The law of prescription and limitation in Scotland is ever evolving and has undergone significant reform in recent years. Although the governing statute remains the Prescription and Limitation (Scotland) Act 1973, the coming into force of key provisions of the Prescription (Scotland) Act 2018 on 1 June 2022 fundamentally altered calculation of the date from which the five-year prescriptive period starts in claims for damages.
In practical terms, determining when the prescriptive period begins could be categorised into two distinct regimes:
- one applicable to obligations which prescribed before 1 June 2022, and
- another governing obligations that have not prescribed before that date.
These regimes run concurrently. The new provisions do not have retrospective effect and therefore practitioners will have to grapple with ‘old’ section 11(3) of the Prescription and Limitation (Scotland) Act 1973 for some time to come. Determining the applicable regime is essential for evaluating the validity of a claim, assessing potential risks and developing an effective litigation strategy.
In terms of when the prescriptive period begins, careful analysis must be made when considering whether a claim falls under the ‘old’ or ‘new’ regime. The pre-June 2022 position is more favourable to those defending a court action; whereas the new regime created by the Prescription (Scotland) Act 2018 makes changes that are advantageous to pursuers.
Section 11(3): knowledge and discoverability before the 2018 Act
For most civil claims based on breach of contract or delict, section 6 of the Prescription and Limitation (Scotland) Act 1973 provides for short‑negative prescription of five years, running from the date when the obligation became enforceable.
Where a claim for damages is involved, the commencement of that five‑year period is governed principally by section 11(1), subject to certain ‘saving’ provisions, including section 11(3). Under the 1973 Act section 11(1) the prescriptive period of 5 years begins to run on the date that loss, injury or damage occurs. The start of the 5 year time period can be delayed under section 11(3) where a pursuer has suffered that loss, injury or damage but is not aware or could not with reasonable diligence have become aware that loss, injury or damage caused had occurred.
The courts have interpreted section 11(3) restrictively. Knowledge of the occurrence of loss is the key trigger and knowledge of fault, negligence or wrongdoing is not required. In many professional negligence cases, this has resulted in prescription running (and sometimes even elapsing) long before a pursuer appreciated that something had gone wrong. The judicial interpretation on knowledge of loss has evolved over the last decade:-
- David T Morrison & Co Ltd v ICL Plastics Ltd (and Others) [2014] UKSC 48 - held that the prescriptive period applicable to a claim for damages starts when loss, injury or damage first occurs. If a pursuer is aware or should be aware of the fact that the loss, injury or damage has occurred then section 11(3) cannot be used to postpone the start of the prescriptive period. The prescriptive period will therefore run even though the pursuer does not yet know that the loss, injury or damage which has occurred was caused by a negligent act or breach of contract by another party.
- Gordon's Trustees v Campbell Riddell Breeze Paterson LLP [2017] UKSC 75 - held that where the loss, injury or damage takes the form of economic loss (as opposed to physical damage) then the loss occurs when the pursuer first becomes financially disadvantaged.
Section 11(3) cannot be used to postpone the commencement of the 5 year prescriptive period if the party claiming damages for the loss “…is aware that he or she has not obtained something which the creditor had sought or that he or she has incurred expenditure.”
For example, if the loss is suffered as a result of incurring expenditure in reliance on professional advice then awareness of the fact that expenditure has been incurred means section 11(3) cannot be relied on to delay the start of the 5 year prescriptive period. Prescription will run from the date the expenditure was incurred.
- Midlothian Council v Raeburn Drilling and Geotechnical Ltd [2019] CSOH 29 - applied Morrison and Gordon’s Trs in the context of a claim arising out of construction of houses in reliance on engineering advice. It was held that loss had occurred as soon as the pursuer had incurred expenditure on construction of the development in reliance upon the defenders' advice. Section 11(3) could not delay the start of the prescriptive period because the pursuer was aware it was incurring that expenditure and was therefore aware of the loss.
- Tilbury Douglas Construction Ltd v Ove Arup and Partners Scotland Ltd [2024] CSIH 15 – reaffirmed Gordon’s Trustees and held that section 11(3) cannot be relied upon once the pursuer is aware of having sustained loss. Awareness of having entered into a fixed price design and build contract was sufficient to prevent section 11(3) postponing the prescriptive period. (see detailed analysis on Tilbury Douglas here)
It was recognised in Gordon's Trustees and Midlothian Council that these outcomes resulted in harsh consequences for pursuers.
Post-1 June 2022 claims: the new test for awareness
Where an obligation to pay damages has not already prescribed by 1 June 2022 under the old version of the law, the new section 11(3A) of the Prescription and Limitation (Scotland) Act 1973 applies. The new section could have the effect of delaying the commencement of the prescriptive period in many cases. Under section 11(3A), a pursuer can seek to establish that the 5 year prescriptive period did not commence until the date the pursuer was aware of all three of the following facts:-
(i) that loss, injury or damage has occurred;
(ii) that the loss, injury or damage was caused by a person’s act or omission; and
(iii) the identity of that person.
The clock will begin only when a pursuer has actual or constructive knowledge of all three of those facts. This change was designed to deal with the perceived unfairness of the Supreme Court decision in Morrison. It is not yet clear whether the change will also avoid difficulties encountered in relation to economic loss sustained following reliance on professional advice. It is an area where certainty will only come after the court’s have had suitable cases to consider.
The application of the new section 11(3A) has recently been judicially considered for the first time in the connected cases of Ogilvie Construction Ltd v M1 RE Glasgow Ltd and Ogilvie Construction Ltd v Leach Rhodes Walker Ltd [2026] CSOH 44. These were cases involving economic loss without physical damage. Loss occurred for both the design and build contractor and the employer as soon as construction commenced on a building in reliance on allegedly faulty design. Lord Lake held that the new section 11(3A) did not postpone the commencement of the prescriptive period beyond the date on which expenditure had been incurred. The test for knowledge of the first fact - occurrence of loss – remains as set out in existing cases on the old s.11(3). As far as the other two facts required by s.11(3) are concerned, in an expenditure/reliance case “… what is required is that the parties should be aware that the building was constructed in accordance with a design prepared by a known party.”
Section 13 the Prescription (Scotland) Act 2018 also permits parties to extend the prescriptive period by entering into a s.13 agreement. The prescriptive period is not suspended (as it often is under a standstill agreement in England); instead, parties may agree to a single extension period which cannot be longer than one-year. This extension can only be agreed once the relevant prescriptive period has already begun but not yet expired.
Which regime applies?
Accordingly, the first step in any prescription analysis in claims for damages is now to ask: Did the five‑year prescriptive period expire under the old law prior to 1 June 2022?
If the answer is yes then the amended versions of s.11(3) and (3A) have no relevance. If the obligation to pay damages still existed under the old law until 1 June 2022 the new regime applies and a pursuer can seek to take advantage of the expanded knowledge test in s.11(3A).
Care must be taken to consider the position under both the old and new law and it is always advisable to diarise the earliest possible date for prescription when instructed to pursue a claim.
Steph Barratt, Alisdair Matheson and Douglas McGregor are part of Brodies’ Professional Risk Team.
Last updated September 2026
