Construction Prescription Reform Put To The Test

The first reported decision on the 2018 reforms to Scotland's prescription rules has produced a surprising result for the construction industry and those dealing with latent defects claims.

In Ogilvie Construction Ltd v M1 RE Glasgow Ltd, the court held that a claim may begin to prescribe before the claimant knows – or could reasonably know – that a defect exists.

The decision is the first to consider the amended “discoverability” provisions introduced by the Prescription (Scotland) Act 2018 and could have significant implications for construction professionals, developers, property owners and their advisers.

The outcome is striking. A claim may be lost before the claimant realises that anything has gone wrong. That is likely to cause concern in sectors such as construction and property investment, where defects can significantly reduce property values.