Greater Glasgow Health Board v Multiplex Construction (Europe) Limited – Inner House

Background

The Inner House recently published its judgment in the reclaiming motion (appeal) brought by Greater Glasgow Health Board (“GGHB”) against Multiplex Construction Europe Limited & others (“Multiplex”) following the 2025 decision by the Commercial Judge in the Outer House. The background and  details of the decision of the Outer House are set out in our previous article.

GGHB contracted with Multiplex for the design and construction of the Queen Elizabeth University Hospital in Glasgow in 2009. Practical completion was achieved in January 2015. GGHB later raised a claim for damages against Multiplex in March 2022, citing fire related cladding defects in the hospital’s atrium stemming from Aluminium Composite Materials (“ACMs”).

Multiplex contended that any obligation to make reparation to GGHB for defects had prescribed, since no claim had been raised within five years of the alleged loss.

GGHB sought to rely upon Section 6(4) of the Prescription and Limitation (Scotland) Act 1973 to argue that the running of prescription had been suspended, and thus the claim had not prescribed.

The effect of Section 6(4) is that during any period where a party fails to make a claim “by reason of error induced by words or conduct of the debtor…”, the five-year “prescriptive clock” will be suspended.

GGHB also argued that it was unaware of the loss, and that it could not with reasonable diligence have become aware of its loss until 2021.

The Commercial Judge determined that the GGHB had failed to prove that it had been induced into error by Multiplex in terms of Section 6(4). It was held that GGHB had failed to lead evidence from witnesses which suggested that any witness, or GGHB itself as a corporate entity, had in fact been induced into error by Multiplex. GGHB could, with reasonable diligence, have discovered the error by May 2016. GGHB had failed to comply with guidance set out in a fire safety policy document (“CEL 11”). If GHBB had complied with CEL 11, the cladding defects would have been discovered at an earlier date.

Appeal

The appeal by GGHB to the Inner House can be summarised as follows:

• Inducement of Error – GGHB argued that the Commercial Judge’s assessment that GGHB had been ignorant of the loss was incorrect. GHBB considered that it had instead been induced into a positive belief that the cladding was conform to contract. It argued that Multiplex’s silence, once aware of defects in 2018, constituted conduct inducing error.
• Reasonable Diligence – GGHB argued that even with reasonable diligence, it would not have discovered defects relating to the atrium at an earlier date.

Decision

The Inner House refused GGHB’s appeal. The Court emphasised that it could only interfere if the findings of the Outer House judge were “plainly wrong”. The Inner House found that the Commercial Judge’s reasoning was detailed and justified.

The Inner House reiterated that GGHB had failed to lead evidence from any member showing that anyone was induced into error by Multiplex. Nor did it evidence the board’s actual state of mind, as opposed to what the state of mind “would have been”.

The Court highlighted that GGHB did not propose any new findings-in-fact to substitute the findings-in-fact on induced error made by the Commercial Judge. Although GGHB’s witnesses testified to the fact they were not aware of issues with the atrium cladding, none confirmed that they were induced into that belief by the failure of Multiplex to inform them of concern about the cladding. It was not enough for GGHB to simply show that they were unaware of the issue.

The Court rejected GHBB’s assertion that a failure by Multiplex to disclose the presence of defects permitted GGHB to rely upon Section 6(4). It was observed that a party is not required to disclose “its own knowledge that it had acted in breach of contract”, and that any such approach would effectively turn Section 6(4) into a provision which proved itself.

With respect to reasonable diligence, the Court reiterated that it was open to the Commercial Judge “to find that, using reasonable diligence, GGHB could have discovered the error almost immediately after completion in November 2015”, and that a “thorough check of the manual… would have led to the discovery of the problem”.

Comment

The decision serves as a timely reminder of the rising evidentiary bar for those seeking to rely upon Section 6(4). Parties are unlikely to be successful in the absence of compelling evidence demonstrating clear inducement into error.

The Inner House sensibly highlighted that “as time passes, it becomes increasingly difficult for a court to arrive at a just decision”. Court actions raised outwith the five-year period will face substantial hurdles to challenge prescription.

This is a welcome decision for both PI Insurers and construction professionals when defending claims for breach of contract and professional negligence in Scotland. It is clear that where a party has a defence of prescription, Section 6(4) will remain a key battleground for some years to come.