Cases - Skipton Building Society v Sorsky
Record details
- Name
- Skipton Building Society v Sorsky
- Date
- (2003)
- Legislation
- Keywords
- Negligence in valuations and surveys - Limitation Act 1980
- Summary
-
The claimant bank 'SBS' advanced loans to company directors in reliance upon negligent references and accounts produced by the defendant firm of accountants ‘S’. The claim was outside of the limitation period so SBS attempted to rely on section 14A of the Limitation Act arguing that it did not have the requisite knowledge until it had received a report from a firm specialising in investigating accountancy irregularity which had stated that a claim ought to be issued.
The court held that SBS did not have actual knowledge as to the negligent nature of the statements made by S until it received the report. However SBS ought to have considered the possibility that S had been negligent when it found out that S had been wound up some 5 years before it made the claim. It was relevant that SBS was a large organisation and should have had a system in place for investigating large losses and the potential causes of such loss, including engaging expert accountants to check over the work of those involved in loss-making ventures.
Failing to investigate firms involved in large loss-making ventures, especially when those firms are wound up, may preclude claimants from denying having the requisite knowledge under section 14A of the Limitation Act 1980.
The decision applies particularly to sizeable organisations with available resources, but is a warning to claimants not to shut their eyes to the obvious and where appropriate to investigate and issue protective proceedings to avoid limitation problems. Waiting until investigations are complete may be too late.