Limitation that knows no bounds: has this been given adequate consideration?

Henrietta Gordon

Insight

5 minutes

02 February 2026

When assessing risk, and in particular when acquiring another company, the exposure to claims arising from historic events should not be overlooked.

Standard long stop protection provided by Section 14B of the 1980 Limitation Act: ‘the 15-year rule’.

In simple terms, a civil claim for damages for negligence cannot be brought fifteen years from the date (or, if more than one, from the last of the dates) of that act or omission. This is in effect to avoid creating indefinite liability.

The exceptions to the 15-year rule

There are two key ways that claimants can circumvent the protection afforded to potential defendants by the 15-year rule.

Deliberate Concealment

Where there has been ‘deliberate concealment’ and ‘deliberate breach of duty’ for the purposes of sections 32(1)(b) and 32(2) of the Limitation Act 1980 a party will not be protected from a civil claim by the 15-year longstop rule.

This risk exposure was brought to the fore in the recent Supreme Court decision handed down in Hopcraft v Close Brothers Ltd [2025] UKSC 33 and the FCA motor finance compensation scheme, which is proposing to include customers who were treated unfairly as far back as 2007 i.e. over 15 years ago. The scheme goes beyond 15 years because the Supreme Court found there to have been deliberate concealment as to the commission paid to the broker and the failure to disclose the contractual tie with the lender.

Complaints to the FOS are not restricted by the 15-year rule

A complainant may bring a complaint to the FOS three years from “the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint;”

This was not an accident, and the longstop is not to be implied. The decision to omit the longstop was a deliberate policy decision.

The decision was also specifically considered in the context of the Financial Advice Market Review FAMR March 2016 which was headed by Tracy McDermott then the head of the FCA.

“Some respondents to the Call for Input felt strongly that the risk of indefinite liability has a negative impact on financial advice businesses…other respondents felt that the introduction of such a longstop would not reflect the reality of financial services advice, where many products sold are very long term and consumers cannot reasonably be expected to realise they have a cause for complaint for many years, because it can be very difficult to assess the quality of advice earlier on.”

The FCA had relied on data from the FOS which it said showed comparatively few complaints made in respect of investments from over 15 years ago. The FCA said that as a result the risk of indefinite liability was not so large and that it would not be in the interests of consumers to remove the protection under the FOS rules from the 15-year longstop.

Pensions, loan agreements and mortgages are examples of financial products which could be subject to review many years later.

Obligation to self-report

Insureds are under a regulatory obligation to consider providing appropriate and proportionate redress. It is likely to be reasonable if a regulated entity finds an issue to take a proactive approach.

DISP 1.3.6

Where a firm identifies (from its complaints or otherwise) recurring or systemic problems in its provision of, or failure to provide, a financial service or claims management service, it should (in accordance with Principle 6 (Customers' interests) and to the extent that it applies) consider whether it ought to act with regard to the position of customers who may have suffered detriment from, or been potentially disadvantaged by, such problems but who have not complained and, if so, take appropriate and proportionate measures to ensure that those customers are given appropriate redress or a proper opportunity to obtain it. In particular, the firm should:

  1. ascertain the scope and severity of the consumer detriment that might have arisen; and
  2. consider whether it is fair and reasonable for the firm to undertake proactively a redress or remediation exercise, which may include contacting customers who have not complained.

The entity is likely to have to look at the standards in practice at the time the advice was given.

Given that no 15-year long stop protection applies this could involve looking back at advice or a service provided 20 years ago.

Another question is not just the overall period for review but how the firm approaches the customers affected. For instance, does this obligation involve actively approaching customers and informing them a review is being undertaken or inviting them to respond positively if they wish to have their file reviewed? Such an obligation would be a regulatory responsibility but any legal liability arising should then trigger an insured’s PI insurance policy subject of course to terms and conditions.

Quantum and the FOS cap in assessing risk exposure

When calculating the redress payable, consideration should be given to whether any redress payable should be limited to what would have been paid by the FOS and if so would it be the cap at the time the investment advice was provided or the cap which is in place at the time when the redress scheme is being calculated.

Potential Limitation changes on the horizon

The FCA is considering whether to modernise the redress scheme which includes reforming the current limitations rules that allow complaints to the FOS for allegedly negligent advice or services provided over 15 years ago.

Some industry stakeholders have argued the lack of a longstop date creates uncertainty, leading to difficulties securing professional indemnity insurance and potentially deterring investment.

The Treasury is consulting on introducing a 10-year longstop date within which complaints must be brought to the FOS. However the Treasury also proposes to give the FCA limited flexibility to make exceptions to this, where longer timeframes are justified in exceptional circumstances. Consumers would keep the right to bring cases to the courts outside of the longstop, subject to any existing rules and statutory time limitations e.g. a claim based on concealment.

    Take aways

    • Ensure that any due diligence carried out has considered the potential risks arising from financial products or services provide to those that could bring a complaint to the FOS because any liability to them is in a sense currently limitless; i.e.
      • individual customers
      • micro enterprises
      • small businesses; and
      • some charities and trusts.
    • Has appropriate consideration been given to whether an acquired company has purchased run off cover and even if they have done with an average life span of 6 years that cover may have expired in any event.
    • Be alive to the rear view mirror.

    Author

    Photo of Henrietta Gordon

    Henrietta Gordon

    Head of Financial Institutions Claims
    Photo of Henrietta Gordon

    Henrietta Gordon

    Head of Financial Institutions Claims

    References