Section 6(4) Induced Error Requires Proof of Actual Reliance; Silence Unknown to the Creditor Cannot Suspend Prescription

1. Introduction

Greater Glasgow Health Board (“GGHB”) reclaimed (appealed) a decision of the commercial judge in an action for damages against Multiplex Construction Europe Limited (“Multiplex”) arising from alleged defects in atrium cladding at the Queen Elizabeth University Hospital (“QEUH”). GGHB maintained that atrium cladding required to meet Euroclass B fire resistance but did not.

Multiplex defended the claim on the merits and, critically, pled that any obligation to make reparation had been extinguished by the five-year prescriptive period under the Prescription and Limitation (Scotland) Act 1973. GGHB accepted that more than five years elapsed between practical completion and service of the summons, but argued (i) interruption by section 6(4)(a)(ii) (error induced by words or conduct) and (ii) postponement of commencement by section 11(3) (lack of awareness of loss).

Multiplex had “downstream” contribution claims against WSP UK Limited and Nightingale Architects Limited under collateral warranties; those parties contended that (whatever the outcome between GGHB and Multiplex) the claims against them were prescribed.

The reclaiming motion therefore raised: (a) what must be proved to engage section 6(4) induced error, especially where “silence” is relied upon; (b) the meaning of “awareness” of loss for section 11(3) in construction defect claims; and (c) the appellate court’s limited role in revisiting factual findings after proof.

2. Summary of the Judgment

The Inner House (First Division) refused the reclaiming motion and adhered to the commercial judge’s interlocutor assoilzieing Multiplex, WSP, and Nightingale.

  • Section 6(4) induced error failed on the facts: GGHB led no evidence that any relevant person within GGHB was in fact induced into an erroneous state of mind by Multiplex’s words, conduct, or silence, or that such error caused (or contributed to) refraining from making a claim.
  • Multiplex’s silence about its internal 2018 investigations could not induce error because GGHB was unaware of those investigations; something unknown cannot influence the creditor’s state of mind.
  • Even on the hypothesis of induced error, reasonable diligence would have ended it by May 2016, because GGHB (under CEL 11 and ordinary prudence) should have checked and verified the O&M Manual; its deficiencies would quickly have prompted investigation.
  • Section 11(3) did not postpone commencement: applying Gordon's Trustees v Campbell Riddell Breeze Paterson LLP and David T Morrison v ICL Plastics, GGHB’s “loss” was objectively incurred at practical completion when it took possession of (on its case) a disconform building and paid for works; knowledge of the defect’s details was not required.
  • Appellate restraint: the Inner House emphasised that, absent identifiable error, it will not re-weigh evidence or substitute its own interpretation of facts found at proof.

3. Analysis

3.1 Precedents Cited

(A) Appellate review of findings in fact

  • Clarke v Edinburgh & District Tramways Co 1919 SC (HL) 35: cited for the classic “plainly wrong” threshold for appellate interference with findings after hearing evidence.
  • Thomson v Kvaerner Govan Ltd [2003] UKHL 45; 2004 SC (HL) 1 and Thomas v Thomas 1947 SC (HL) 45 (with reference to Yuill v Yuill [1945] P. 15): reinforced the narrow circumstances in which an appellate court may overturn a trial judge’s view of evidence.
  • Henderson v Foxworth Investments [2014] UKSC 41; 2014 SC (UKSC) 203: supplied the modern formulation—interference only where the decision cannot reasonably be explained or justified, or there is an identifiable error (legal error, no evidential basis, misunderstanding, or failure to consider relevant evidence).
  • In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911: cited as consistent Supreme Court authority on appellate restraint.
  • Woodhouse v Lochs and Glens (Transport) Ltd [2020] CSIH 67; 2020 SLT 1203: used to emphasise the appeal court’s “narrow focus” compared with the trial judge’s full appreciation of the evidence as a whole.

