hidden defects in buildings and other property often show up years after the careless act that caused them. Before the Act, many claims were already out of time by the point of discovery. The 1986 reforms amended the Limitation Act 1980 to add a flexible, knowledge-based period for negligence claims involving latent damage, while also imposing a strict 15-year cut-off.

In simple terms:

• There is still a primary six-year period running from when the claimant first suffered damage (not from the negligent act).
• If that six-year period has ended before the claimant could reasonably know they had a worthwhile claim, there is a further three-year period running from the date of “knowledge”.
• Even so, a strict “long-stop” bars any such claim 15 years after the negligent act or omission.

These rules are central in construction and property disputes, and in professional negligence against architects, engineers and surveyors. They do not apply to personal injury claims, and they sit alongside different time limits for contract claims.

What You'll Learn

• How the Act operates through sections 14A (knowledge-based period) and 14B (15-year long-stop) of the Limitation Act 1980
• What “knowledge” means in this context, including actual and constructive knowledge
• When damage “occurs” for negligence claims involving property defects
• Which claims are covered (negligence) and which are excluded (personal injury; pure contract)
• How courts have applied the rules in leading cases such as Pirelli, Murphy, Abbott and Haward
• A step-by-step method to assess limitation in latent defect disputes
• Practical tips for claimants and defendants, including evidence, standstill agreements and diarising deadlines

Core Concepts

The statutory scheme: s.14A and s.14B Limitation Act 1980

• Primary limitation: Six years from the date the cause of action accrued (i.e., when actual damage was first suffered), as per the general rule for negligence.
• Knowledge-based period (s.14A): If the six-year period has expired without the claimant having the necessary knowledge to bring proceedings, the claim may still be brought within three years from the date of knowledge. This extension is only for negligence claims that do not involve personal injury.
• Long-stop (s.14B): No claim to which s.14A applies may be brought more than 15 years after the act or omission alleged to constitute negligence. This long-stop is intended to provide certainty and is treated as a strict cut-off.
• Personal injury excluded: Section 14A does not apply to personal injury (which is governed by s.11 and s.14 of the Limitation Act 1980).
• Contract claims excluded: The latent damage provisions do not apply to claims in contract (usually six years from breach, or twelve years if under deed).

Overall effect: The Act gives claimants time to bring claims once they know enough to justify proceedings, but defendants gain finality after 15 years.

What counts as “knowledge” under s.14A?

“Knowledge” includes both what the claimant actually knows and what they are taken to know with reasonable diligence. It is not enough to know that a defect exists. The key elements are:

• Significant damage: Knowledge that the damage is significant (not trivial), such that it would be reasonable to issue proceedings having regard to costs, time and effort.
• Attributable cause: Knowledge that the damage is attributable, in whole or in part, to an act or omission by the defendant. The claimant does not need to know the precise details of the breach of duty.
• Identity of the defendant: Knowledge of the defendant’s identity, or knowledge of facts that, with reasonable diligence (including taking expert advice where appropriate), would lead to their identification.

Constructive knowledge: A claimant is deemed to know what they could reasonably have found out by making sensible enquiries or taking expert advice. Sitting on concerns can shorten the available time if a court decides they should have acted sooner.

When does damage occur in negligence?

The six-year primary limitation period runs from the date of actual damage, not from the negligent act or the completion of the work. In construction and property cases, damage commonly “occurs” when the property suffers physical harm (for example, cracks or corrosion), even if the claimant does not yet see it.

Key points:

• Hidden physical damage can occur before it is discovered.
• The cause of action accrues once damage has happened, not when the defect comes to light.
• Cost of remedial work without accompanying physical damage may not be recoverable in negligence as “damage” if it amounts to pure economic loss (see Murphy below).

Scope: covered and excluded claims

Covered:

• Negligence claims for damage other than personal injury, including:
  • Building and structural defects causing property damage
  • Professional negligence by architects, engineers, surveyors and other consultants
  • Negligent misstatement leading to financial loss (subject to the usual rules on duty and recoverability)

Excluded or different rules:

• Personal injury (s.11 and s.14 of the Limitation Act 1980 apply)
• Contract claims (six years from breach, or twelve years if under deed)
• Statutory claims with their own time limits (for example, Defective Premises Act 1972; note that the Building Safety Act 2022 has separately altered some DPA 1972 time limits)

Key Examples or Case Studies

Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1

• Pre-1986 decision that spurred reform.
• Held that time in negligence runs from when damage occurs, not when the careless act took place. The problem in practice was that claimants often discovered damage after six years had already passed. The Act addressed this by adding the knowledge-based period.

