New rules on limitation of claims of a proprietary nature have applied since 9 July 2018. The main change is shorter limitation periods. Consumers and businesses are also treated differently.
New general limitation period
The legislature has shortened the general limitation period from ten to six years, with claims becoming time-barred at the end of the calendar year.
Exception: the end date remains unchanged for claims with limitation periods shorter than two years.
Example: a statutory warranty claim to replace or repair a sold item whose defects were identified on 11 July 2018 becomes time-barred on 11 July 2019: a one-year period.
Periodic payments and claims connected with business activity
The three-year limitation periods for periodic payments and business-related claims remain unchanged. However, their expiry is now calculated at the end of the year.
Example: a claim falling due on 11 July 2018 becomes time-barred on 31 December 2021: three years to 11 July 2021, plus the remainder of that calendar year.
What about claims falling due before 9 July 2018?
Application of the new Act
The amending Act sets rules for older claims. Limitation of claims arising before the amendment is governed by the amended legislation. However, each limitation period must be assessed under the rules below.
Claims previously subject to a ten-year period
As a rule, the limitation period for these claims against consumers starts afresh. However, if a claim would expire earlier under the former rules, those rules apply.
Scenario I Limitation under the new rules
Claim arose: 1 January 2015
Former deadline: 1 January 2025
New deadline: 31 December 2024
Claim arose: 31 December 2014
Former deadline: 31 December 2024
New deadline: 31 December 2024
Scenario II Limitation under the former rules
Claim arose: 30 December 2014
Former deadline: 30 December 2024
New deadline: 31 December 2024
Claims held by consumers
The limitation period for consumers’ claims arising before 9 July 2018 will be calculated under the former rules. This also applies to periodic payments.
Other claims
The limitation periods for other claims have not been shortened. The new Act applies and effectively extends them by moving expiry to the end of the year, as illustrated above.
Must limitation be pleaded? Not in disputes with consumers
Previously
Before 9 July 2018, time-barred claims could be pursued, and a limitation defence had to be raised to prevent judgment being given on them.
Now
The Civil Code now distinguishes between consumers and professional parties. As a rule, businesses cannot pursue time-barred claims, and courts will examine limitation of their own motion. A related change requires statements of claim to specify when the claim fell due. These rules concern only disputes between consumers and businesses.
An exception based on fairness
The legislature allows judges, after considering the parties’ interests, to uphold time-barred claims against consumers where fairness requires it. The court will focus on the length of the limitation period, the time since it expired and the circumstances explaining why the claim was not pursued. Particular attention will be paid to debtor conduct intended to prevent the claim being brought.
Claims already time-barred
From the Act’s entry into force, businesses cannot pursue claims against consumers that were already time-barred but for which the consumer had not raised a limitation defence. The fairness exception above applies as appropriate.
Claims established by judgment
The observations on the general six-year period also apply to claims established by a final judgment of a court or another competent authority, an arbitral award, a settlement before a court or arbitral tribunal, or a mediated settlement approved by a court.
Archive — published on 26 April 2019.
