A state of mind: Greater Glasgow Health Board v Multiplex Construction Europe Limited

In Greater Glasgow Health Board v Multiplex Construction Europe Limited [2026] CSIH 16, the Inner House of the Court of Session (Scottish Court of Appeal) has provided further guidance on the application of prescription (limitation) legislation to construction disputes. This is the latest in a string of Inner House decisions which have re-shaped the approach to prescription litigation in Scotland. In this article we explore where this most recent opinion leaves matters.

Background

On 18 December 2009, Greater Glasgow Health Board (GGHB) and Multiplex Construction Europe Limited (Multiplex) entered into a contract for the design and construction of the new Queen Elizabeth University Hospital (QEUH) in Glasgow. Practical completion of QEUH was achieved on 26 January 2015. GGHB sued Multiplex for breach of contract on 4 March 2022.  

This action concerns alleged fire safety defects with the cladding in the atrium at QEUH. GGHB argued that the installation of ACM cladding panels with polyethylene cores was in breach of a contractual requirement that QEUH’s cladding required to achieve, as a minimum, the Euroclass B-s3, d2 fire resistance standard. GGHB sought payment of £16,325,000 from Multiplex in damages for breach of contract.

Multiplex defended the action on the basis that it was not a contractual requirement for the cladding to be Euroclass B compliant and, in any event, that GGHB’s claim had prescribed (time-barred) in terms of the Prescription and Limitation (Scotland) Act 1973 (the 1973 Act). Lord Braid (the first instance judge) fixed a preliminary proof (trial) to resolve Multiplex’s prescription defence as a preliminary issue.

Under section 6 of the 1973 Act, the general rule is that a court action must be served within five years from the date of loss. GGHB accepted that it had issued the action more than five years after it sustained loss, which for this claim was paying for a defective building at practical completion, but relied on two exceptions to the general rule within the 1973 Act:

1. in reliance on s6(4)(a)(ii), GGHB argued that the prescription period was interrupted due to it having been induced to refrain from making a claim sooner by virtue of Multiplex’s conduct inducing an erroneous belief that the cladding was compliant; and
2. in terms of s11(3), GGHB submitted that the start date of prescription had been delayed because it was unaware, and could not with reasonable diligence have become aware, that it had sustained a loss, until Multiplex highlighted potential issues with the cladding in February 2021.

Lord Braid rejected both of GGHB’s arguments and found that the claim was prescribed. GGHB appealed against Lord Braid’s decision.

Inner House decision

The Inner House dismissed GGHB’s appeal and upheld Lord Braid’s decision that the action had prescribed.

Section 6(4)(a)(ii) – induced error

To interrupt prescription using s6(4), GGHB needed to prove four things: (1) that it was in error as to its rights and remedies against Multiplex; (2) that Multiplex induced the error; (3) that the error was the reason for, or at least contributed to, GGHB’s decision not to issue a claim sooner; and (4) the start and end date of the error period.

The Inner House explained that “GGHB had to go further than simply showing it was unaware of the issue”. The Inner House supported Lord Braid’s conclusion that, on the basis of the evidence led at the preliminary proof, GGHB had not proved it was induced into error by the conduct of Multiplex. In particular, the court highlighted that GGHB’s argument was fatally undermined by failing to produce any evidence as to what its state of mind actually was. Although the witnesses led by GGHB each pointed to being unaware of the cladding issues, none gave evidence that they were induced into an erroneous belief by Multiplex.

Even if GGHB had established an induced error, the court stressed that this would not have been enough to help in this case. The prescription period resumes from the moment when an error is, or could with reasonable diligence have been, discovered by the claimant. Here, the Inner House explained that, had GGHB followed its own internal review requirements to check the O&M manual and verify the products installed, then GGHB would have discovered the cladding issues almost immediately after practical completion.

Section 11(3) – delaying the start of prescription

Section 11(3) allows the start of the prescription period to be delayed until the date when a claimant is aware, or could with reasonable diligence have become aware, that it has sustained a loss. GGHB argued that the nature of the cladding defects was such that it could not have become aware of its loss until Multiplex highlighted potential issues in 2021.

The Inner House supported Lord Braid’s rejection of this argument. GGHB’s loss was paying for a building which turned out to be defective at practical completion. GGHB had knowledge of incurring expenditure at practical completion. Awareness of the actual underlying issue is not required. GGHB’s argument that it did not know about the existence of the cladding defects was, therefore, beside the point when assessing whether GGHB had knowledge of loss for the purpose of s11(3).

Comment

Although the outcome of this case is restricted to its facts, the decision provides further helpful guidance on the application of the 1973 Act. In particular, this case gives further clarity on the circumstances when prescription can be interrupted by s6(4).

The claimant’s state of mind is central to any argument based on induced error. This decision emphasises the key requirement developed in earlier cases that there must be actual evidence to show that the claimant was led to believe something different to the truth. Ignorance is not enough. The conduct relied on to support an induced error argument must have had some influence on the claimant’s state of mind. While GGHB’s witnesses could point to their belief that the cladding complied, this was an altogether different thing from being induced into this view by Multiplex. GGHB’s witnesses accepted that they had simply never applied their mind to the question. Inducement could never, therefore, be established.

Looking at what this means for those involved in claims, the difficulty faced by GGHB further illustrates the significant evidential hurdles facing claimants seeking to overcome a prescription defence by establishing an induced error. Evidence speaking to what people actually thought at the time is essential. Such evidence might well be hard to find given the passage of time. Applying hindsight or artificial arguments about what individuals would have thought is not enough. Those defending claims where a claimant seeks to establish an induced error should give careful consideration to calling on the claimant to produce the documents and witnesses to be relied on at an early stage. This opinion demonstrates that identifying an absence of evidence quickly, might be a useful tool to encourage earlier and cheaper resolutions.

Finally, it is worth pausing to reflect on where this decision leaves prescription litigation in Scotland. Those familiar with litigating north of the border will be aware that this topic has become one of the hottest issues in recent years. In this opinion the Inner House once again explained that “a mere assertion by the debtor that it had performed its obligations or had not been negligent” is not enough to establish an induced error. A claimant seeking to rely on s6(4) must go further. The claimant must demonstrate conduct on the part of the defendant which is capable of changing the claimant’s mind. A simple reassertion of a belief which already existed will not succeed. As the Inner House explains, “the word ‘induced’ in s6(4) requires the relevant conduct to have had some influence on the creditor’s state of mind”.  Where the line is drawn, between conduct which can and cannot induce an error, is likely to remain a topic ripe for debate and further development.