(B) Prescription framework; section 11(3) and “objective” loss

  • Adams v Thorntons WS 2005 1 SC 30: relied on for the policy of prescription (avoiding stale claims) and the principle that the party seeking the benefit of section 6(4) or section 11(3) must demonstrate satisfaction of statutory conditions.
  • Dunlop v McGowans 1980 SC (HL) 73: cited for the concurrence of injuria and damnum as the trigger for enforceability under section 11(1).
  • David T Morrison v ICL Plastics [2014] UKSC 48; 2014 SC (UKSC) 222 and Gordon's Trustees v Campbell Riddell Breeze Paterson LLP [2017] UKSC 75; 2017 SLT 1287: central to the court’s rejection of GGHB’s section 11(3) argument. These authorities fix “loss” as an objective fact (including expenditure or acquisition of defective property), not the later appreciation that the expenditure was wasted or that there is a legally actionable head of loss.
  • Midlothian Council v Raeburn Drilling and Geotechnical Ltd [2019] CSOH 29, 2019 SLT 1327, WPH Developments v Young & Gault [2021] CSIH 39, 2022 SC 28, and Tilbury Douglas Construction v Ove Arup [2024] CSIH 15; 2024 SC 383: treated as part of the line of authority applying the Supreme Court’s objective approach to commencement of prescription in professional negligence/construction contexts.

(C) Section 6(4) induced error: elements, evidence, and the limited reach of “silence”

  • Tilbury Douglas Construction v Ove Arup [2024] CSIH 15; 2024 SC 383: heavily relied upon for the structure of section 6(4) proof (error; induced by debtor’s words/conduct; causation—refraining from claim; and identification of when the period of error began and ended) and for the insistence on evidence of the creditor’s erroneous state of mind and its influence on inaction. The court also endorsed (in this case) the caution expressed in Tilbury Douglas about treating routine billing/design/provision of services as sufficient “conduct” to suspend prescription.
  • Heather Capital Ltd (In Liquidation) v Levy & McRae [2017] CSIH 19; 2017 SLT 376: authority that “conduct” is defined liberally, need not be blameworthy, may include silence, and need not be the sole cause of the creditor’s refraining. The Inner House accepted these propositions but held GGHB still failed on evidence.
  • BP Exploration Co Ltd v Chevron [2001] UKHL 50; 2002 SC (HL) 19: cited to underline that interruption requires proof the creditor was misled into error and thereby refrained from claiming; the inquiry is fact-sensitive and the burden lies on the creditor to bring itself within the provision.
  • Caledonian Railway Co v Chisholm (1886) 13 R 773 and Rowan Timber Supplies (Scotland) v Scottish Water Business Stream [2011] CSIH 26: addressed and distinguished as not analogous. Caledonian Railway was decided under the Triennial Prescription Act 1579 without a section 6(4) equivalent; Rowan Timber involved positive issuing of charge notices in an unjustified enrichment setting.
  • AMN Group Ltd v Gilcomston North Ltd [2008] CSOH 90, 2008 SLT 835: relied upon by GGHB (especially in oral argument) for the proposition that prolonged inaction in the face of a legitimate expectation of expert advice may constitute relevant conduct. The court held it materially different: in AMN Group the pursuers were aware of problems but uncertain of scope and cause; here GGHB was unaware of any atrium cladding issue until 2021.
  • Stag Line Ltd v Tyne Shiprepair Group Ltd (The Zinnia) [1984] 2 Lloyd's Rep 211: invoked by GGHB to support a duty to speak/warn once Multiplex suspected non-compliance in 2018. The court found it of no assistance: it was not a prescription case; it was not pled as an implied term case; and—critically—the alleged “silence” about investigations could not induce error if GGHB did not know the investigations were occurring.
  • Glasgow City Council v VFS Financial [2022] CSIH 1, 2022 SC 133: used in the reasonable diligence discussion to support the concept of “constructive knowledge”—what a party would have known had it taken steps it reasonably could and should have taken.

(D) Corporate knowledge / attribution

  • Dryburgh v Scotts Media Tax [2014] CSIH 45; 2014 SC 651: cited for how a body corporate’s “state of mind” may be established—either through evidence of the “directing mind and will” or via agency principles. Although attribution arguments were debated, the Inner House treated them as ultimately immaterial because GGHB failed at the prior evidential step: no witness proved they were induced into error.
  • DPP v Haw [2007] EWHC 1931 (Admin); [2008] 1 WLR 379 and Noon (River Manager) v Matthews [2014] EWHC 4330 (Admin): advanced by GGHB to support implied delegation of statutory functions; the court rejected the late-emerging delegation line (lack of notice; and immateriality on the evidence).

