A new Limitation Act came into force in B.C. on June 1st, 2013. The Limitation Act, SBC 2012, c 13 (the "New Act") is intended to simplify the process for civil claims and bring B.C.'s limitation periods in line with the modern approach adopted in many other provinces, including Alberta.
The New Act contains several significant differences from the old Limitation Act, RSBC 1996, c 226 (the "Old Act"):
- Basic Limitation Period - Under the Old Act, the basic limitation period varied between 2, 6 and 10 years based on the cause of action. The New Act implements a 2 year limitation period for most claims.
- Ultimate Limitation Period - The ultimate limitation period provided under the Old Act ranged from as short as 6 years to as long as 30 years. This has been replaced with a uniform ultimate limitation period of 15 years from the date an act or omission occurs for all causes of action, regardless of whether the claim has been discovered.
- Confirming a Cause of Action - Under the Old Act, the basic limitation period reset when a defendant confirmed that a plaintiff had a valid claim, but the ultimate limitation period continued to run. Under the New Act, both the basic and ultimate limitation periods reset.
- Third Party Claims - The Old Act did not provide a limitation period for third party claims, including claims for contribution and indemnity, so long as the originating claim was commenced within the appropriate limitation period. The New Act provides that claims for contribution and indemnity are subject to a 2 year limitation period from the later of the day on which the claimant is served with pleadings on which the claim for contribution and indemnity is based, or the first day on which the claimant knew or reasonably ought to have known that a claim for contribution or indemnity may be made.
Some elements of the Old Act remain unchanged in the New Act:
- Discoverability - The test for discoverability remains the same. The limitation period will not begin to run until a plaintiff is aware that it has a claim; however, plaintiffs are expected to exercise reasonable efforts to ascertain whether they have a potential claim.
- Contracting Out - Like the Old Act, the New Act is silent on a party's ability to contract out of limitation periods. Existing case law is likely to continue to apply and the court will review contracts on a contextual basis to determine if allowing the agreement is appropriate and just in the circumstances.
The transition rules in the New Act specify that the Old Act will continue to apply to claims that have been discovered before June 1st, 2013, and the New Act will apply to claims discovered on or after June 1st, 2013. For breach of contract claims, this means that if the breach was discovered before June 1st, 2013, the claim will attract the Old Act's basic limitation period of 6 years. However, if the breach is discovered on or after June 1st, 2013, the New Act will apply and the limitation period will be two years.
If you have any questions about how the new B.C. Limitation Act operates and its potential impact on you or your business, please contact Michael P. Theroux or Laura M. Gill.