Prescription (Scotland) Act 2018 commencement regulations: consultation

2. Commencement of the 1973 Act

2.1 The law of prescription is set out in the Prescription and Limitation (Scotland) Act 1973. Section 6 of the 1973 Act provides for the extinction of certain types of obligations on the expiry of a period of 5 years, without interruption, from the date on which they became enforceable. It does not apply to all obligations but only to those listed in paragraph 1 of schedule 1 and those not listed in paragraph 2 of that schedule. The period can be interrupted by a relevant claim or acknowledgement being made in relation to the obligation. Section 7 provides for the extinction of obligations after they have subsisted for a continuous period of 20 years from the date on which they became enforceable. Unlike the 5 year prescription, the date on which the 20 year prescription begins to run takes no account of whether the creditor knew the obligation in question existed. It is a “long stop” period which provides a “cut off” point if an obligation has not already been extinguished. Under the current system the long-stop period is capable of interruption. The long-stop period applies to all obligations other than those specifically excluded from it, namely obligations to make reparation in respect of personal injuries, or for damage caused by a defective product, and obligations identified in schedule 3 as being imprescriptible. Section 8 provides for a similar 20 year long-stop period of prescription in relation to the extinction of certain rights relating to property.

2.2 The 1973 Act also provides when a prescriptive period starts to run and when the running of the period is suspended. For example, section 11(3) deals with what is required, in terms of the state of knowledge of the creditor, to start the running of the 5 year prescriptive period where there is latent damage. This is sometimes referred to as the “discoverability test”. Section 6(4) provides that the 5 year prescriptive period will not run during any period for which the creditor is induced by fraud or error on the part of the debtor (caused by the debtor innocently or otherwise) to refrain from making a claim.

2.3 The commencement provision in section 25 provides that the substantive Parts of the 1973 Act should come into operation three years after the Act is passed, giving an effective date of 25 July 1976. Also included is a second provision (in section 14) relating to the computation of prescriptive periods: the effect is that time which occurred before 25 July 1976 can be counted towards the prescriptive period, but the whole prescriptive period cannot pre-date 25 July 1976. That provision was needed because, as the Commission write, “…the 1973 Act reduced the length of some prescriptive periods and introduced a new five-year prescriptive period in place of a variety of earlier prescriptive regimes…”^[7]