(E) Onus and “reasonable diligence” proviso debate

  • Highlands and Islands Enterprise v Galliford Try Infrastructure [2023] CSOH 21; 2023 SLT 1077: cited by GGHB on onus; the Inner House resolved the appeal by holding the commercial judge treated onus as immaterial after evidence.
  • SSE Generation Ltd v Hochtief Solutions AG [2016] CSOH 177 and Salt International v Scottish Ministers [2015] CSIH 85, 2016 SLT 82: used to support the proposition that, after proof, onus is seldom decisive.
  • Batchelor v Opel Automobile GmbH [2025] CSOH 93 and Graham v E A Bell & Co, 24 March 2000: referenced in the Inner House’s discussion of the (arguable) allocation of onus on the reasonable diligence proviso, while ultimately affirming that the commercial judge did not decide the case on onus.

(F) Pleading adjustment and “new obligation”

  • WM Morrison Supermarkets plc v LEM Estates Ltd (In Liquidation) [2020] CSOH 31, 2020 PNLR 16: applied to test whether an adjustment seeks to enforce a distinct obligation (potentially with a different prescriptive analysis). The Inner House took a pragmatic view: the adjustment was within the thrust of the existing case and, in any event, immaterial to the dispositive prescription holdings.

3.2 Legal Reasoning

(A) The court’s approach: prescription disputes after proof are fact-driven, and appeals are constrained

The court framed the appeal as an attempt to re-interpret facts rather than to identify a legal misdirection or a factual finding with no evidential basis. Because GGHB did not propose replacement findings-in-fact, the Inner House treated the commercial judge’s findings as the foundation for the legal analysis. Applying Henderson v Foxworth Investments, the court held there was no basis to interfere: the commercial judge’s conclusions were reasonably explained and justified.

(B) Section 6(4): induced error requires evidence of an erroneous state of mind and its causal influence

Reaffirming Tilbury Douglas Construction v Ove Arup, the court held that section 6(4) demands proof of: (i) an error; (ii) induced by the debtor’s words or conduct (including, in principle, silence); (iii) which caused or contributed to refraining from making a relevant claim; and (iv) the dates defining the “excluded” period (subject to the reasonable diligence cut-off).

GGHB’s case failed at the threshold factual stage: on the commercial judge’s findings, no witness gave evidence that they were induced into error by the acts and omissions relied upon. The Inner House treated that evidential absence as fatal. It was not enough that GGHB did not know key facts (ACM/PE/Euroclass B); section 6(4) is not engaged by ignorance alone.

(C) “Silence” and non-disclosure: the decisive point was GGHB’s unawareness of Multiplex’s investigations

Although the court accepted the general proposition from Heather Capital Ltd (In Liquidation) v Levy & McRae that silence can constitute “conduct,” it held that Multiplex’s silence about its own internal 2018 investigations could not have induced GGHB into any error because GGHB did not know those investigations were occurring. The statutory word “induced” requires the omission to influence the creditor’s mind; an unknown omission cannot do so.

This is the judgment’s most practically important clarification for section 6(4) cases: non-disclosure only matters if it can be linked evidentially to the creditor’s erroneous belief and consequent inaction.

(D) Routine contractual steps (payment applications/certification) were not treated as self-proving inducements

The court upheld the commercial judge’s rejection of the idea that ordinary project administration—applications for payment, completion certification, and similar steps— are, without more, “conduct” inducing section 6(4) error. On the findings, there was no evidence of reliance by GGHB on these steps as assurances about Euroclass B compliance of the atrium cladding, and the payment process involved assessment by GGHB’s agent.

(E) “Aggregation” of alleged inducing acts could not cure the evidential deficit

The Inner House rejected the argument that the commercial judge should have viewed Multiplex’s conduct “in the round” to find inducement. Where each element was found not to have induced error (and there was no evidence of induced error in any event), aggregation could not create the missing proof.

(F) Reasonable diligence proviso: CEL 11 compliance and constructive knowledge

Proceeding hypothetically (even if induced error had been established), the court upheld the finding that GGHB could with reasonable diligence have discovered the true position by around May 2016. The key was GGHB’s duties under Chief Executive Letter 11 (CEL 11), which the experts agreed reflected what any prudent owner should do: review the O&M Manual at handover and verify its accuracy, maintaining a permanent record of installed components.