Murphy v Brentwood District Council [1991] 1 AC 398

• Confirmed that, as a general rule, pure economic loss from a defective building is not recoverable in negligence. Recoverable loss in negligence typically requires physical damage (to the building or other property) or personal injury.
• Also shows how limitation can bar claims where damage existed for more than six years and the claimant had, or should have had, the relevant knowledge more than three years before issuing.

Abbott v Will Gannon & Smith Ltd [2005] EWCA Civ 198

• A surveyor missed defects. The claimant issued within three years of discovering the problem.
• The Court of Appeal accepted that the claimant did not have the s.14A knowledge earlier, so the claim was in time. The case demonstrates how the three-year knowledge period can keep a claim alive even after six years have passed.

Haward v Fawcetts [2006] UKHL 9

• Concerned when a claimant has sufficient knowledge that loss is “attributable” to the defendant’s act or omission.
• The House of Lords held that the claimant need not know the exact breach of duty. It is enough to know the essence: that the damage is caused, in whole or part, by something done or not done by the defendant, and that the damage is significant.

Nitrigin Eireann Teoranta v Inco Alloys Ltd [1992] 1 WLR 498

• Considered when “damage” occurs for the purpose of accrual in negligence.
• The court treated damage as occurring when the physical deterioration or defect caused real harm, even if it remained undiscovered. This timing is central to the primary six-year period.

Practical Applications

Step-by-step to check time limits

1. Identify the cause of action:
   • Is it negligence (not personal injury)? If contract is pleaded, note different limitation rules.
2. Pin down when damage occurred:
   • Look for the first date of actual physical harm or other recoverable damage. Expert evidence is often needed.
3. Apply the six-year primary period:
   • Count six years from the date of damage. If still within six years, the claim is in time (subject to any other defences).
4. If six years have expired, assess s.14A knowledge:
   • Determine the date when the claimant first had, or should reasonably have had, knowledge that:
     • the damage was significant,
     • it was attributable to the defendant’s act or omission, and
     • the defendant’s identity was known or discoverable with reasonable steps.
   • If proceedings are issued within three years of that knowledge date, the claim may be in time.
5. Check the 15-year long-stop (s.14B):
   • No claim can be brought more than 15 years after the alleged negligent act or omission. This cut-off is strict and is not extended by later discovery.
6. Record and diarise:
   • Limitation can be decisive. Keep reliable timelines, expert advice dates, and correspondence that may show when knowledge arose.
7. Consider standstill agreements:
   • If limitation is close, parties sometimes agree to pause time. Use a clear written agreement and take care with the long-stop; it cannot be moved.

Worked example

• Negligent design: 2008
• Physical damage occurs (unseen cracking): 2012
• Discovery by owner: 2017 after a survey
• Six-year period from damage ends in 2018 (2012 + 6)
• If the owner first had s.14A knowledge in 2017, the three-year knowledge period ends in 2020 (2017 + 3)
• Long-stop ends in 2023 (2008 + 15)
• The action is in time if issued before 2020 and, in any event, cannot be issued after 2023

For claimants

• Move quickly once issues are suspected. Commission expert reports to clarify when damage occurred and whether it is significant and attributable to particular acts or omissions.
• Keep a record of when advice was sought and received. Courts may impute knowledge that reasonable enquiries would have produced.
• Consider parallel claims (negligence and contract) so both sets of time limits are covered. Check any collateral warranties and whether they are deeds (12-year period).
• Be alert to other statutory routes (for example, the Defective Premises Act 1972), which have their own time limits.

For defendants

• Test the date of damage and the claimant’s knowledge. Technical reports, earlier surveys, maintenance records, and transactional documents can show earlier awareness.
• Track the long-stop, which can provide a complete defence.
• If limitation is borderline, raise it early and request details of the claimant’s knowledge timeline and expert advice dates.

Evidence that often matters

• Original design, construction and inspection records
• Maintenance and condition surveys, snagging lists and repair invoices
• Emails and letters showing when defects were suspected and investigated
• Expert reports identifying the cause, extent and timing of damage
• Contracts, appointments and collateral warranties (to assess contractual limitation)

Summary Checklist

• Confirm the claim type: negligence (not personal injury), or contract/statute
• Identify when actual damage first occurred
• Apply the six-year primary limitation from the damage date
• If needed, assess s.14A knowledge and the three-year period
• Check the 15-year long-stop from the act or omission
• Gather evidence showing when knowledge was, or should have been, acquired
• Consider standstill agreements well before any deadline (noting the long-stop)
• For mixed claims, check contract limits (six or twelve years) and any statutory alternatives

Quick Reference