Response to Law Commission Report/Proposals on Limitation Law

What has caught my attention are the reasons the Law Commission give for not reducing the Limitation Law. See below:

Extract 4.162 Reducing the limitation period applicable to claims to enforce a mortgage or charge over land from twelve to three years might lead the lender to resort more rapidly to enforcing the security, making the borrower homeless as a consequence. It would, of course, be possible to treat claims to enforce a mortgage or charge over a dwelling house differently from claims to enforce a mortgage or charge over other forms of land.178 However, we consider that this would create unnecessary complexity.

4.163 A number of consultees argued that allowing mortgagees or chargees a longer limitation period than the three year primary limitation period for claims to enforce a mortgage or charge over land would have equally adverse practical consequences. It was suggested that mortgagees will delay commencing proceedings until the amount outstanding on the mortgage is so large that the borrower has no opportunity to pay it within a realistic time-frame, so that the mortgagee has no alternative but to take possession. This argument was rejected by other consultees, most notably the Land Registry, which argued that reducing the limitation period could increase the number of occasions on which a lender will enforce its security.

It is also interesting to note the reaction of the insurance companies, see 5.35 & 5.36. Also, as I understand it, the LC doesn't want to make the new limitation period retrospective,see 5.40 (3). Although, I shall be including a proposal to make it retrospective in tne e-petition.

I think it would still be better to reduce the limitation period to 3 years even though in some cases the lender might resort to enforcing the security more rapidly. What does everyone else think?

In 4.162 they say that it would create unnecessary complexity to treat claims to enforce a mortgage or charge over a dwelling house differently from claims to enforce a mortgage or charge over other forms of land, What justification is that? What we want is a fair system.

Or,have I got it all wrong?

Mark.

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