Europeans tend not to refer to the legal mechanism for acquiring or losing rights as "limitation", but as "prescription". It is an artificial mechanism, derived from legislation instead of principles of common or natural law. Its first recorded appearance was in 424 AD, Emperor Theodosius prescribing a 30-year period for bringing most forms of legal actions to protect property rights.
This series of articles will focus on the extinctive effect of limitation, i.e. when a right of action becomes time-barred, in various European jurisdictions, starting with France.
A preliminary observation to make is that, with some exceptions, e.g. such as those relating to defective products under the Consumer Protection Act 1987 (which tend to have their origins in European Union directives), limitation under Common Law generally only bars the claimant’s ability to enforce the right. In Europe, the general approach is that limitation once acquired bars both the right and the remedy.
What are the general limitation periods?
French law on limitation was reformed by Law nº 2008-561 dated 17 June 2008, and has been incorporated into the Civil Code. Personal or property actions now have a limitation period of five years, starting from the date the holder of the right knew or should have known the facts allowing him to exercise it (Article 2224).
Immediately, we see a different approach more closely akin to the English regime for latent damage. The period only runs once the claimant becomes aware of the facts giving rise to a claim. They will often be apparent very shortly after the occurrence of the relevant events, but not necessarily.
Actions involving bodily injury brought by a direct or indirect victim are barred after 10 years. If the claim is the result of torture, barbarous acts or sexual violence, or involves aggression committed against a minor, the period is 20 years. The period, however, does not start until the date of the consolidation of the victim's injury (Article 2226).
Only real property actions retain the limitation period of 30 years, but again, this runs from the date of the acquisition of knowledge.
Do the courts apply the rules of limitation mandatorily?
Judges cannot determine a case on the basis that the right is time-barred, unless a party pleads it. Furthermore, unless specifically waived, limitation can be pleaded for the first time at any point in the proceedings, even before the Court of Appeal. Thus, a payment to discharge a debt cannot be recovered because the limitation period had expired.
Can the rules be varied or waived?
Limitation can only be waived once it has been acquired. Waiver can be express or tacit, but must be unequivocal and the party waiving must be entitled to exercise that right himself. Even if the party under the obligation waives it, any other person, interested in limitation being acquired, can invoke the defence of limitation.
The parties can agree to:
- Shorten or extend the period, but not to less than one year or more than 10 years.
- Suspend or interrupt it on grounds other than those stipulated by law - but this is subject to a number of exceptions for certain types of transaction set out in Article 2254.
Suspension or interruption of the limitation period
Suspension of the period stops its running temporarily without erasing the period already completed. Interruption erases the period of limitation acquired to date and starts a new period of the same length as the previous one.
What suspends limitation?
A conditional obligation suspends limitation until the condition is fulfilled (Article 2233) as does force majeure (Article 2234), legal incapacity, i.e. minors and adults in the care of a guardian (Article 2235), the state of marriage as between spouses or a civil partnership as between partners (Article 2236).
An agreement to mediate or conciliate suspends limitation (Article 2238). In default of a written agreement, the suspension starts on the date of the first mediation or conciliation meeting. A judge’s order for a mesure d’instruction - an evidence gathering measure, e.g. a court expert investigation, also suspends limitation (Article 2239).
When the period starts to run again, it cannot be for less than six months.
What interrupts limitation?
The defendant’s admission of right in question (Article 2240) or the commencement of proceedings, even if for summary relief, or in the wrong jurisdiction or if the claim document is void for a procedural defect, interrupt limitation (Articles 2240-2241). The interruption continues until the claim is withdrawn, the action expires or the claim is finally rejected (Article 2242-2243). The interruption also applies against the guarantor of an obligation (Article 2246).
Claims involving insurance and reinsurance contracts
Article L114-1 of the Insurance Code imposes a two year limitation period. The period runs in the event of non-disclosure, omission, false or incorrect statement on the risk run, from the date the insurer acquires knowledge of it. Regarding a loss, it runs from the date the interested parties had knowledge of it. They must prove that they did not know of it until then.
When an insured’s action follows recourse by a third party, the period only runs from the day the latter brings a court action against, or is indemnified by, the insured. The period can be interrupted by one of the ordinary causes (supra) and by the appointment of experts following a loss. Interruption is achieved by the insurer sending a registered letter to the insured claiming payment of premiums and by the insured to the insurer for the settlement of an indemnity.
The two year period does not apply to reinsurance contracts, which are governed by the general law.
Direct actions by third parties against insurers
Article L124-3 of the Insurance Code prohibits an insurer from paying all or part of an indemnity to anyone other than the injured third party, as long as this third party has not been paid off. Since 17 December 2007, an injured third party has a direct right of action against the civil liability insurer of a wrongdoer.
This direct action, having its basis in the right of the victim to compensation of his loss, is barred for limitation on the expiry of the same period as his action against the wrongdoer and can only be pursued against the insurer beyond that period, while the latter remains at risk of its insured’s recourse. Similarly, in construction claims, the building owner’s direct action against the decennial liability insurer (Article 124-3 of the Insurance Code) has its basis in the victim’s right to compensation and is barred for limitation by the same period as the victim’s action against the responsible party.
The victim is not therefore constrained by the two year period applicable between insurer and insured. Since 1986, the Cour de cassation has extended limitation for third party claims, so the insurer can be on risk for up to 12 years.
Under French law, a vendor of goods is liable for concealed defects even if he is unaware of them, unless he has stipulated in the sale that he was not committed to a guarantee of this type (Article 1641). The purchaser must commence his action based on concealed/latent defects within two years from the discovery of the defect (Article 1648).
Where construction defects are concealed in a new building or the works are non-compliant, the action by the owner must be commenced within one year of the date on which the vendor/contractor can be discharged from liability for apparent defects or "defects of compliance" (Article 1642-1). Article 1792 provides a regime whereby any constructor of works – which includes an architect, contractor or technician or any party with whom the owner has a contract for works – is liable in law to the owner or a purchaser for damage (including ground defects) which compromises the strength of the building or, if it affects one of its constituent parts or an item of plant, renders it unfit for purpose.
In such cases, any physical or corporate person who may be liable on this basis remains liable for the guarantee imposed by Article 1792 for a period of 10 years running from handover of the works. In the case of other items of plant incorporated in the works, these are subject to a guarantee of good working order of a minimum of two years from handover.
As in English law, French law implemented EU Directive 85/374. Article 1386-17 similarly provides that an action is barred for limitation within three years running from the date on which the claimant should have been aware of the damage, the defect and the identity of the producer. This is subject to a longstop period of 10 years from the date the product was first marketed (Article 1386-16).
This is not intended as an exhaustive account of limitation periods applicable to claims under French law, how they commence and run to expiry. Specific advice should be sought when considering whether any claim is barred for limitation in this jurisdiction or not.