THE DISCOVERABILITY OF MISTAKES OF LAW
The “mistake of law” category of unjust enrichment might be a more obscure cause of action were it not for s.32(1)(c) of the Limitation Act 1980. That provision postpones the limitation period in cases of “mistake”. Recent landmark judgments have interpreted s.32(1)(c) to extend time for bringing actions in mistake of law until there has been an authoritative judicial pronouncement on the point of law in issue. This understanding of discoverability is arbitrary, jurisprudentially strained and internally inconsistent. It gives rise to serious problems in doctrine and policy. The courts should revisit their jurisprudence and consider the more coherent understandings of the discoverability principle that others have previously advanced.
The past two decades have seen a swell in restitutionary actions grounded in mistake of law. What drives these actions is the favourable limitation position afforded by the principle of discoverability.1
Section 32(1)(c) of the Limitation Act 1980 (“LA”) provides that where an action is for relief from the consequences of a mistake, the period of limitation does not begin to run “until the plaintiff has discovered the … mistake … or could with reasonable diligence have discovered it”. A mistake of law arises when a claimant transfers a benefit to another under an erroneous belief that the law requires it. Since the House of Lords’ landmark decision in Kleinwort Benson Ltd v Lincoln City Council
English courts have held that mistakes of law are discoverable, and time under LA, s.32(1)(c) begins to run, once there has been an authoritative judicial pronouncement on the point of law in issue.3
This understanding expands the timeframe for litigation that
The discoverability of mistakes of law