causes of action (meaning, limitation periods, jurisdiction)

Cause of Action: Meaning

Broadly speaking, a cause of action is the legal right on which a claimant sues.

A cause of action is a label for a type of facts which will justify a court award a legal remedy. If on the pleaded case, the court is able to award a remedy, there is a cause of action.  

Firstly, there are the established categories of causes of action, such as those in contract, tort or under statute. You’ve heard of these: breach of contract, fraudulent misrepresentation, trespass, conspiracy, tort of negligence, passing off, copyright infringement, breach of fiduciary duty, and conversion. 

In this sense, a cause of action is a substantive legal right.

However, causes of action extend further than this.

The term causes of action can also refer to claims for interim relief which are ancillary to substantive rights.   It includes rights of action for interim relief, which are ancillary to a cause of action, such as:

• Norwich Pharmacal relief ordered to be given by a third party, to identify defendants which are unknown to the claimant
• the right not to be sued abroad because it would be unconscionable (which is enforced by an anti-suit injunction)
• an order for pre-action disclosure

A cause of action is not necessarily concerned with resolving a dispute between the parties.

 

Accrued Causes of Action

When factual events satisfy the elements of the substantive law or basis for interim relief – its “essential ingredients”, you have a legal right to sue for a remedy.

That is the cause of action: the legal claim advanced against the defendant.

In this way, the cause of action accrues. 

The facts which draw out the cause of action are stated in the particulars of claim or a counterclaim. 

 

Causes of Action: Legal Process

If the claimant is successful at the trial proving each of the facts which constitute the cause of action, they succeed.

The legal process happens in two stages:

1. Liability

Liability is claimed on a cause of action. There could be more than one claim in the particulars of claim.

For example, if you were to infringe my copyright, the cause of action is copyright infringement. It is your acts (which give rise to the relevant facts and events) which infringe my copyright. That "perfects" the cause of action, and permits me to sue you for copyright infringement.

So: cause of action =

• legal basis for liability (ie substantive law) +
• facts pleaded in a statement of case with a real prospect of success

If the court finds on the balance of probabilities that all of the essential ingredients (copyright infringement) successful, I win. If you make out a defence, the elements of the cause of action aren’t satisfied, and you win. 

So, success at trial for a claimant =

• cause of action +
• evidence to prove each of the essential ingredients of the cause of action on the balance of probabilities

Liability in law is established by proving the facts which satisfy the substantive area of law (or basis for interim relief).

2. Remedy

For every cause of action there is at least one remedy. The most common remedies are damages and injunctions. 

There are others. It depends on the cause of action.

Property Rights

The technical name for a legal right to sue is a chose in action: it's a property right. It can be bought and sold like any other property.

Related Concepts

There are a series of closely related concepts to causes of action in law:

• Limitation Periods
• Jurisdiction
• Standing to Sue: locus standi

 

Cause of Action: Examples

Example: Passing Off

The tort of passing off:

• is a tort, aka a civil wrong
• protects a claimant's business from (amongst other things) a defendant making representations to the buying public that the claimant’s business is the business of the defendant. The defendant says that its own business is the claimant's.
• has 3 essential ingredients which must be established by the claimant to establish liability:
  • The claimant has relevant goodwill and reputation
  • The defendant made a misrepresentation that some aspect of the claimant’s business is the business of the defendant
  • Damage to the goodwill and reputation of the claimant, such as a loss of sales.
• is a cause of action

In that example:

1. The law of passing off is the substantive area of law
2. It is for the claimant to:
   1. set out in its Particulars of Claim the allegations of fact, which satisfy essential ingredients of passing off, to make its cause of action, and then
   2. present evidence (in witness statements) of those alleged facts
   3. to prove the 3 essential ingredients of passing off on the balance of probabilities
3. It is for the defendant to:
   1. set out in its Defence the allegations of fact that one or more of the 3 elements of passing off have not been satisfied by the claimant, and
   2. show that on the balance of the probabilities
4. The court evaluates the evidence of each of the parties.

If the court decides that:

• the claimant has proven (ie discharged the burden of proof on the balance of probabilities) the 3 essential ingredients of passing off, the claimant wins;
• the defendant proves (ie discharges the burden of proof) that any one of the 3 elements is not satisfied on the balance of probabilities, the defendant wins.

 

Example: Law of Misrepresentation

A claimant, claiming that there were induced to make a contract based on a false statement needs to allege facts which satisfy the following criterion on the balance of probabilities have a cause of action in misrepresentation:

1. Negligent misrepresentation is the substantive area of law
2. To succeed in a claim for negligent misrepresentation, the claim must show:
   1. The defendant made a representation intended to induce another person to enter a contract
   2. The representation was a statement of fact
   3. The statement was false
   4. The claimant relied on the misrepresentation to enter the contract
3. The remedies for misrepresentation are rescission and damages.

