Tipp FM Legal Slot – 31st January 2012
John M. Lynch on Statute of Limitation[soundcloud id=’167085848′]
What is the Statute of Limitations?
The Statute of Limitations is the length of time a person has to make a claim following an incident that gives rise to the claim. Once the specified time has passed an action can no longer be brought. The logic is simple and grounded in common sense principles: after a certain length of time it is impossible to get accurate evidence – be it witnesses, people’s recollection etc. and the threat of legal action cannot hang over a person for an indefinite time.
Therefore, the law stepped in with the concept of the Statute of Limitations.
How long does a person have to take action?
If a person is outside the limitation period, they cannot take an action.
For personal injuries claims an injured party has, by and large, two years.
Although the Statute of Limitation for personal injury claims is two years, there is an escape clause where a person has no knowledge that an injury is connected with a wrong committed by someone else.
This situation arose in the UK in what became a well-publicised case. An illness known as asbestosis* was discovered, which in many cases resulted in fatalities. It was caused by asbestos which was a product that was used in the construction of roofs a number of years ago. Twenty or thirty years later it was discovered that asbestos caused problems with lungs to the extent that people died. Effectively, they were a slow burner and by the time the danger of asbestosis was discovered the Statute of Limitation of six years had long reached its limit.
As a result of Asbestosis disease the ‘date of knowledge’ was evolved based on the rationale that if you didn’t know about it you couldn’t possibly have done anything about it.
Whether the date of knowledge starts from the date that you consult with your doctor or the date where it became well known in the public arena is generally decided by the courts.
*Asbestosis is caused by long-term, repeated exposure to asbestos, a natural fiber that is used for various industrial purposes, such as insulation and car brake linings. Fibers of asbestos in the air are inhaled and become lodged in the lungs. As a result, lung tissue is scarred and lungs are unable to contract and expand normally.
Does the ‘date of knowledge’ apply in Ireland?
The Statute of Limitations (Amendment) Act 1991 introduced the ‘date of knowledge’ for personal injury cases. The date of knowledge is applied when the date the wrong/injury takes place differs from the date the wrong/injury is discovered. This means that in situations where the injury may not be obvious at first the time limit for actions does not begin until the injured party is aware of the injury. The date of knowledge has been applied in medical negligence cases; a person who receives a negligent medical procedure may not have knowledge of the injury at first until the injuries cause problems or they become aware that such problems arose as a consequence of such procedures. The ‘date of knowledge’ ensures that the time limit does not run out before a person realises they have an injury/action.
Does the Statute of Limitation apply to other areas of law?
The example of asbestosis disease relates to tort law. The Statute of Limitation also applies to contract cases where if a person does not do his work properly because of negligence the injured party is entitled to sue the person in contract within a period of six years under contract law.
Interestingly there is no date of knowledge in this area of law.
This was highlighted In the UK in 1983 Pirelli General Cable Works Limited -v- Oscar Faber and Partners involved a job carried out on concrete silos, one of which collapsed long years after it was built. However, the injured party was not successful as the limitation period had expired and it was decided that the date of knowledge did not extend to contract law.
What are the time limits for different areas of law?
- If going after an account – 6 years
- Tort other than personal injuries – 6 years
- Contract – 6 years
- Enforcing an arbitration award – 6 years
- Estate – 6 years or 12 years depending on circumstances
- Land – Adverse possession – 12 years, or 30 years if the State are taking an action
- Unfair dismissal – 6 months
Overlapping Statute of Limitation time periods
The reason that I highlight the significance of the Statute of Limitations in terms of New Year’s Resolutions is that it is a complex area of law that needs to be checked in each individual case to ensure that you are not out of time to take your case to Court.
- A case that has illustrated this is DePuyASRHip Implant Recall which has a mix of different areas of law – which could include Product Liability and medical negligence and personal injury.
- Comment on PIP and limitation period – lapses in March 2012
What if I am owed money and I am offered part-payment, does the ‘clock stop ticking’ on the limitation period and should I accept the money?
If someone acknowledges a debt this generally stops the clock running out.
However, if you accept the payment and it is only a part payment you should ensure that you acknowledge the payment as a part payment only.
Review your Existing Proceedings.
You should review the solvency of the defendant if you have started your case against someone.
The solvency of the other party is now a critical factor in taking a case and in refusing an offer in settlement or, if offered, part-payment.
A lot of people have been caught in the last two years as they started proceedings against a defendant who was solvent when proceedings started and then became insolvent.
If there is a possibility that the defendant may be in financial difficulty do a company search to determine whether this is rumour or fact at e.g. companies’ office or local district / circuit court.
Where does ADR (Alternative Dispute Resolution) fit into all of this?
The option of resolving disputes out of Court is now becoming a big issue because of the cost, the time and the uncertainty of litigation.
Clients are, therefore, well advised to consider mediation or other forms of alternative dispute mechanisms as a viable option to a fully contested Court hearing.
