Lloyd's Maritime and Commercial Law Quarterly
The limitation doctrine of discoverability
Samuel Beswick*
Over the past four years, the English courts have applied the Limitation Act 1980’s discoverability provisions in a variety of legal contexts. The jurisprudence has clarified the relevant principles and illuminated five tests that guide the commencement of limitation under the discoverability doctrine. The courts have striven for coherence in applying these tests. Nevertheless, inconsistencies persist. In actions for restitution of taxes paid under a mistake of law, claimants continue to enjoy comparatively generous limitation treatment. This anomaly can be corrected through aligning the interpretation of limitation on tax restitution cases more closely with other contexts subject to the doctrine of discoverability.
I. INTRODUCTION
In Test Claimants in the FII Group Litigation v HMRC
1 (“FII SC2”), the United Kingdom Supreme Court reconciled the interpretive principle of discoverability across the various limitation postponement provisions of the Limitation Act 1980. The purpose of discoverability was said to be “to ensure that a claimant is not disadvantaged, so far as limitation is concerned, by reason of being unaware of the circumstances giving rise to his cause of action …”.2 In the context of claims for restitution of taxes paid under a mistake of law, it was held that the limitation period commences once a reasonably diligent person in the position of the claimant could have known that there was a real possibility that a mistake of law had been made.3
Some scholars have criticised the FII SC2 doctrine as unworkable.4 I have defended it elsewhere5 and do not rehash the fundamentals of that debate here. In the brief time since FII SC2 was handed down, courts have put it to work in a variety of significant
* Assistant Professor, Peter A Allard School of Law, The University of British Columbia. In 2015–16 the author contracted legal services to HM Revenue & Customs’ Solicitor’s Office and practised in the team that managed the defence to the overpaid corporation tax cases, although he did not have charge of this litigation. The views expressed are solely the author’s. I acknowledge and thank Huba Arif for assistance with research and editing. I am also grateful for the anonymous referee.
1. [2020] UKSC 47; [2022] AC 1 (hereafter “FII SC2”), [1]. See C Mitchell et al (eds), Goff & Jones on Unjust Enrichment, 10th edn (London, 2022), [33.61].
2. FII SC2, [193].
3. Ibid, [178].
4. A Zuckerman, “Test Claimants 2 in the Supreme Court: Serves neither justice nor the administration of justice” (2022) 138 LQR 1; A Georgiou & E Rawkins, “Between rocks and hard places: Limitation, privilege, and mistakes of law” (2022) 138 LQR 540; C Tsavatopoulos, “The search for finality in litigation” (2021) 40 CJQ 189.
5. S Beswick, “Discoverability principles and the law’s mistakes” (2020) 136 LQR 139; S Beswick, “The overpaid tax litigation: roadblocked” (2021) 84 MLR 1105.
The limitation doctrine of discoverability
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