Canada: New B.C. Limitation Act In Force In British Columbia

On June 1, 2013, the new Limitation Act (New Act) came into force. The New Act changes the time limits for filing civil lawsuits. It replaces the previous two-, six- and 10-year limitation periods with a basic limitation period beginning two years from "discovery" and replaces the previous 30-year ultimate limitation period with a 15-year period commencing from the date of the act or omission that forms the basis of the claim (with some exceptions). In many cases, limitations may expire much earlier under the New Act than they would have under the former Limitation Act (Old Act).

The changes follow those made in other provinces with modernized limitation statutes, such as Ontario, Alberta, Saskatchewan and New Brunswick. The rationales behind the reform were that the limitation periods under the Old Act have caused confusion, there was a desire to promote certainty across provinces, and there was a need to modernize the Old Act in response to calls from a broad range of stakeholders. However, it should be noted that the British Columbia Legislature has chosen to depart from the precedent set by other provinces in a number of respects.

"Discovery" is a defined term under the New Act and may differ from "discoverability" under the Old Act. It is important to note that "discovery," as statutorily defined, does not necessarily require actual knowledge that a claim exists. Moreover, the New Act provides special rules for assessing when certain causes of action are deemed to have been "discovered." In some cases, the new rules will result in limitation periods commencing earlier than they would have under the old rules. Additionally, changes to the ultimate limitation period could drastically accelerate the drop-dead date for many claims. Under the New Act, the ultimate limitation period is not only halved to 15 years, but will also start running from the time of the act or omission upon which the claim is based, rather than from the accrual of a cause of action. For example, the limitation period may commence before a plaintiff has suffered damages from a defendant's act or omission, unlike under the Old Act.

The New Act includes transitional rules for "pre-existing claims," as defined by the Old Act. The transitional rules preserve the old two-, six- and 10-year limitation periods for "pre-existing claims" that had not been "discovered" by the June 1, 2013, effective date, while potentially making such claims subject to provisions of the New Act, such as the definition of "discovery" and, in some cases, the new 15-year ultimate limitation period. The interpretation and application of both the definition of a "pre-existing claim" and the transitional limitation period for such a claim may be less than straightforward in some instances. Legal advice is recommended with respect to any claim potentially falling within the transitional rules.

In addition, a variety of complex exceptions may apply under the New Act, and each specific situation should be carefully considered with legal guidance. Companies and individuals are well advised to carefully consider aging discovered, but unfiled claims, and seek legal advice on the applicable period. In particular, potential claims that are close to or more than two years old should be addressed immediately.

For a further comparison of the legislative changes, refer to New Limitation Act (Bill 34) Proposed in British Columbia.