News
21 October, 2026
Court of Session rules on prescription and collateral warranties in Aberdeen hotel cladding claim
Court of Session rules on prescription and collateral warranties in Aberdeen hotel cladding claim
Lord Richardson has issued his opinion following a second debate in the case of Leonardo Hotel Management (UK) Limited v Galliford Try Building 2014 Limited and others [2026] CSOH 103; another decision on prescription in the context of alleged cladding defects.
Sean White appeared for the pursuer, led by Tim Young and instructed by Morton Fraser MacRoberts LLP.
The opinion covers a good deal of ground for construction practitioners:
Collateral warranties – The Court was tasked with considering whether each of the first and second defender’s collateral warranties provided them with ‘equivalent rights of defence’ to those with which they would be afforded under the original construction contract and architect’s appointment, respectively. The wording of the relevant clauses each contained a variation of wording considered by the Inner House in British Overseas Bank Nominees Limited v Stewart Milne Group Limited, in which equivalent rights of defence were found to exist and Legal & General Assurance v Halliday Fraser Munro, in which no equivalent rights of defence were found to exist. Having considered these authorities, Lord Richardson determined that the wording of each of the collateral warranties in the present case could be interpreted as conveying equivalent rights of defence, which extended to computation of the relevant prescriptive periods. (Paras [96] to [109]).
The Opinion offers guidance to practitioners on the Court’s approach to contractual interpretation in this context, in circumstances where the wording of the collateral warranty sits somewhere between that previously considered by the Inner House of the Court of Session.
Section 11(3) Lord Richardson revisited the conclusion reached in his previous Opinion ([2024] CSOH 43), agreeing that the Inner House decision in Tilbury Douglas v Ove Arup and Partners had developed the principles set down by the Supreme Court in Gordon’s Trustees v Campbell Riddell Breeze Paterson LLP. The Inner House in that case had applied those principles to a provider rather than a recipient of services, concluding that the creditor had sufficient awareness of loss having been sustained solely because it was aware of the fact that the fixed-price contract had been concluded, in terms of which it would subsequently be obliged to incur expenditure in relation to re-design and consequent delays. Lord Richardson found the circumstances of the present case to be analogous to those in Tilbury Douglas, whereby entering into the lease, rather than a fixed term contract, was the time at which the pursuer’s losses were “locked in” as a result of the repairing obligations which it had undertaken. (Paras [116] to [127]).
The Opinion bears to reaffirm that the harsh outcome for pursuers in cases such as David T Morrison v ICL Plastics Limited will apply in the context of tenant’s repairing obligations.
Section 6(4) A significant focus of the debate was on whether the pursuer’s pleadings disclosed relevant averments to invoke section 6(4) of the 1973 Act. In this regard, the Court required to consider the recent comments of Lord Malcolm in Tilbury Douglas on whether conduct as ‘everyday’ as providing services and accepting payment under a contract could be relied upon for the purposes of section 6(4). Aligning himself with the views of Lord Sandison in Batchelor v Opel Automobile GmbH, Lord Richardson considered that the statutory language of section 6(4) did not provide for any such restriction on the type of conduct which might be relied upon and that the obiter comments of Lord Malcolm went no further than to query whether generic conduct which was apparently unrelated to any relevant error on the part of the creditor fell within the scope of section 6(4). Lord Richardson found, in any event, that the conduct relied upon in the present case could be distinguished from the sort of ‘everyday’ conduct contemplated by Lord Malcolm as the pursuer relied upon a course of conduct by the defenders which included a physical concealment of defects. The pursuer’s averments in this regard were therefore held to be relevant for proof. (Paras [128] to [153]).
The Opinion offers reassurance to practitioners that section 6(4) will not be applied in such a restrictive way as had been hinted at in previous authorities and may continue to be relied upon by pursuers faced with prescription arguments where there has been a genuine error as to the existence of defects, induced by the words or conduct of a debtor.
Section 11(2) The Court was also asked to determine the relevancy of the second defender’s averments in response to a prescription plea taken against it by the third party. The question for the Court was whether the alleged misrepresentation relied upon by the second defender was a ‘continuing act, neglect or default’ for the purposes of section 11(2) of the 1973 Act. The third party sought to argue, under reference to the Supreme Court’s decision in Cramaso LLP v Viscount Reidhaven’s Trustees, that a misrepresentation ceased to become a continuing act, neglect or default at the time it was acted upon by a representee. Lord Richardson rejected this argument, considering it to have been misconceived. His Lordship noted that the Court in Cramaso was not considering the nature of misrepresentation through the prism of section 11(2) and, in any event, rejected the idea that reliance on a representation might necessarily act as a bar on that representation being further reasonably relied upon by a representee.
The defenders’ and third party’s motions for absolvitor and dismissal were refused and a proof before answer allowed, albeit with certain averments excluded from probation.
The Opinion of Lord Richardson can be viewed here.