20th July 2021

Retrospectively changing rights and liabilities

As addressed in Luke Wygasnote one of the most eye catching changes threatened by the Bill is a retrospective extension of limitation periods running under the Defective Premises Act 1972 from 6 years to 15 years. This could remove accrued limitation defences and re-impose liabilities. It is unusual for Parliament to seek to make retrospective changes, and, as it probably has to, the Bill states that a Court will dismiss a claim if it is necessary to do so in order to avoid a breach of rights under the European Convention on Human Rights (ECHR), which is in turn directly applied by the Human Rights Act.

Put at its lowest, this issue poses substantial risks to claimants who seek to rely on retrospectively extended limitation periods.

Retrospective legislation at common law

While there is a presumption at common law that statutes are not intended to have retrospective effect, there is no prohibition on retrospective legislation where the intention to operate retrospectively is expressly or impliedly clear from the wording of the statute. Section 126(3) of the Building Safety Bill makes such an intention clear.

The general approach to retrospective legislation was summarised by Lord Kerr in the Supreme Court case of Walker v Innospec Limited and others [2017] UKSC 47:

“The general rule, applicable in most modern legal systems, is that legislative changes apply prospectively. Under English law, for example, unless a contrary intention appears, an enactment is presumed not to be intended to have retrospective effect. The logic behind this principle is explained in Bennion on Statutory Interpretation, 6th ed (2013), Comment on Code section 97:

“If we do something today, we feel that the law applying to it should be the law in force today, not tomorrow’s backward adjustment of it.” ”

A statute which is clearly intended to have retrospective effect will be construed as such. A common example is legislation which retrospectively validates activities which previously had no statutory basis (such as the Wireless Telegraph (Validation of Charges) Act 1954 which provided a statutory basis for wireless licence fees which had been collected for the previous 50 years).

Even in a criminal context legislation may have retrospective effect where such an intention is obvious. A rare example is the War Crimes Act 1991, which allowed proceedings to be brought against anyone holding British citizenship who had committed a war crime in Germany or German occupied territory during WWII, even if they were not a British citizen at that time.

Retrospective legislation under the Human Rights Act/European Convention on Human Rights (ECHR)

Section 126(5) of the Building Safety Bill provides that the extended limitation period for actions under the Defective Premises Act will not apply where it would breach the defendant’s Convention rights. The Explanatory Notes describe this as a safeguard to ensure fairness. The Convention rights most likely to be engaged are Article 6(1) of the Convention and Article 1(1) of the First Protocol.

Article 6(1)

“Right to a fair trial

In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

Under the ECHR states can generally adopt retrospective legislation to regulate rights under existing laws in civil matters. However, retrospective legislation in a civil context may be challenged under Article 6 where it is designed to influence the outcome of an existing dispute: Zielinski, Pradal, Gonzalez and Others v France [1999] ECHR 108. Such legislation will only be compliant with Convention rights where there are “compelling grounds of the general interest” (ibid at [57]), such as remedying defects in previous legislation (National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v the United Kingdom [1997] ECHR 87).

The same principles have been applied domestically, for example in the recent case of Enterprise Managed Service Ltd & Anor, R (on the Application Of) v Secretary of State for the Ministry of Housing, Communities and Local Government [2021] EWHC 1436 (Admin).

The requirement in Article 6(1) that hearings take place “within a reasonable time” generally refers to the length of proceedings once they have started, but the European Court of Human Rights has previously emphasised that:

“[L]imitation periods serve several important purposes, namely to ensure legal certainty and finality, protect potential defendants from stale claims which might be difficult to counter and prevent any injustice which might arise if courts were required to decide upon events which took place in the distant past on the basis of evidence which might have become unreliable and incomplete because of the passage of time (see Stubbings and Others v. the United Kingdom, 22 October 1996, § 51, Reports 1996‑IV)” (Oleksandr Volkov v Ukraine 21722/11 at [137]).

In that case the Court found a breach of Article 6(1) where there was no prescribed limitation period. Whether the extension of the limitation period could breach a defendant’s Article 6 rights will be fact specific and will depend on whether the lapse of time has caused difficulties in preparing a defence.

Article 1(1) of the First Protocol

“Protection of property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”

In order to establish that Article 1 rights are engaged, a defendant would need to show that the extended limitation period led to interference with its possessions. The meaning of “possessions” is fact-specific but refers to proprietary rights and has been held to include inter alia judgment debts, company shares and other financial instruments of economic value, professional clientele, business licences and leases over property.

Article 1(1) rights could conceivably be engaged by a retrospective extension of a limitation period, though the issue is far from straightforward. If Article 1(1) was engaged, it would be necessary to consider whether any interference with possessions could be justified by public interest considerations.

This is an issue which, if the Bill is enacted in this form, will quickly come before the Courts.

Authors: James Leabeater QC and Clementine Makower

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