The recent decision in Heath Lambert Limited v Sociedad de Corretaje de Seguros [2004] Lloyd’s Rep IR 905 is of particular significance to the marine reinsurance market. It raises important questions on the limitation periods for premium claims, and may also have wider implications for the operation of S.53 of the Marine Insurance Act 1906.
English law has almost since its origins recognised the need to protect the defendant against a stale claim. There are two basic reasons for imposing a statutory limitation period. First, with the passing of time, evidence and witnesses become increasingly unreliable. Secondly, although this is admittedly less of a problem in the modern computer age, the defendant cannot be expected to retain his files on all matters indefinitely.
