Certain claims in contentious executry matters, such as challenging a will, must be made within a specific time period. Where a dispute arises, seeking legal advice about the relevant time period at the earliest opportunity is of fundamental importance.
In Scots law, the loss of a claim due to the passage of time is known as prescription and is presently governed by the Prescription and Limitation (Scotland) Act 1973. The Scottish Government recently passed the Prescription (Scotland) Act 2018 which makes changes to the law of prescription in Scotland, but at the time of writing the 2018 Act is not yet in force.
What are the time limits?
For many claims in Scots law, prescription will extinguish any claim after a period of five years. This includes the right to challenge a will.
In some cases, however, a longer period will apply. For example, provided those entitled to legal rights are aware of their entitlement, and have not either discharged or elected to receive their legal rights, such entitlement will lapse after a period of 20 years. Some rights and duties never prescribe.
While in many cases it may be straightforward to identify which time period applies to a claim, it is not always straightforward to ascertain when that period starts.
When does the prescriptive clock start running?
The prescriptive clock starts to run from the date you become aware or could, with reasonable diligence, have become aware you have suffered a loss. In contentious executry matters, this may be the date of the signing of the will or the date of death. However, this may not always be the case.
The case of Ilene Anderson and another v George Davidson Wilson [2019] CSIH 4 is a good example of the complexities of prescription in executry matters. An action was brought by two daughters of a deceased couple for damages against their brother-in-law. The pursuers’ father, prior to his death, had sold part of his farm to his son-in-law (the defender) on 9 October 2011. When he died on 21 April 2016, he left his estate to his wife (the pursuers’ mother) which included the monies received from the son-in-law for the sale. His wife then died seven months later, on 22 November 2016, leaving the two daughters and their three sisters as beneficiaries of her estate.
Two of the daughters raised an action on 28 July 2017, arguing that the land sold to the defender had been sold for less than the market value. They said that the sale price of £420,000 paid by their brother in law was less than the market value of £1,050,000. As a result, they argued that as ultimate beneficiaries of the estate, they had suffered a loss as the value of the estate had been reduced by the sale at undervalue and claimed damages from their brother in law.
The defender asked the court to consider whether the claim brought by the daughters had prescribed. Although the claim was brought within five years of the date of their mother’s death (five years being the usual period in which a damages claim can be brought), the question for the court was whether the date of the mother’s death was the appropriate date for the commencement of the five-year prescriptive period. The defender argued that it was the earlier date of 9 October 2011 (being the date of the partial sale of the farm) that was the relevant date on which the five-year prescriptive clock started ticking.
The court found in favour of the defender on this point. It was held that the allegedly wrongful diminution in the value of the estate occurred when the sale at an alleged undervalue occurred and not on the death of either the pursuers’ mother or father. As a result, the clock started to run on the 9 October 2011 and an action for damages raised in 2017 had prescribed.
How does this effect future claims?
It is essential that in contentious executry matters parties seek legal advice at the earliest opportunity. Lodging a claim within the prescriptive window is of fundamental importance if you want to avoid losing any rights you may have.
As a firm we have experience of advising clients in relation to a wide range of contentious executry matters and can assist executors and potential beneficiaries to navigate complicated prescription issues.
For more information please contact Stephanie Hepburn, Senior Associate in our contentious executries, trusts and tax team, at stephanie.hepburn@shepwedd.com.
Additional reporting contributed by Andrew Buchan.