Introduction

TECJET Limited, the pursuer, initiated legal proceedings against KIER Construction Limited, the defender, following a devastating fire at the Mackintosh Building of the Glasgow Art School on June 15, 2018. TECJET operated a nightclub and music venue adjacent to the Art School, and the fire caused significant damage to their premises, located at 300 Sauchiehall Street, Glasgow. The core legal issue revolved around whether KIER Construction, as the principal contractor responsible for remedial work at the Art School, was negligent, leading to the outbreak and spread of the fire.

Central to TECJET's case were two main facets:

• Establishing KIER Construction's negligence under the doctrine of res ipsa loquitur.
• Validly asserting claims not only on their own behalf but also as assignees for Academy Music Group Limited and Live Nation (Music) UK Limited, other entities affected by the fire.

KIER Construction contested both the sufficiency of TECJET's title to sue and the validity of the assignations that purported to transfer claims to TECJET, ultimately raising issues related to prescription under the Prescription and Limitation (Scotland) Act 1973.

Summary of the Judgment

Presided over by Lord Richardson in the Outer House of the Scottish Court of Session, the judgment meticulously dissected the arguments presented by both parties. The court addressed TECJET's dual claims: their own losses and those of the assignor companies.

On evaluating TECJET's assertion of KIER Construction's negligence, the court found merit, affirming that TECJET had established a valid duty of care based on their tenancy and the proximity of their premises to the Art School. However, when scrutinizing the assignations transferring claims from Academy Music Group Limited and Live Nation (Music) UK Limited to TECJET, the court identified significant procedural deficiencies.

Specifically, the court concluded that the first assignation failed to effectively convey property rights due to errors in the document's execution and non-compliance with statutory requirements for intimation under the Transmission of Moveable Property (Scotland) Act 1862. Consequently, following the precedent set in Bentley v Macfarlane [1964] SC 76, the assignors' claims were deemed prescribed, leading to their dismissal. Thus, only TECJET's own claims proceeded, while the assignees' claims were dismissed on grounds of prescription.

Analysis

Precedents Cited

The judgment extensively referenced several key precedents that shaped the court's reasoning:

• Bentley v Macfarlane [1964] SC 76 - Established that a claim lacks merit if the pursuer had no title to sue at the time the action was commenced, and such a defect cannot be rectified post-initiation.
• Slattadale Limited v Tilbury Homes (Scotland) Limited [1997] SLT 153 - Differentiated between situations where a pursuer's title is incomplete but rectifiable during proceedings, and situations where no title exists from the outset.
• Royal Insurance (UK) Limited v Amec Construction (Scotland) Ltd (No 2) [2008] SLT 825 - Addressed the nature of "relevant claims" and their role in interrupting prescription under the Prescription and Limitation Act.
• Donoghue v Stevenson [1932] SC (HL) 31 - Laid down the foundational "neighbor principle" establishing duty of care in negligence.
• Goldman v Hargrave [1967] 1 AC 645 - Reinforced the occupier's duty to mitigate hazards that could harm neighbors.

These precedents collectively underscored the necessity for clear title and meticulous procedural adherence when asserting claims, especially in complex contexts involving assignations and prescription periods.

Legal Reasoning

The court's legal reasoning was bifurcated, addressing TECJET's own claims and the separate assignors' claims. Key elements included:

• Title to Sue: The court examined whether TECJET accurately established its right to sue based on tenancy and operational control of the adjacent premises. It determined that TECJET met this criterion, thereby validating their primary negligence claim against KIER Construction.
• Validity of Assignations: Scrutiny of the assignations revealed that the first document failed to transfer property rights adequately due to errors such as misnaming the assignor company and improper execution. The second assignation, arriving post-summons, was too late to rectify these deficiencies.
• Prescription: Leveraging the Prescription and Limitation (Scotland) Act 1973, the court held that since the defender had no substantive claim, the assignors' claims fell outside the window for interruption, leading to their prescription.
• Relevancy of Claims: The court emphasized that for a claim to interrupt prescription, it must be a "relevant claim," meaning it relates directly to the underlying obligation and is made by the creditor or their legitimate assignee.

The culmination of these points led to a clear delineation: while TECJET could pursue their own claims due to a valid duty of care and proper title, the assignors' claims were unavailing due to procedural lapses and the consequent expiration of the prescriptive period.

Impact

This judgment reinforces the stringent standards required for assignment and the interruption of prescription in Scottish law. Key implications include:

• Assignment Documentation: Entities must ensure that assignations are meticulously drafted, executed, and intimated in compliance with statutory requirements to validate the transfer of claims.
• Prescription Awareness: Claimants must be acutely aware of limitation periods and the conditions under which claims can interrupt such periods, especially when acting on behalf of assignors.
• Judicial Scrutiny: Courts will continue to apply rigorous scrutiny to the validity of assignations and the timing of claims to prevent procedural oversights from undermining substantive rights.

Practitioners advising clients in similar contexts will need to prioritize the procedural integrity of assignment documents and ensure timely action to safeguard against prescription barring legitimate claims.

Complex Concepts Simplified

Prescription and Its Interruption

Under the Prescription and Limitation (Scotland) Act 1973, prescription refers to the period within which legal action must be initiated. If a claim is not brought within this period, it becomes prescribed, meaning it is no longer legally enforceable. However, certain actions, termed "relevant claims," can interrupt this prescriptive period, effectively resetting the limitation clock.

Res Ipsa Loquitur

This Latin term translates to "the thing speaks for itself." In negligence cases, it allows plaintiffs to infer negligence from the mere occurrence of certain types of events, without direct evidence of the defendant's fault, provided the event is of a nature that ordinarily does not happen without negligence.

Assignment of Claims

Assignment involves transferring rights or claims from one party (the assignor) to another (the assignee). For an assignment to be valid, it must meet specific legal criteria, including proper documentation and adherence to statutory requirements for notification (intimation) to the other party (defender).

Duty of Care

In negligence law, a duty of care is an obligation to avoid acts or omissions that could foreseeably harm others. Established in Donoghue v Stevenson, it forms the cornerstone for claims where harm results from another party's failure to uphold reasonable care standards.

Conclusion

The TECJET Ltd v Kier Construction Ltd judgment serves as a pivotal reinforcement of the meticulous standards governing claim assignments and the interruption of prescription in Scottish law. By upholding the necessity for precise documentation and timely action, the court underscores the legal system's emphasis on procedural rigor. While TECJET's own negligence claims against KIER Construction were validated, the inability to substantively transfer the assignors' claims due to procedural lapses resulted in their dismissal. This bifurcated outcome highlights the dual importance of establishing a valid duty of care and ensuring flawless procedural adherence in complex litigation scenarios.

For legal practitioners and entities involved in assignment and litigation within the Scottish jurisdiction, this judgment serves as a critical reminder of the indispensable role of procedural integrity in safeguarding substantive rights. Future cases will likely reference this decision when addressing similar issues of assignment validity and prescription interruption, shaping the contours of construction negligence and beyond.