The claimant must prove the cause of action with evidence on the balance of probabilities just as with the passing off claim above.

Here’s another example when suing for breach of contract.

 

Why are Causes of Action Important?

Causes of action are fundamental in three ways in civil litigation.

• Limitation Periods
• Jurisdiction
• Standing to Sue: locus standi

1. Limitations Periods

Every cause of action has a limitation period.

The Limitation Act 1980 applies to give the defendant a complete defence to the claim when the time expires to serve the claim form expires.

The Limitations Act 1980 sets up limitation periods for different categories of claim, and other statutes do for more specialised types of claims.

Where a type of claim does not fall within the strict meaning of one of the classifications, the court may still be persuaded that the limitation applies by way of analogy in a like manner.

Commencement of Limitation Periods

In most cases, the limitation period expires 6 years from the date that the last event required to complete the cause of action.  

Limitation periods commence at the time the cause of action accrues to the claimant: that means that the earliest time that legal proceedings could have been brought. So, every fact – to satisfy each essential ingredient - required to commence an action must have happened before time on the limitation period begins to run.

To assess the matter another way, assume that the claim form is issued on a specific date. The last fact giving rise to the claim must fall within the limitation period prior to the supposed date for filing the claim form.

Limitation periods in tortious claims run from the date damage is sustained by the claimant, rather than the date that the claimant came to know of the damage or discovered the damage.

Concealment

Limitation periods can also be postponed and/or revived in limited circumstances. 

If the defendant conceals information and the claimant does not know of relevant facts giving rise to the cause of action, time will not commence to run on a limitation period until the claimant learns of the relevant fact or should have come to know of the relevant fact, if it could have been discovered with reasonable diligence.

Limitations Defence 

Expiration of the limitations period creates a procedural defence only – it must be pleaded by the defendant in its statement of case –the Defence or Defence to Counterclaim.

Once the limitation period expires, the claim – cause of action – is said to be stale and is able to be struck out.

Limitations periods in English law apply as it’s contrary to public policy for people and entities to be perpetually exposed to litigation for wrongful acts.

So for example:

• A contract is formed between two parties on 1 January 2019
• It’s a 5-year contract
• On 1 June 2019, a party breaches the contract, giving rise to a right to damages
• The defendant knew of the breach the same day, 1 June 2019
• The innocent party has from 1 June 2019 plus 6 years to sue for the breach of contract
• At the end of that period, the defendant has an absolute defence to the claim for breach of contract.

A list of limitation periods appears further down.

 

2. Jurisdiction

The facts contributing to the cause of action may need to take place in a particular country for the legal claim – the cause of action – to exist in that country.

For instance, there will be no cause of action for a breach of contract under English law by a contract not governed by English law, and otherwise has no connection with England.

Geographical

The jurisdiction of a court is the territory over which a court has power to make and enforce orders.

When it is used in this sense, it is a geographical area over which the Court exercises legal authority.  The jurisdiction of English Courts is England and Wales and any part of the territorial waters of the United Kingdom adjoining England and Wales.

Jurisdiction to Adjudicate

Jurisdiction is used in another sense.

It indicates whether or not a court has power to adjudicate a dispute.

If a Court is competent to hear a dispute, it is said to have jurisdiction.

Jurisdiction may be disputed on the basis of the nature or characteristics of the parties to the litigation or the characteristics of the dispute before it.

Parties may challenge a court's authority on the basis of jurisdiction to decide a dispute.

For example, if the dispute has no connection with England or Wales, an English Court is likely to decline jurisdiction to decide the matter. 

International Jurisdiction of English Courts

The extraterritorial (aka "exorbitant") jurisdiction of English Courts is fixed by CPR 6BPD 3.1.

Where a cause of action (or any part of it) does not satisfy the requirements of one of the gateways provided to exercise its exorbitant (or international) jurisdiction as set out in CPR 6BPD 3.1, English Courts do not have power to exercise its jurisdiction in relation to the dispute.

It is not relevant whether some other Court would be a more appropriate forum for the parties to resolve and determine their disputes.

English courts will have jurisdiction against foreign defendants (whether a company or individual) where:

• the defendant submits to the jurisdiction
• at common law, a defendant is in the jurisdiction, even on a transitory basis, and they are properly served in accordance with the Civil Procedure Rules
  The court may decide at a later date that English courts and the lex situs is forum non conveniens and stay the proceedings
• a rule of law permits the claimant to serve the defendant out of the jurisdiction.
  Treaties or conventions have been ratified by the UK which give jurisdiction to English Courts to exercise its jurisdiction abroad by the:
  • Administration of Justice Act (1920)
  • Foreign Judgments (Reciprocal Enforcement) Act (1933)
  • Civil Jurisdiction and Judgments Act (1982)
  • Judgments Regulation (ie Council Regulation (EC) No 44/2001 of 2000), pre-Brexit, or
  • Lugano Convention, pre-Brexit
• Where no treaty or convention exists with the country or territory in question, the claimant must rely on the common law jurisdiction of the English Courts.
  This relies entirely on the ability of the Court to authorise service of the claim form on the defendant.
  This power is regulated in practice by CPR 6BPD. The Court will consider whether England is the most appropriate forum for a trial on the issues to be litigated (a forum conveniens).

