The Discoverability of Mistakes of Law
Posted: 28 Feb 2019
Date Written: July 25, 2018
With unprecedented legal reforms looming upon Brexit, trouble in the drafting and application of laws seem inevitable. It may be decades before the implications are fully appreciated. Actions taken on the basis of a statutory provision that is later held to be void, or on a past precedent that is overruled, may found a restitutionary claim in mistake of law. Under the precedent of Kleinwort Benson v LCC  2 AC 349 and Deutsche Morgan Grenfell v IRC  1 AC 558, the limitation period on such actions will be postponed until the “true” state of the law is declared by the courts and becomes “discoverable.” Scholarly debate over the House of Lords’ landmark decisions has tended to focus on whether those cases raised a genuine “mistake” in the law of unjust enrichment and whether the courts should have deviated from the declaratory theory of judicial decision-making. This paper argues that it was not the courts’ declaratory philosophy that was necessarily problematic. It was the misapplication of the principle of discoverability in s.32(1)(c) Limitation Act 1980.
The English courts’ approach to the discoverability of mistakes of law pivots between inconsistent conceptions of adjudication in a way that strains the jurisprudence. The courts utilize a declaratory view for the purposes of determining the basis for a mistake, but fail to carry that view into the determination of when that mistake can be discovered. The paradox arises that parties may be deemed to have held a mistaken view of the law at a time when the law giving rise to their mistake did not exist. This has led the doctrine to a state of incoherence. It has also undermined important policy values. Perpetual postponement of limitation on actions arising from legislative errors undermines principles of certainty and settlement of expectations. This paper provides a timely reorientation of the discoverability of mistakes of law.
Keywords: private law, restitution, mistake of law, Limitation Act, limitation postponement, reasonable diligence, abuse of process, settled view of law, Franked Investment Income Group Litigation, Prudential Assurance, Ipswich Town Football Club v Suffolk Constabulary, AB v Ministry of Defence
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