British Columbia's Limitation Act, RSBC 1996, c. 266 (the "Current Act"), sets out the time period that an individual has to file a civil claim. Falling in line with reform that has already taken place throughout Canada, a new limitations statute, the Limitation Act, SBC 2012, c. 13 (the "New Act"), will come into force on June 1, 2013. Although it is not meant to be exhaustive, this bulletin outlines some of the more fundamental changes to the province's framework on limitation periods.
1. Basic limitation period of 2 years
Three basic limitation periods exist under the Current Act, namely, two years, six years, or ten years, depending on the type of action. The basic limitation period begins the date on which the person has the right to bring an action. Depending on the type of action, the start of the limitation period may be modified by postponement.
Under the New Act, the basic limitation period has been shortened so that the default timeframe is two years, beginning the day on which the claim is "discovered". A ten year period is in place for the enforcement of civil judgments, and a six year period for debts owed to the government. Like the Current Act, the New Act also sets out a list of claims to which the statute does not apply.
Interestingly, section 36 of the New Act will amend the Environmental Management Act, SBC 2003, c. 53, such that cost-recovery claims available under that statute will not be subject to any limitation period at all. Time will tell whether the legislature will remove or amend this provision before the New Act is brought into force.
2. Discoverability will apply to all claims
Under the Current Act, the limitation period of a select group of claims, such as those for personal injury or damage to property, may be postponed by the principle of discoverability. This means that the limitation period does not begin unless and until the plaintiff is aware that he or she has grounds for a civil claim and that he/she is in a position to commence an action.
Under the New Act, discoverability applies to all claims. In particular, a claim is discovered when a person knew, or reasonably ought to have known: (a) that the loss had occurred; (b) that the loss was caused by an act or omission; (c) the identity of the person responsible for the act or omission; and (d) that a court proceeding would be the appropriate course of action to remedy the loss.
3. Ultimate limitation period of 15 years (from the date an act or omission occurs)
Under the New Act, the ultimate limitation period for which a claim can be commenced has been reduced from 30 years to 15 years. Unlike the Current Act, in which claims against hospitals and medical practitioners were exempted from the ultimate limitation period, under the New Act, these types of claims will now be subject to the ultimate limitation period (i.e. 15 years).
Oddly, the New Act sets out that the ultimate limitation period begins when the act or omission takes place, not when the actual loss that would give rise to a civil claim occurs. Depending on the circumstances of the claim, an ultimate limitation period may expire, barring the ability to file a civil claim, before the actual harm takes place.
4. Confirming a cause of action will affect the ultimate limitation period
Under the Current Act, acknowledging the cause of action or making a payment towards the cause of action before the limitation period expires resets the limitation period. It does not, however, affect the ultimate limitation period.
Under the New Act, a cause of action can be confirmed for the purposes of restarting the basic limitation period and the ultimate limitation period. For certainty, the New Act requires that an acknowledgement must be: (a) in writing; (b) signed, by hand or by electronic signature; (c) made by the person making the acknowledgement; and (d) made to the person with the claim. Part payment of a liquidated sum is also acknowledgement, as is a debtor's performance or a creditor's acceptance under a security agreement.
5. Shortened limitation periods for claims for contribution and indemnity
The New Act will also significantly reduce a defendant's right to bring claims for contribution and indemnity against third parties. Under the Current Act, the limitation period for a defendant to commence a claim for contribution and indemnity does not begin to toll until that defendant has first been found liable by a court. Under the New Act, however, the limitation period for such claims runs on the later of the day on which the defendant was served with the Notice of Civil Claim or when that defendant reasonably contemplated that a claim for contribution and indemnity could be made.
6. Uncertainty re: the ability of private parties to vary limitation periods by agreement
While there has been no change on this issue, it bears noting that like the Current Act, the New Act remains silent on whether parties may suspend, extend, vary or exclude governing limitation periods. As such, it remains unclear how the New Act might affect agreements purporting to change limitation periods or those than contain arbitration clauses.
7. Transition – New Act will only apply to claims discovered after June 1, 2013
Generally speaking, and subject to some exceptions, if a claim was discovered before the New Act is in effect, then the Current Act will apply. If the offending act takes place before the New Act is in force, but the loss is discovered afterwards, then the New Act will apply.
Final Thoughts
While the new Limitation Act seeks to simplify limitation periods in British Columbia, several elements of the statute, such as the rules regarding discoverability and postponement, will likely generate litigation in the years to come. Time will tell whether the New Act will provide litigants with a more balanced and more equitable set of rules.
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