Reminder - New British Columbia Limitation Act Coming Into Force

On June 1, 2013 the significantly revamped Limitation Act will come into effect in British Columbia. The Act imposes a tight two-year limitation period on most claims. Any company or person with business ties to British Columbia should closely monitor areas where litigation may be necessary, and review contractual provisions concerning potential litigation, to make sure that any potential claims are not statute-barred by the new Act.

We summarize below the main changes under the new Act. This is not an exhaustive review.

BASIC TWO-YEAR LIMITATION PERIOD

Under the new Limitation Act, in most circumstances, a claimant must sue within two years of the discovery of their claim. For most claims, this is a significant shortening of the limitation period under the present Act.

A claim is "discovered" under the new Limitation Act when the claimant knows that injury, loss or damage has occurred as a result of the defendant's actions, and that a court proceeding would be an appropriate way to address that harm. A claimant must exercise reasonable diligence in investigating, discovering, and acting on a potential claim.

Note that the new Limitation Act provides for special discovery rules for specific types of claims, including claims involving fraud. There are special rules relating to discovery of claims by successors, predecessors, principals and agents. The new Act also provides that if another statute provides a limitation that should govern, that other statute applies.

These rules should be reviewed carefully, as they alter the formula for determining limitation periods.

ULTIMATE LIMITATION PERIOD REDUCED TO 15 YEARS

Even if the two-year limitation period can be extended through late discovery, a claim must still be brought within the "ultimate limitation period". The new Act sets this period at 15 years (cutting in half the current period of 30 years).

The ultimate limitation period "clock" starts ticking when the original act or omission takes place, regardless of whether damage has yet occurred or whether the claim has been discovered.

Once 15 years from the original act or omission has passed, all remedies, even private remedies (including arbitration rights and references to accountants and auditors), are extinguished, barring any claim.

This extinguishment, however, is modified in three important ways. First, if the defendant confirms that the claimant has a claim against the defendant, the limitation clock will be reset for both the basic...