Dialogue: Steven Price

Judiciary has long known the Limitation Act is an ass

It seems like such a simple, elegant rule. If you are going to sue someone, you must do it within six years or you lose your chance. Otherwise, supposed wrong-doers could have the threat of litigation hanging over their heads for ever, and might have to defend themselves decades later, when memories are dimmed, records lost and witnesses dead.

This is called the limitation period and it is contained, as you would expect, in the Limitation Act.

Sounds fair enough, right? Think again. What happens when a council's building inspector negligently approves some shonky house foundations, but serious cracks don't appear for seven years?

Or when a lawyer negligently advises a client to sign a guarantee, but the client doesn't find out about the negligence until he has to pay the debt eight years later?

What happens when a woman claiming she was sexually abused as a child only realises in counselling as an adult that the abuse wasn't her fault?

Under the Limitation Act, the clock may run out on such people before they even know they have a case.

Judges have bemoaned these injustices for years. They have pleaded with Parliament to reform the law. In 1988, the Law Commission drafted a new law which would have alleviated some of the problems, as other countries have done.

But successive governments have failed to lift a finger. It was never a priority. Some people disagreed with some of the Law Commission's recommendations, but no alternatives were put forward. Everyone seems to accept that the law badly needs changing but no one has done anything about it.

That has left the law in the hands of the judges, and they have responded in the time-honoured fashion of judges faced with hard cases: by making bad law.

Some have stretched the exceptions that exist, some have invented other exceptions, some have carved off special categories of case for different treatment.

Some judges' legal analysis has been downright dishonest. Others have reluctantly applied the law strictly, insisting that any change must be for Parliament.

The result is a horrible mishmash of conflicting precedents. Limitation cases have become judicial crap-shoots. Different rules may apply depending on whether you're suing for sexual abuse or a negligent building inspection or a lawyer's foul-up, whether you're suing in law or equity, whether you're suing in contract or tort (and which tort you're suing for), whether a psychological disability has contributed to the delay in filing, whether the judge thinks you have behaved reasonably, and whether your lawyer pleads the case properly.

You are in fairly good shape, for example, if you spot cracks in your house and it turns out that the foundations were negligently installed or inspected a dozen years ago. New Zealand courts have long recognised that the six-year clock doesn't start ticking until you could reasonably have discovered the problem. So you will probably still be able to sue the builder or the council.

But if your lawyer was negligent, and you don't realise it until much later, the courts won't necessarily apply the same test.

People who claim they were sexually abused in childhood also often have their cases scythed by the Limitation Act (and they are disadvantaged anyway because personal injury cases have only a two-year clock).

One Court of Appeal judge, Justice Ted Thomas, is so frustrated with the inability of the "largely male-dominated courts" to accommodate these cases that he complained they were biased against women.

The Law Commission has again called for reform, issuing another discussion paper with different, less complicated recommendations. It sensibly suggests that most plaintiffs should get extra time (up to a maximum of 10 years altogether) if they can show that they could not reasonably have known within the limitation period that they had a claim.

I'm inclined to think the maximum should be 15 years, as the Law Commission proposed in its comprehensive 1988 report (when there was an entirely different set of commissioners, including our present Attorney-General and Chief Justice and present and former members of the Court of Appeal).

The commission also recommends that the clock should stop if, for example, sexual abuse victims can show the abuse prevented them from making reasonable judgments about bringing a case.

These may not be perfect solutions. But they beat hell out of the mess we've got now.

Is anyone in Parliament listening?

sxprice@hotmail.com