LIMITATION PERIODS AND LACHES
For reasons of public policy most civil actions are subject to a time bar, the effect of which is that, once a particular period of time has passed, the defendant can no longer be sued on that particular action. One of the main reasons for having time bars is to ensure that the threat of an action does not continually hang over the defendant, so that, once the limitation period has passed, he or she can be certain that the benefit has been validly received and will not need to be returned to the claimant. The existence of time bars also act as an incentive for claimants to bring claims as soon as possible. This is particularly advantageous since, as time passes, evidence may become less reliable and more difficult to obtain.
There are two distinct legal regimes relating to the barring of restitutionary claims by the passage of time. The first, and most significant, is contained in the Limitation Act 1980, which specifies particular limitation periods for different types of claim. Unfortunately the Act does not, with certain minor exceptions, contain any specific provision relating to restitutionary claims, so the question of what is the appropriate period of limitation is a matter which is not free from difficulty. The second regime is the equitable defence of laches, which determines whether an equitable action is time barred by reference to the justice of the case, having regard to all the surrounding circumstances. The Limitation Act applies to all Common Law claims and closely related equitable claims, whereas the defence of laches only applies where the claimant seeks equitable relief. Where the Limitation Act applies there is no scope for the application of the laches defence.
-  Re Baker (1881) 20 Ch D 230. 2 Nelson v Rye  1 WLR 1378, 1389 (Laddie J).