Time to Sue: COVID-19 Accommodations Ending
As discussed in my previous article, COVID-19, Builders Liens and Limitation Periods, since March 26, 2020, limitation periods in BC were suspended. This suspension was listed as of April 15, 2020 for builders lien issues.
By way of simple introduction, a limitation period is generally two years and requires that a party commence a lawsuit within two years of knowing or having the information to know they have a cause of action, or basis for a lawsuit, or forever lose the right to commence litigation. When a limitation period begins to run, how a limitation period may be extended and various restrictions and extensions of the basic two-year limitation period are complex subjects that need to be considered in each potential action but are beyond the scope of this article.
In a new provincial order made on December 21, 2020, the provincial government announced that the suspension of limitation periods is ending as of March 25, 2021.The provincial government released an explanatory document explaining the technicalities of this important legal development.
The suspension of limitation periods was formerly tied to the state of emergency, with the intention being to lift the suspension when the state of emergency was lifted. With the recent announcement, the limitation periods suspension will be lifted on March 25, 2021 regardless of whether the state of emergency in BC lifts before or after that date.
The suspension of the limitation period for one year makes calculating the time remaining in a limitation period simple: just add one year.
By way of example:
- a limitation period that expired before the suspension remains expired. By example:
- payment under a contract was not made when due on February 26, 2018;
- the limitation period was on February 26, 2020;
- the limitation period expired on February 26, 2020 if no action was commenced;
- a limitation period that would have expired during the limitation period suspension has the same time remaining after the suspension as it did before, resulting in one year being added to the limitation period. By example:
- a person was in a motor vehicle accident with an identified at-fault driver on April 26, 2018;
- the victim’s limitation period would have expired on April 26, 2020 but for the suspension;
- the victim had one month left in their limitation period before the suspension period and will have one month left afterwards;
- the victim’s limitation period expires on April 26, 2021;
- a limitation period that would have expired after the limitation period suspension also has the same time remaining after the suspension as it did before, resulting in one year being added to the limitation period. By example:
- a new home owner discovered on June 26, 2019 that the vendors misrepresented that the house they sold had no water damage when they knew that it did have water damage;
- the new home owner’s limitation period would have expired on June 26, 2021 but for the suspension of the limitation period;
- the new home owner’s limitation period expires on June 26, 2022;
- a limitation period began to run during the suspension starts to run when the suspension is lifted. By example:
- a supplier fails to deliver product when required on September 26, 2020;
- the limitation period would have expired on September 26, 2022 but for the suspension;
- the limitation period starts to run when the suspension is lifted on March 25, 2021; and
- the limitation period expires on March 25, 2023.
This new announcement provides certainty for calculating the expiration of limitation periods. Previously, it was unknown how and when the suspension would be lifted. It is critical that counsel and clients who may have previously relied on the suspension of the limitation period to “sit” on claims to appreciate and calculate when action must be taken to preserve a limitation period. It is also crucial for parties to understand that, for the next couple of years, claims may be commenced later than expected because of the extended limitation periods.
More complicated limitation issues such as acknowledgment of claims that might renew the limitation period and how those interact with the newest announcement should be carefully considered with the wording of the announcement but are beyond the scope of this article.
It should be noted that the discretionary power provided to entities which have statutory power to waive, suspend or extend a limitation period will continue until 90-days after the state of emergency is lifted, although the limits of that discretion are beyond the scope of this article.
If you are concerned about how any limitation period concerns might affect your legal interests, we are happy to assist.