On the findings, when the O&M Manual was finally checked, its inadequacy was immediately apparent and a factual investigation followed. The court treated the commercial judge’s “six months” as an evidence-based and generous estimate, reinforced by how quickly matters were established in 2021 once GGHB was alerted.

(G) Section 11(3): “awareness” is of objective loss (including expenditure), not of defect details

The Inner House held section 11(3) could not delay commencement beyond practical completion. Applying Gordon's Trustees v Campbell Riddell Breeze Paterson LLP, the relevant “loss” was incurred when GGHB took possession of (on its averments) a disconform hospital and paid for works—regardless of when GGHB later discovered the physical characteristics of the cladding or the regulatory/compliance implications.

The court also rejected the “latent damage” label: this was not deterioration over time; it was an immediate disconformity at completion.

(H) Downstream claims against WSP and Nightingale

The commercial judge had held that GGHB’s postponement/interruption case depended entirely on Multiplex’s conduct; accordingly, even if GGHB could defeat prescription against Multiplex, it would still fail against WSP and Nightingale. The Inner House’s refusal of the reclaiming motion left that result undisturbed.

3.3 Impact

  • Section 6(4) claims must be evidenced, not inferred: creditors will require witness evidence identifying (i) the actual erroneous belief held, (ii) how specific words/conduct/omissions influenced that belief, and (iii) how that belief caused (or contributed to) refraining from claiming. Institutional litigants cannot rely on “it would have been assumed” without evidence connecting assumptions to the pleaded inducing conduct.
  • Non-disclosure is not automatically “inducement”: the judgment narrows attempts to treat a debtor’s failure to volunteer adverse information as an all-purpose suspension of prescription, especially where the creditor was unaware of the debtor’s internal concerns.
  • Post-Grenfell cladding disputes: the decision signals that later regulatory focus or later safety reassessments do not, by themselves, move the section 11 clock; the legal “loss” is anchored to completion/expenditure. Owners should assume that “latent” non-compliances will still be treated as losses at completion for prescription purposes.
  • Operational compliance duties matter to “reasonable diligence”: internal governance instruments like CEL 11 (and equivalent regimes) may become central benchmarks for what a prudent owner “could with reasonable diligence” have discovered.
  • Appeals after proof: the judgment underscores that reclaiming motions are not re-hearings; parties must identify a concrete error (legal or factual in the Henderson sense) rather than invite re-reading of the transcript.

4. Complex Concepts Simplified

Reclaiming motion
An appeal in the Court of Session’s Inner House against a first-instance decision.
Prescription (five-year)
Under section 6 of the 1973 Act, obligations to pay damages are extinguished if, for five continuous years after enforceability, no relevant claim is made and no relevant acknowledgement occurs.
Section 11(1): concurrence of injuria and damnum
The prescriptive clock starts when both a wrongful act/omission (injuria) and actual loss/damage (damnum) have occurred. In many construction cases this is tied to completion/possession and payment.
Section 11(3): lack of awareness
The clock may be postponed only if the creditor was not (and could not reasonably have been) aware that loss/damage had occurred. The “awareness” is of the fact of loss (often expenditure), not awareness that there is a legal claim or that a defect exists in detail.
Section 6(4): induced error
Even if the clock has started, time can be left out if the creditor refrained from claiming because of an error induced by the debtor’s words or conduct (including silence). But the creditor must prove the actual induced error and its causal effect.
Reasonable diligence proviso
Any excluded “error” period stops once the creditor could, with reasonable diligence, have discovered the error.
Assoilzie
A decree absolving the defender—i.e., the claim is refused.

5. Conclusion

This decision consolidates a stringent, evidence-led approach to section 6(4) induced error in prescription disputes: it is not enough to show that a defect was unknown, that the debtor acted routinely in administering the contract, or that the debtor later had internal concerns it did not disclose. The creditor must prove an actual erroneous belief induced by identifiable words/conduct/omissions and that this induced error caused (or contributed to) refraining from claiming.

On section 11(3), the court reinforces the Supreme Court’s objective “loss/expenditure” analysis: in construction defect cases, the prescriptive clock will generally start at completion/possession and payment, not at later discovery of technical non-compliance. The judgment also highlights that compliance regimes like CEL 11 can be decisive in assessing reasonable diligence.