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Prescription Periods Affected by 2008 Reform
Contributed by Lovells LLP
March 05 2009
Introduction
Principal Applicable Provisions
Summary
Law 561/2008 reforms prescription with respect to civil matters. It came into effect on June 19 2008. The new law not only alters the existing legal text but also acts as a true reform, redrafting all the provisions of the Civil Code on prescription and creating a specific new heading.
However, the new law does not completely harmonize the prescription periods applicable to civil and commercial matters as certain specific statutes of limitation remain. This is particularly true in the field of product liability.
Principal Applicable Provisions
The reform is designed to:
- reduce the duration and quantity of negative prescription periods;
- simplify and clarify the methods for the calculation of negative prescriptions; and
- regulate extension of the possibilities for contractually adapting prescription periods.
Reduction of the duration and quantity of negative prescription periods
The new law strives to reduce the number of statutes of limitation without systematically diminishing their duration. In 2004 the Court of Cassation listed no fewer than 250 different statutes of limitation running from one month to 30 years.
The principal reform is a decrease from 30 years to five years for the ordinary legal negative prescription period, including in commercial matters. Liability claims are now in principle subject to the same limitation period of five years, whether the grounds are contractual (which previously had a prescription period of 30 years, or 10 years in commercial matters) or non-contractual (in which case the prescription period was 10 years).
However, different prescription periods still apply in certain specific cases, notably in product liability matters. For example, the new text provides for a prescription period of 10 years for claims arising out of an event that caused bodily harm.
Other specific provisions remain applicable, such as Article 1648 of the code, which provides for a two-year prescription period for claims against sellers resulting from hidden defects. Article 1386-17, which implemented the EU Product Liability Directive, also remains applicable and provides for a prescription period of three years for actions against producers in the event of damage caused by a defective product.
Simplification and clarification of the methods for calculating negative prescriptions
The ordinary legal prescription period runs from the date on which the holder of a right learnt or should have become aware of the facts on which its claim is based, except in specific circumstances (eg, force majeure). That was the rule for claims based on a hidden defect in a product. The reform has extended this rule to all claims based on generic law.
However, a few specific rules are maintained with respect to the calculation of prescriptions. For claims resulting from an event that caused bodily harm, the prescription period of 10 years runs from the date on which the damage suffered is stable.
Postponement
Prescription periods are interrupted by:
- the filing of a claim;
- the debtor's acknowledgement of the right of the party against which the prescription period runs; or
- any compulsory enforcement action.
When a prescription period is interrupted, the time previously elapsed is disregarded and the same prescription period starts again. This is new insofar as in certain circumstances under the previous provisions, the second period could differ from the first. When a first prescription period of two years was interrupted by the filing of a summons requesting the appointment of an expert in a matter relating to a hidden product defect, the new prescription period that started from the filing of the expert's report was the ordinary period (ie, 10 years in commercial matters). Under the new law, the second prescription is of the same duration as the first (ie, two years).
Moreover, postponement of the starting point and the suspension or interruption of the prescription period can no longer have the effect of carrying the negative prescription period beyond 20 years as from the day of the creation of the right. This limit applies to all prescription periods unless provided otherwise. With regards to product liability matters, such derogation applies to claims against producers of a defective product where a claim is extinguished 10 years after the product which caused the damage was put into circulation.
Application to current prescription periods and pending claims
The new provisions to extend the duration of a prescription period apply to prescription periods already running as of June 19 2008 (ie, prescription periods that had not expired on that date). The time that has already elapsed is taken into account.
The new provisions to reduce the duration of the prescription period apply to prescriptions as of June 19 2008. However, the total duration of a prescription period cannot exceed the duration set by the previous provisions.
Claims brought before June 19 2008 will be dealt with and judged according to the previous law, which will apply in the same manner before both the courts of appeal and the Court of Cassation.
The reform of June 17 2008 simplified and harmonized the different prescription rules by significantly reducing the number of different statutes of limitation. However, in the field of product liability several prescription periods still apply, including some with different starting points. The duration of the prescription period and the date from which it runs still depend on factors such as the grounds on which the action is brought and the nature of the damage sustained.
For further information on this topic please contact Christophe Garin at Lovells by telephone (+33 1 53 67 47 47) or by fax (+33 1 53 67 47 48) or by email (christophe.garin@...). The Lovells website can be accessed at www.lovells.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
