On 8 June 2018 the Act on the Amendment to the Civil Code Act and Certain other Acts of 13 April 2018, which changes basic rules concerning limitation periods for civil law claims, was published in the Journal of Laws. The changes come into effect on 9 July 2018.

Importantly, the new regulations also affect claims arising prior to the effective date of the Act.

Main changes

  • The basic limitation period has been reduced from 10 to 6 years. However, a three-year period has been left for claims for periodic performances and claims related to business activity.
  • The limitation period for claims established by a final court decision or an arbitration award, as well as claims established by a settlement concluded before a court or arbitral tribunal or a settlement concluded before a mediator and approved by a court has been reduced from 10 to 6 years.
  • The period of prescription has been changed - according to the Act, if the limitation period for a given claim is at least 2 years, the end of the limitation period falls on the last day of the calendar year.

EXAMPLE: A claim related to the pursuit of a business activity (three-year limitation period), with the limitation period starting on 1 June 2018, would have lapsed on 1 June 2021. In accordance with the new Act, the limitation period will end on 31 December 2021.

  • The regime of limitations on claims by entrepreneurs against consumers has been tightened - the effect of the limitation will now occur by force of law, and not as a result of the defendant's plea raised before the court. This means that once the claim is time-barred, it will no longer be possible to pursue it in court.

Impact of the Act on claims arising prior to its entry into force

  • The new provisions apply to claims that have arisen prior to the Act's entry into force and which have not yet lapsed on the day that the legislation begins to apply. However:

Rule 1 – If the “new” prescription period is shorter than the “old” period (e.g. 6 instead of 10 years), then the “new” period will begin to count from the date of entry into force of the Act;

Rule 2 - However, if the claim, whose limitation period began before the Act entered into force, would have expired under the "old" term earlier, then the limitation occurs upon the lapse of that earlier term.

EXAMPLE 1: A claim whose limitation period was reduced from 10 to 6 years and whose limitation period began on 1 June 2015 will expire according to the 'new' term on 31 December 2024 (rule 1 will apply);

EXAMPLE 2: A claim whose limitation period has been reduced from 10 to 6 years and whose limitation period began on 1 June 2010 will expire according to the 'old' term on 1 June 2020 (rule 2 will apply).

  • Limitation periods for consumers shall not be shortened if such claims arose before the date of entry into force of the Act.
  • Prescribed claims by entrepreneurs against consumers are subject to the effects of the limitations specified in the Act as of the date of its entry into force.

EXAMPLE: Before the effective date of the Act, an entrepreneur brought an action for payment against a consumer with a prescribed claim. As of the coming into force of the Act, such actions shall be dismissed even if the consumer (defendant) has not pleaded the statutes of limitation.

Consequences of the changes with regards to the personal data protection

The amendment will also affect the retention periods for personal data contained in contracts with consumers. This may necessitate a verification of the information clauses and the privacy policy in terms of the data retention periods indicated in such documents.

The nature of the changes are significant primarily for entities engaged in debt recovery and the provision of B2C services. At the same time, from a broader point of view, changes in the limitation periods may affect the preparation of strategies for pursuing disputed claims, with consequences for the scope of the liability for damages.