Commercial Litigation and Dispute Resolution Blog

The sky is falling!  Well, not really but some might think so given that the provincial government has introduced a bill, currently in first reading, that will bring some significant changes to the law governing limitation periods.  Limitation periods establish the time within which a lawsuit must be commenced, failing which it will be barred whatever its merits.  In the language of the legislation, “the cause of action is extinguished”.  The current legislation has been in force for 37 years.  It has been the subject of calls for change and reform for a long time.

The most significant of the proposed changes is the creation of a “basic limitation period” of two- years.  Currently, there is no “basic limitation period”.  The limitation period is generally defined by the nature of the claim.  For example, claims for personal injury, trespass to land and defamation have a two year limitation period.   Most other claims are governed by a six-year limitation period.  Those types of claims include breach of contract, claims in conversion and for the possession of land.  Some claims currently have a 10 year limitation period: claims against a trustee for fraud, claims against an executor and claims for the recovery of trust property.  The change to a two-year limitation period for most claims will bring B.C. into line with other Canadian jurisdictions such as Alberta, Saskatchewan and Ontario.

Another proposed change is to shorten the ultimate limitation period from its current 30 years to 15 years.  The ultimate limitation period applies (with some exceptions) even in cases where there has been a confirmation of the cause of action or it has otherwise been postponed or suspended for some reason. 

A third proposal is to change the calculation of the date on which the ultimate limitation period starts to run.  Presently, that is the date on which the cause of action “accrues”, meaning all the elements of the claim are present and known to the claimant.  In practice, this may mean that different dates are used depending on the nature of the claim.  For example, a claim in negligence comes into existence when, among other things, a plaintiff suffers actual damage caused by the breach of duty.  That date can be a long distant from the original act that was the breach of duty.  Under the new legislation, the limitation period will run from the date of the act (or omission) that is the breach of duty.  In other words, from the date the engineer negligently installed a building’s foundations rather than the date many years later when the building fell over as a result.

The changes have been recommended by, among others, the B.C. Law Institute.  Some, such as those in the insurance industry, applaud these proposed changes.  The changes will likely mean fewer lawsuits because the time within which to commence them will be shortened.  Theoretically, the changes will also reduce insurance and record keeping costs for business. 

The law of limitation periods can be a complicated and often difficult in its application.  Whether these proposed changes bring greater clarity is an open question.