Prescription Bill introduced

A bill to reform the law of negative prescription, by which certain legal rights disappear if not acted upon, has been introduced to the Scottish Parliament.

The Prescription (Scotland) Bill will refine the law to increase clarity, certainty and fairness for those in dispute over certain rights and obligations, such as rights and obligations under a contract, and allow for more effective use of time and resources.

The bill implements recommendations from the Scottish Law Commission which highlighted issues within the law of negative prescription that can cause difficulty in practice, leading to unnecessary inconvenience and expense.

Legal Affairs Minister Annabelle Ewing said:

“Negative prescription plays an important role in balancing individual interests, between creditors and debtors. It also serves the public interest in legal certainty by having claims raised promptly. Reform is necessary to remove grey areas in the existing law, such as contention regarding the date the prescription clock starts ticking.

“This new legislation, announced in our Programme for Government, supports our commitment to modernise civil law so that it is fit for purpose in the 21st century. The changes in this bill will increase clarity, certainty and fairness, and benefit persons or bodies in resolving disputes.”

The bill will:

• Extend the scope of the five-year prescription in a number of ways
• Reform the so-called “discoverability test” in the Prescription and Limitation (Scotland) Act 1973 relating to the state of knowledge of a creditor in cases of latent damage, such as when a defect emerges in a building long after it was built
• Set the start date of the 20-year prescriptive period in relation to claims for damages as the date of the act or omission giving rise to the claim
• Ensure that the 20-year prescriptive periods cannot be interrupted and allow parties to agree to an extension to the five and two-year prescription periods in certain circumstances
• Clarify that the burden of proof as to whether or not a right has prescribed falls on the creditor

Background

Time limits are essential in any legal system. Prescription and limitation are the means by which Scots law gives them effect.

Negative prescription establishes time-limits for when obligations and rights, such as obligations under a contract, are extinguished. If the time-limit is missed, the right and therefore the ability to enforce the right is lost.

The bill implements recommendations contained in the Scottish Law Commission’s Report on Prescription published in July 2017.