The Supreme Court’s new approach to mistake of law claims

In Test Claimants in the Franked Investment Income Group Litigation v HMRC, the Supreme Court redefined the approach to limitation periods for recovering money under a mistake of law. Claimants now have six years from the date that they discovered, or ought to have discovered, that they have a ‘worthwhile claim’ to restitution, rather than six years from when the mistake of law is revealed by a judicial decision from which there is no right of appeal. While the legal principle is clear, in practice, it is likely to reduce the limitation period and generate considerable uncertainty for claimants.