Preventing Claims - Limitations and deadlines

For litigators and solicitors

 

ALERT: New Limitation Act in force June 1, 2013

On June 1, 2013, the new Limitation Act, SBC 2012, c. 13 (formerly Bill 34) came into force. The new Act simplifies the time limits for filing civil lawsuits. It replaces the former two, six and 10-year limitation periods for civil claims with a two years- from-discovery basic limitation period and the former 30-year ultimate limitation period with a 15-years-from-occurrence limitation period (with some exceptions).

The new Act’s limitation periods will apply to claims arising from acts or omissions that occur and are discovered on or after June 1, 2013. Under the new Act, most claims are discovered when a claimant knew or ought to have known that the injury, loss or damage was caused by the defendant, and that a court proceeding would be an appropriate remedy (although discovery is postponed for some claims).

The old Act’s provisions continue to apply to pre-existing claims discovered before June 1, 2013. Transition rules in the new Act govern pre-existing claims arising from acts or omissions that occur before June 1, 2013 but are discovered on or after that date.

As with any legislative change, understanding the new law and how it applies to your area of practice is essential for avoiding mistakes. Education and information is available through various resources.  

Limitations and Deadlines Quick Reference List – updated to June 1, 2014

The new Quick Reference List is updated to reflect the new Limitation Act and other changes introduced since it was first published with Beat the clock: Timely lessons from 1600 lawyers in 2007.

It is available online and will be updated from time to time. A hard copy was mailed to every lawyer in private practice in June 2014. Other lawyers can receive a copy (while supplies last) by sending an email request, along with your name and address, to insurance@lsbc.org.

Tips on managing limitations under the new Act

Limitations create risks for lawyers and the new Limitation Act has the potential to increase that risk. Protect yourself by following these tips.

  1. Act early. New limitations are generally two years, not six or 10. 
  2. You may need to educate your clients. They, too, need to act early. 
  3. Flag and diarize limitations for all remedies relating to a claim – judicial and non judicial (including contractual).
  4. Incorporate the shorter limitations into your firm’s electronic diary system. 
  5. Don’t assume a limitation applies. The new Act expands the old Act’s list of exempted claims. 
  6. Think outside the new Act box. The applicable limitation may still be found in another statute (and it may be very short). 
  7. Consider the new Act’s effect on the contracts and agreements you draft. 
  8. Watch out – three more potential hot spots: claims for contribution or indemnity, demand loans (no fixed conditions of repayment) and medical malpractice claims.
  9. If the act or omission occurred before June 1, 2013, remember the transition rules. Even if the discovery is after June 1, 2013, it may still be appropriate to sue before June 1, 2015.
  10. Always use a non-retainer, disengagement or wrap-up letter with a limitation warning.

For more details and tips, see Ten tips to beat the reset clock, Insurance Issues, Summer 2013.

Beat the Clock: Lessons learned in managing limitation risk

Year after year, lawyers from every area of practice – big firms and small firms, senior lawyers and new calls – fall into the same traps. In fact, one in every four reports of claims and potential claims to LIF is triggered by a missed limitation or deadline.

The good news is that you can prevent missed deadlines by adopting the simple practices and procedures laid out in our award winning publication Beat the clock: Timely Lessons from 1600 Lawyers (2007). The guide offers more than 70 tips to prevent missed deadlines, along with real-life stories behind the mistakes. Four sections address each of the main causes of missed deadlines:

Oversights

Oversights account for more than half of all missed deadlines. Practice style may increase the exposure, but oversights also happen to lawyers who are generally careful and systematic. The causes are:

  • Flawed firm systems for substantive limitations
  • Flawed systems for other deadlines
  • Mistakes in document review or preparation
  • Inappropriate delegation
Legal issue failures

In 25 per cent of missed deadline reports, the lawyer is sufficiently competent in the area of law to act, but the loss is still caused by mismanagement of the specific legal issues. These mistakes occur because of either:

  • Lack of legal knowledge
  • Flawed legal analysis or strategy
Engagement management failures

Some professional liability claims have no connection whatsoever to the quality of the legal product the lawyer delivers. Rather, they arise because of the lawyer’s approach to doing business with clients. If a lawyer does not appreciate how critical it is to manage all aspects of the engagement, that lawyer increases the risk of claims arising through:

  • Not effectively managing the retainer or non-retainer
  • Acting when not qualified
  • Failures in managing transferred files
Communication failures

The remainder of all missed deadlines occur because the lawyer fails to communicate effectively – to listen, to ask, or to explain. Without a successful exchange of information between the lawyer and client (or others) the information critical to meeting a deadline is lost. Here’s why:

  • Not giving advice to clients
  • Failing to obtain information or instructions from clients
  • Miscommunication with non-clients

If you would like a hard copy of Beat the Clock (while supplies last), email your request, along with your name and address, to insurance@lsbc.org.

Other limitations and deadlines - municipalities

Suing a municipality for negligence? Remember, it’s a two-year limitation. However, the two-month notice provision in the Local Government Act must also be met. See Two-year limitation governs negligence claims against municipalities, Alert!, February 2002.

Further reading

Ten tips to beat the reset clock, Insurance Issues, Summer 2013
Limitations and Deadlines Quick Reference List, 2014
Beat the clock: one year later, Benchers' Bulletin, May 2008
Beat the clock: Timely Lessons from 1600 Lawyers, 2007
Two-year limitation governs negligence claims against municipalities, Alert!, February 2002