Limitation period for bringing contribution claims against third parties

Where two or more people are liable for causing a loss, the claimant will not necessarily sue both. If the claimant sues defendant 1 and defendant 1 is found liable in damages, defendant 1 may bring a claim against defendant 2 for a contribution towards the damages that defendant 1 has to pay.

The Limitation Act 1980 provides that the claim by defendant 1 against defendant 2 must be brought within 2 years. The Court of Appeal has clarified that this time limit begins to run from the date when damages against defendant 1 are assessed, rather than the date that defendant 1 is found to be liable.

Although the case was a personal injuries matter, the decision is of considerable relevance for property litigation. Two examples of situations where this type of contribution claim may arise are given in the Comments section of this update.