Also, it may be that a claimant is not recognised by English Courts, because the claimant does not have  locus standi, or capacity to sue (such as a minor), or a defendant has immunity from suit (such as a diplomat).

 

Standing to Sue: locus standi

A cause of action gives a person a right to sue.

Standing to sue, is also known as "locus standi" (or "locus" for short, from the Latin "A place to stand on").

Where a person has no interest at all, or no sufficient interest to support a particular legal claim or action, the person will not have locus standi and thus no standing to sue. It’s a threshold test.

In some areas of law, the rules are quite rigid.

For example in contract law, a person who is not a party to a contract does not have standing to sue unless they’re a party to the contract, or they have a specific type of interest in the contract, as stated in the contract or under the Contracts (Rights of Third Parties) Act (1999).

The test for a locus standi is a "sufficient interest". That sufficient interest will not be the same in all cases.

Criterion for Standing to Sue

Where a party's standing to sue is called into question or is in doubt, a court will consider:

• the established law
• the powers or the duties in law of those against whom the relief is asked
• the position of the claimant in relation to those powers or duties, and
• the breach of those interest said to have been committed.

The question of sufficient interest is not considered in the abstract, or as an isolated issue.

It must be taken together with the legal and factual context of the cause of action. Sufficient interest is required in the matter to which the proceedings relate.

Examples of Locus Standi

• contract law - historically speaking, Courts insisted that only parties to a contract may sue in relation to the contract.
  This is privity of contract.
  The position has changed with the passage of the Contracts (Third Party Rights) Act 1999.
  Now, provided the operation of the Act is not excluded in the contract:
  • a person who is expressly stated to have the right to enforce a term of the contract, or
  • a term of the contract confers a benefit on a third party person has locus standi to sue in respect of those rights.

• trademark law:
  • proprietors of trade marks have locus standi to sue for infringement;
  • any person "aggrieved" by a groundless threat of infringement, has standing to sue for the threat (subject to a series of exceptions);
  • an exclusive licensee of a trade mark has locus standi to sue for infringement subject to a number of conditions set out in sections 30 and 31 of the Trade Marks Act 1994
• patent law: any person has the right to challenge a patent;
• torts: a person suffering damage as a result of the tort. Some torts grant standing to sue even where damage is not suffered, such as trespass to land.

In AXA General Insurance Limited and others (Appellants) v The Lord Advocate (Scotland) [2011] UKSC 46, Lord Hope said:

Like Lord Dunedin in D & J Nicol v Dundee Harbour Trustees, I would not like to risk a definition of what constitutes standing in the public law context. But I would hold that the words "directly affected" which appear in [the rule] capture the essence of what is to be looked for. One must, of course, distinguish between the mere busybody, [...] and the interest of the person affected by or having a reasonable concern in the matter to which the application related. The inclusion of the word "directly" provides the necessary qualification to the word "affected" to enable the court to draw that distinction. A personal interest need not be shown if the individual is acting in the public interest and can genuinely say that the issue directly affects the section of the public that he seeks to represent.

In R v Inland Revenue Commissioners, Ex p National Federation of Self-Employed and Small Businesses Ltd, the Court found that a union did not have sufficient standing to sue on behalf of Fleet Street casual workers working in the printing industry.

Locus standi is one of the safeguards against the courts being flooded and public bodies harassed with legal proceedings.

 

Limitation Periods:

The main categories of limitation period are set out below.

Type of Claim	Limitation Period; Section under Limitations Act 1980
Contract	6 years; s 5
Awards in Arbitration	6 years; s 7
Specialty debt (debts arising under seal)	12 years; s 8
Debt arising under statute	6 years; s 9
Claims for contribution under the Civil Liability (Contribution) Act 1978	2 years; s 10
Personal Injury	3 years; s 11(4)
Negligence	In most instances 6 years, otherwise 3 years; s 14A
Recovery of Land	12 years; s 15
Claims to recovery money secured by mortgage or proceeds of sale of land	12 years; s 20
Fraudulent breach of trust	No limit; s 21
Breach of trust	6 years; s 21
Claims for an account of profits	Relies upon the legal basis relied upon to assert the entitlement to an account
Enforcing a judgment debt or other order	6 years; s 24
Tort	General rule: 6 years; s 2
Defamation and Malicious Falsehood	1 year; s 4A
Judicial Review	3 months; CPR
Breach of fiduciary duty	6 years, in certain circumstances, no limit

 

Civil Dispute Lawyers and Attorneys

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