On 15 June 2018, Parliament adopted the new statute of limitations aimed at better protecting the assertion of claims for long-term damages against limitation. The main points are the extension of the brief relative period of limitation and the introduction of a twenty-year long absolute period of limitation in the event of death and bodily harm. The regulations concerning the suspension and interruption of limitation have also been changed.
With the referendum period having now come to an end unused, the revise statute of limitations will come into effect as of 1 January 2020. The new statute of limitations is already on practitioners’ minds, even before it has become law. For example, Dr Josianne Magnin presented on the suspension of limitation at a University of Lucerne convention dedicated to the new statute of limitations on 29 October 2019.
New period of limitation for Switzerland – Will it finally make it possible to claim compensation for long-term damages in court?
The term “long-term damages” means that the actual damage resulting from a violation in contract or in tort is only discovered after a long period of time has passed. One good example is the numerous asbestos-related cases, when the injured parties only suffered damages several decades after the actual exposure. The current statute of limitations only provides insufficient protection in the event of such long-term damages, as the absolute period of limitation is de lege lata limited to 10 years. One important element of the proposal was therefore the extension of the period of limitation to satisfy claims from tort or unjust enrichment law.
Extension of the period of limitation in tort or unjust enrichment law
Under the revised law, claims for damages and compensation can be asserted for losses of purely financial nature, for personal injuries and for property damages within 3 years of the damages and the injuring/damaging party being identified (new Article 61 Section 1 of the Swiss Code of Obligations (OR)). Up until now, this was only possible within 1 year of identification because the mentioned relative period of limitation expired afterwards.
The absolute periods of limitation have been at least increased for claims resulting from bodily harm inflicted to or the killing of a person, so-called personal injuries. It has been increased from 10 to 20 years, counting from the day on which the damaging actions took place or ceased (new Article 61 Section 1bis of the Swiss Code of Obligations (OR)).
This change is a welcome one, seeing as a judgement passed by the European Court of Human Rights as long ago as 2014 (Moor vs. Switzerland from 11 March 2014) already concluded that a period of limitation of ten years was to be considered too short in the case of asbestos victims. However, it remains to be seen in future litigations whether it was reasonable to change the old fixed period of limitation to a new period that may now be longer, but that is still fixed in the revised statute of limitations.
The extraordinary periods of limitation for claims resulting from criminal offences require revision, too. The basic rule says that any claims for damages or compensation in connection with a criminal offence do not expire before the expiry of the period of limitation for criminal prosecution. For example, the civil period of limitation is 15 years in the event of tortious conduct that fulfils all the conditions for it to be classified as fraud according to Article 146 of the Penal Code. Furthermore, new Article 60 Section 2 of the Swiss Code of Obligations has introduced an extension period: In the event of a first-instance criminal conviction, the period of limitation for a civil claim does not expire until at least three years since the criminal conviction has been declared.
Barely any changes to contract law
Hardly any changes have been made to the periods of limitation in contract law. However, new Article 128a of the Swiss Code of Obligations has also introduced a relative period of limitation of three years and an absolute period of limitation of twenty years for claims for damages or compensation in connection with personal injuries that are in violation of the contractual provisions.
Companies and business people that can become subject to claims due to personal injuries, e.g. doctors, are therefore advised to keep their business records for 20 years from now on in order for them to have proof that can be used for their defence if needed.
Waiver of objections resulting from expiry of the period of limitation
Another change concerns objections resulting from expiry of the period of limitation. By filing such objection, the debtor declares that they will not be settling a claim due to the period of limitation having expired.
Article 141 of the Swiss Code of Obligations will continue to regulate the waiver of such objections from 1 January 2020. Article 141 Section 1 of the Swiss Code of Obligations is now more precise and provides for a time limitation. This means that from the start of the period of limitation, it is possible to waive raising an objection resulting from expiry of the period of limitation for a maximum of ten years. Thus, it is not possible to grant such waiver in advance / prior to the start of the period of limitation. In the event of a waiver without a time limitation, this does not lead to its becoming invalid; however, the duration is to be reduced to the permitted period, i.e. 10 years.
New additions: Article 141 Section 1bis of the Swiss Code of Obligations: “The waiver must be in writing. In terms & conditions, only the user can waive raising objections resulting from expiry of the period of limitation.” Thus, the revised law does not allow it to hide the waiver of objections resulting from expiry of the period of limitation in terms & conditions at the expense of the acceptor.
Suspension of the period of limitations during the time of extrajudicial dispute resolution endeavours
The revision of the statute of limitation has ultimately introduced a new provision, according to which the limitation during the time of settlement talks, mediation proceedings or other proceedings aiming at extrajudicial dispute resolution is suspended, provided this has been agreed by the Parties in writing (new Article 134 Section 1 (8) of the Swiss Code of Obligations). However, in contrast to e.g. Germany, the limitation is not automatically suspended when extrajudicial dispute resolution endeavours are initiated. Much rather, an according written agreement is assumed.
Unlike in the case of the waiver of objections resulting from expiry of period of limitation, a limitation suspension can be agreed in advance, prior to the start of the period of limitation. For example, in the event of a legal relationship, it would be possible to include dispute resolution clauses in the contract in question (e.g. a purchase agreement) and to combine them with a provision concerning limitation suspension (e.g. at the initiation of settlement talks).
Due to the (still) fixed periods of limitation, the revised statute of limitations also means that a claim in the event of long-term damages is doomed to failure from the get-go, as it cannot be ruled out that long-term damages will only come to light after 20 years. As the event that marks the start of the absolute period of limitation is still the damaging action or its cessation, this would mean that a claim can no longer be asserted de lege ferenda.
In other words, even under the new law, the limitation period for a claim for damages might expire, even prior to the damages manifesting themselves.
Therefore, the revised statute of limitation does not completely solve the problem of asserting claims in connection with long-term bodily harm. However, the situation is somewhat alleviated thanks to the longer periods of limitation.