At Lynch Solicitors we are proficient in both approaches and will tailor each case to take advantage of either or both. Many cases benefit from a mixed approach and it is essential to put a case plan in place to take advantage of this.
If I have suffered an injury how can I ensure the time limit I have to make my claim will not expire?
It is very important to contact us, at Lynch Solicitors, immediately when your difficulty or injury occurs, or as soon as you have knowledge of your injury, to ensure your case is not affected by the Statute of Limitations.
Personal Debt and Insolvency
How is Personal Debt defined?
Personal debt in Ireland arose, not due to use of credit or being indebted, but rather over-indebtedness. Over-indebtedness arose because individuals and companies cannot now repay their debt within a reasonable time frame while at the same time having a reasonable standard of living.
According to FLAC, over-indebtedness can be defined as the ‘imbalance or shortfall between income and expenditure. Borrowing to bridge that gap, without having the necessary means to service the debt within a reasonable timeframe, is the point at which an individual becomes over-indebted.’
How did the level of debt escalate?
During the Celtic Tiger years access to credit became easier for everyone because financial institutions were lending more readily and with lower interest rates. When the economic downturn happened suddenly people experienced economic shock with job losses and were faced with an inability to manage ad repay debts within a reasonable time period leading to situations such as repossession of houses, businesses and so on, which as we saw were occurring far too regularly last year.
The level of debt increased sharply from 1995 to 2010. In 1995 for every €48 borrowed €100 was being earned, whereas in 2010 for every €176 borrowed only €100 was earned.
What percentage of Irish residents have mortgage arrears and what advice can you offer to those residents?
According to the Central Bank, almost 13 per cent of private residential mortgages were either more than 90 days in arrears or had been restructured at the end of September 2011. We previously advised listeners on the current situation in Ireland, which is two-fold and involves both the issues of mortgage affordability and negative equity.
1) Meet your lender as coming to an arrangement with your lender is the only viable option. An AIBspokesperson told Pricewatch that the purpose of such a meeting is “to put together a solution through which borrowers manage their financial difficulties as best they can rather than allowing them to grow in the future.”
2) The bank will potentially offer one of three possible resolutions: An extension of the term, a switch to interest-only repayments; or a moratorium, or a reduction on repayments altogether.
Do Irish bankruptcy laws differ from other countries?
In Ireland, in comparison with other countries, we are lacking formal insolvency schemes and the current bankruptcy system is unsuitable for current debtors. In England, Wales and the US there are personal insolvency options. The period of bankruptcy in Ireland is 12 years whereas in the UK bankruptcy can be discharged after one year.
Ireland’s focus has been on funding from MABS (Money Advice and Budgeting Service), which is a non-profit debt counselling organisation dealing with over-indebted clients.
Has the government taken steps to review our personal insolvency and bankruptcy laws?
In 2010 the Law Reform Commission interim report on Personal Debt Management and Debt Enforcement recommended several possible changes to the law on the enforcement of debt.
The main proposed reforms to current Bankruptcy Legislation are:
- An automatic discharge from Bankruptcy after 3 years subject to certain conditions:-
- An increase in the minimum debt level necessary to bring a Creditors Bankruptcy Petition from €1,900.00 to€50,000.00
- Revenue to lose its preferential status in the Bankruptcy process.
- The introduction of a system in Personal Insolvency similar to Section 150 / Section 160 of the Companies Acts (Restriction/Disqualification of Company Directors).
The Civil Law (Miscellaneous Provisions) Bill 2010 proposes to implement LRC recommendation to reduce the period for discharge from bankruptcy from 12 to 6 years and also that bankruptcies be automatically discharged after 20 years.
In February 2010 the Government appointed an “Expert Group on Mortgage Arrears and Personal Debt” to assist homeowners who are struggling to pay their mortgages. The Expert Group published an Interim report, on 5th July 2010, which recommends extensive changes in this area.
Personal Insolvency Bill
Last week the government announced that struggling homeowners will be given the chance to write down their debt on their mortgages by spreading it over a six year period. The deals will be dealt with on a case by case basis and creditors, such as banks, will have to agree. Minister for Justice, Alan Shatter, has said that the Bankruptcy and Insolvency proposals will be published by the end of April ad enacted by July or September.
The Personal Insolvency Bill will assist personal or mortgage debtors
- A debt relief certificate will allow debts of less than €20,000 to be written off. These debts are likely to be credit card debt and personal loans. In order to qualify borrowers must have a monthly disposable income of €60.
- A debt settlement agreement will cover loans with two or more creditors in the amount of €20,000 or more.
- A personal insolvency arrangement will apply specifically to mortgage holders for secured and unsecured debts of €20,000 to €3million. 65% of the lenders must be in agreement for some of the debt to be written down.
When the new measures are introduced borrowers will have to apply to insolvency agencies though companies such as the Money Advice and Budgeting Service (MABS).
In addition, a significant new measure under the bill is to reduce the bankruptcy period from 12 years to 3.