The Gazette 1971

However, I have found no authority to support an extension of 'concealment by fraud" to non-dis- closure by a lawyer of his knowledge, acquired within the limitation period, that his client has a cause of action against him for negligence. As distinct from the 'passive concealment" by non-disclosure, any "active concealment", e.g. by persuading the client not to take out of the lawyer's custody his documents which might reveal the negligence, would probably be held to be fraudulent. Some correspondents suggested special pro- tection "where a fiduciary relationship exists i.e. if the client is an infant, very elderly or illiterate" (infancy is generally excluded from the period of limitation). In Germany "the lawyer has to inform his client about the negligent act or omission, otherwise the time for limi- tation might not start to run." The effect of fraud on limitation It being one of the prime ethical requirements of the lawyer's profession that he deal fairly with his client, one might well ask whether the rule in Germany is not closer to the professional ideal than the exception of concealed fraud. The lawyer is sometimes in a position of advantage vis-a-vis his client in the matter of his negligence. With knowledge of the negligence having occurred, he might also be aware of circumstances likely to delay the client's discovery of the negligence—for example if he were holding the client's documents and without fraud, but by not informing his client of his negligence, he could gain the benefit of the defence of limitation. The answer to the suggestion that his client ought to be informed by the lawyer of the negligence and advised that he has a right of action against the lawyer, can only be given simply where the lawyer is insured. He is then bound by the terms of his policy to inform his insurer as soon as he becomes aware of the negligence and to make no disclosure of it to his client. As to the uninsured lawyer, mere non-disclosure should not bar the limitation defence, as it would be unreal to postulate different standards of conduct for insured and uninsured lawyers. One feature of limitation particularly concerns the lawyer holding a professional indemnity insurance policy who retires from practice. If he neglects to continue an adequate insurance during the period of limitation following his retirement he risks the consequences of his negligence within the period. Since the law on limitation of action is a matter of domestic policy for each country to determine, one can merely express the view that unduly long periods of limitation are undesirable and unreasonable and would appear to be a proper subject for the law reformer's attention. The general conclusions I have formed in regard to limitation of action against a lawyer for his professional negligence are : (1) that the normal period of limitation should apply to such actions; (2) that time should run from the commission of the act or from the omission which constitutes the negli- gence ; (3) that in the case of fraudulent concealment by a lawyer from his client of the lawyer's negligence, time should run from the date of the client's discovery of the negligence; (4) that, apart from the exception in (3), no special protection in the matter of limitation ought to be given to a client to compensate for the lawyer's position of advantage. 75

Most other correspondents report that their professional bodies will not become involved in a claim by a client that a member has acted negligently unless the negli- gence also amounts to professional misconduct. Many of the complaints made to these bodies show that the lawyer may have been negligent but that otherwise he has acted with perfect professional propriety. The com- plainant in such cases is left to his remedy in the Courts. As to what might constitute negligence, it is generally agreed that a substantial body of evidence by lawyers, that in the conduct complained of the defendant lawyer was following a well recognised practice, would norm- ally be sufficient to entitle him to a verdict. However, in some places where civil actions are tried by jury, a law- yer sued for negligence would require almost over- whelming evidence of that nature to secure a verdict. This is probably a factor contributing to the high cost of professional indemnity insurance. Division 3: Limitation The relevance of limitation provisions to the topic, is perhaps, incidental. It does not lie in the very wide range of limitation periods—from the Netherlands "No specific time limit, ergo thirty years", and Scotland, where the period is twenty years from the facts coming to the pursuer's knowledge, to South Africa where the period is one year from the act giving rise to the claim. The question whether the cause of action is in contract or in tort is of real importance in relation to periods of limitation. In some countries different periods of limi- tation apply to contract and tort. Switzerland, for example has a ten years period in contract (ten years, that is, from the breach) and in tort one year from knowledge of the damage and of the person liable; but, in any case within ten years of the negligent act. Where the cause of action is in contract the period of limitation, whatever it may be, generally runs from the breach, with a special exception in the case of fraudu- lent concealment by the lawyer of his negligence. The interest which the question has for lawyers is exemplified by a letter written to the N.S.W. Law Society Journal by a Sydney solicitor asking "How long should solicitors keep their files?" and pointing out that in some cases an action against a solicitor in respect of his negligence might be brought many years after the act giving rise to the claim because the period of limita- tion would begin to run from the damage. (A claim by a client, being based on contract, would be limited in New South Wales to a period of six years from the act causing damage : the only possible exception, apart from actions in tort such as might be brought against any person, would be a claim based on the Hedley Byrne principle.) An unusual limitation applies in the United Arab Republic, whose Mr. K. Halim reports that "the law on the legal profession stipulates that after five years a client cannot claim any document or right from his law- yer and the period of limitation runs only from the termination of the relationship between the lawyer and his client." It is generally thought by correspondents that suffi- cient protection is given to a client by the stipulation (where it exists) that time does not run in the case of fraudulent concealment by a lawyer of his negligence. Presumably, "fraudulent concealment" would not be confined to its literal meaning, with the ingredients of deceit and dishonesty. Non-disclosure of a payment made bv a third party for the plaintiff's benefit, within the limitation period, was held in Kitchen v Royal Air Forces Association 18 to be such an extension of the word "fraud" in Section 26b of the Limitation Act, 1939