Key takeaways
Limitation can defeat strong claims
Claims may fail before negligence allegations are considered.
Loss may occur at deal signing
Limitation can start before consequences become apparent.
Investigate concerns without delay
Waiting too long risks losing the right to claim.
The High Court’s recent decision in Three R Tourism and Hospitality Ltd & Others v Orrick Herrington & Sutcliffe (UK) LLP [2026] EWHC 1844 (KB) is a reminder that, in professional negligence claims, the first battleground is often not whether the advice was negligent, but whether the claim was brought in time.
The Claimants alleged that Orrick’s advice on a 2018 investment transaction left them exposed to a ‘predatory investor’ whereby, within 15 months of the transaction, they had lost management control, were forced to surrender their shareholding for nominal consideration and were left to face liabilities of around US$28.4 million.
The Court did not consider the merits of the underlying allegations as the case failed on limitation grounds before it could get that far.
The Claimants argued that they first suffered a loss in January 2020, when a contractual conversion mechanism was exercised and they effectively lost their interest in the business. Orrick argued that any loss arose when the transaction was entered into in November 2018. The Judge accepted Orrick’s analysis.
Consistent with established authorities such as Nykredit Mortgage Bank Plc v. Edward Erdman Group Ltd [1997] UKHL 53; [1998] 1 ALL ER 305; [1997] 1 WLR 1627 (27th November, 1997), the Court held that, on the Claimants’ own case, they were already financially worse off when they entered into the transaction. If the deal was in fact flawed, as alleged, any actionable loss arose at the outset and not when their consequences later became apparent.
The Court also rejected the Claimant’s attempt to rely on section 14A of the Limitation Act 1980. Section 14A can give claimants an additional three years to bring a negligence claim where the relevant facts were not known when the loss was first suffered. The key question was not when the Claimants actually knew, but when they ought reasonably to have known. By 2020 they had lost control of the business, lost their positions and suffered substantial financial consequences. The Judge considered that a reasonable person in the Claimants’ position would have investigated how the situation had arisen long before they did.
Of particular interest is the Court’s willingness to deal with these issues on a summary judgment application. Although limitation disputes are often fact sensitive, the Judge described this case as unusually clear cut because the delay was ‘truly extraordinary’ and concluded that there was no realistic prospect of the Claimants overcoming the limitation defence.
The decision is a useful reminder that limitation does not necessarily run from the point at which a transaction unravels or its consequences become fully apparent. Companies should therefore investigate concerns promptly rather than wait for the full extent of any loss to crystalise. As this case demonstrates, sometimes the damage was done the moment the deal was signed.
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