Prescription and interruption of the prescription

What is a legal action?

Based on the Dutch Civil Code (DCC), parties can have claims against each other. Someone who can claim something from someone else may bring a legal action with regard to that claim. The component “legal” means that the entitled party is entitled at law (which means: at the civil court) to initiate proceedings with regard to his claim, such as payment of an amount of money or the transfer of an item. Bringing a legal action therefore means bringing a claim before the court.

Legal action unrelated to performance

Therefore, a legal action is the right to demand before the competent court that the debtor of the relevant performance is ordered to deliver this performance. In this respect, the legal action is unrelated to the performance itself: the obligation to perform the obligation is independent of the right to enforce performance of that obligation at law. A non-enforceable obligation is also called a natural obligation (Book 6, article 3 DCC). As long as a creditor has the right to demand performance of his obligation at law, this also means that the debtor of that obligation has to consider that such claim may be brought against him. Of course, this debtor must be able to put up a defence. The expiry of time makes putting up such defence difficult. When, for example, a debtor wants to put up a defence against a claim based on a (written) loan agreement by taking the position that although the debt existed at some point, the debtor has settled or already has paid it, the burden of proof for this defence will rest on the debtor. This means that the debtor has to be able to furnish evidence.

Written evidence required for defence against legal actions

If evidence has to be provided by means of written evidence, this means that as long as the creditor can bring the claim concerned, the debtor must have the evidence at his disposal to furnish it a later time. If he no longer has the evidence, this will in principle be at his risk. Many evidentiary documents, such as records, emails, and letters, are archived or pass into oblivion after some time. The same applies for evidence by witnesses with regard to oral agreements. If owing to the lapse of time a witness can no longer remember certain events or if, for example, the witness has died, this will in principle be at the risk of the debtor who has to furnish the affirmative evidence. Therefore, the longer a creditor has the possibility of bringing a claim, the less this is compatible with legal certainty. This is why limitation periods apply for legal actions.

Consequence of prescription: claim no longer enforceable at law

After the expiry of a limitation period, the claim can no longer be enforced at law; only a natural obligation remains. In principle, it is possible to settle a natural obligation.

Most important limitation periods

A general limitation period of 20 years applies, unless the law stipulates a different limitation period. In most cases, however, a legal action expires after 5 years, or even earlier. When this period commences depends on the nature of the legal action. The most important limitation periods are explained below.

• Limitation period of 5 years for legal actions for the performance of an obligation: A legal action for the performance of a contractual obligation (such as for example a loan agreement) expires 5 years after the claim has become due and payable. A claim for delivery of an item that has already been paid also expires after 5 years (Book 3, article 307, paragraph 1 DCC). Legal actions for payment of interests on sums of money, annuities, dividends, rents and everything that has to be paid within one year or at shorter notice expire 5 years after the date on which they became due and payable (Book 3, article 308 DCC).
• Legal action on account of loss or for payment of a penalty: A legal action on account of loss or for payment of an agreed penalty expires by the lapse of 5 years following the day on which the injured party has become aware of the loss or the liability for payment of a penalty and of the person who is liable for this, and in any case by the lapse of 20 years (Book 3, article 310, paragraph 1 DCC). As it may take some time for this moment to arrive, the law stipulates that the claim in any case expires after a period of 20 years after the claim has become due and payable (with some exceptions, such as environmental pollution, sexual offences, and bodily injury or death).
• Deviating limitation periods, e.g. employment termination law, tax law, and consumer sale: Several special limitation periods apply, for example in employment termination law, tax law, and consumer sale. For example, a claim for payment of the purchase price in case of consumer sale already expires after 2 years (Book 7, article 28 DCC).

Prescription of exercising the power of enforcement of judgments

The power of enforcement of a judgment expires 20 years after the day on which the judgment was given. However, the limitation period is 5 years for everything that pursuant to the judgment has to be paid within one year or at shorter notice; in practice, this concerns interest. Interest amounts that pursuant to a judgment are owed annually or at shorter notice therefore expire by the lapse of 5 years, except for timely interruption of the prescription.

Prescription of a claim recorded in a notarial deed

The claim that has been recorded in a notarial deed can be enforced on the basis of the first enforceable authenticated copy of this deed, without judicial determination, provided that the claim has been recorded sufficiently clearly. However, this claim is subject to prescription; in principle, the claim expires 5 years after the date on which the claim became due and payable. The power of enforcement of a notarial deed in which the claim has been recorded therefore does not expire after 20 years, but after 5 years.

Interruption?

In most cases, limitation periods can be interrupted. A running limitation period may be interrupted by an act of prosecution (bringing a claim by means of a summons or a petition), by a written demand or notification, or by acknowledgement by the debtor. The manner of interruption required may differ, depending on the nature of the claim to be interrupted. For claims that do not require the performance of an agreement or compensation for damage, an interruption by means of a demand or written notification must be followed within 6 months by initiating proceedings. Failure to do so will result in prescription of the legal action. In principle, interruption of a claim for performance or compensation results in the commencement of a new limitation period (with a maximum of 20 years, though).

AMS Advocaten specialises in prescription and interruption of prescription

In most cases, a claim can therefore be interrupted by a demand by the creditor to the debtor to pay or otherwise perform the agreement. The demand must be made in writing, and the creditor must expressly reserve his right to performance of the relevant obligation in this document. As said before, sometimes a claim can only be interrupted by bringing a legal action or by initiating proceedings shortly after the written interruption. It is therefore advisable that you always consult a lawyer if you are faced with this complex issue.