Due to the end of 2021, we encourage you to consider whether you are entitled to any claims with the limitation period expiring at the end of the year. In cases where the limitation period will expire on December 31, 2021, we recommend that you take actions to stop the limitation period as soon as possible. Especially taking into account the fact that failure to act in relation to these claims will make their pursuit after the above-mentioned period ineffective. After the expiry of the limitation period, the debtor may refrain from satisfying the claim.
Limitation periods after the amendment act to the Polish Civil Code
In July 2018, an amendment act to the Polish Civil Code entered into force that changed the rules for calculating the limitation period. According to the currently binding wording of Art. 118 of the Civil Code, the end of the limitation period generally falls on the last day of a calendar year, unless the limitation period is shorter than two years.
General regulations and limitation periods in Polish civil law can be found in the Polish Civil Code and are as follow:
- 3 years for claims connected with conducting business activity and for claims concerning periodical performances, unless a specific regulation provides otherwise;
- 6 years for other claims, unless a specific regulation provides otherwise. The indicated limitation period has been shortened by the amendment, however, in the case of claims which arose before the amendment came into force, one should bear in mind the introductory provisions which regulate in detail the manner of calculating the limitation periods for such claims.
The Civil Code also provides for a number of other specific limitation periods, such as:
- claims under the contract of sales made in the course of the seller’s business shall be barred after 2 years;
- claims under a contract for a specific work shall be barred after 2 years from the commissioning of the work and 2 years from the date on which the work was to be delivered;
- a limitation period of 2 years applies also to some claims resulting from the mandate contract (among others, claims for remuneration for acts performed and for reimbursement of expenses by persons who permanently or within the scope of the operations of their enterprise perform acts of a given type).
So if you have unpaid 2019 sales invoices by your counterparty, it is most likely that their statute of limitations will expire at the end of this year.
What can be done to avoid the statute of limitations on these claims? The institution of interruption of the limitation period provides an answer. It should be emphasized at this point that the interruption of the limitation period, which will cause the limitation period to start running again, must be effective.
4 ways to interrupt the limitation period
1) Bringing a lawsuit
In order to interrupt the running of the limitation period by bringing a lawsuit before the expiry of the limitation period, the lawsuit must be successfully brought. This means in practice that it has no formal deficiencies and is properly paid (or has been submitted together with a request for exemption from the costs of filing a claim). If a lawsuit cannot be duly processed due to the party’s failure to comply with the formal requirements or to pay the applicable fee, the presiding judge shall request the party to remedy any errors or omissions therein or to pay the applicable fee within one week. A pleading whose errors or omissions are rectified within the prescribed time limit shall take effect as of being filed – including as a result of interruption of the limitation period. However, if the deficiencies are not remedied despite the summons, and the letter is not corrected or paid, the court will return it to the party. A return lawsuit shall not produce the effects which the law provides for filling of a lawsuit with the court – in such a case the limitation period will not be interrupted.
2) Motion for a summons to a conciliation session
Irrespective of the subject-matter jurisdiction of the court, a motion for a summons to a conciliation session may be filed with a district court of general jurisdiction over the opposing party or, if there are no grounds for establishing such jurisdiction, to the district court competent for the place of residence or registered office of the person making the request. As a result of the motion, a so-called conciliation session is initiated with a view to concluding a settlement before the court. The motion should briefly describe the facts of the case and submit settlement proposals. The conciliation procedure involves settlement negotiations between the parties. It is worth remembering, however, that the court does not take evidence as part of the conciliation.
In practice and in the judicature, it is controversial whether summons to a conciliatory attempt should lead to the interruption of the limitation period. Different, opposing views on the subject are formulated, which result primarily from the fact that, in the opinion of many lawyers, the institution of the settlement attempt is often misused and exploited solely for the purpose of interrupting the limitation period.
The issue of a motion for a summons to a conciliation session versus interruption of the limitation period was submitted to the Supreme Court for resolution in October 2020. Although a year has already passed, the resolution of the Supreme Court on this issue has not yet been issued. We hope that its issuance will resolve the existing doubts regarding the effectiveness of the interruption of the limitation period by filing a motion for a summons to a conciliation session.
3) Recognition of a claim by the debtor
Recognition of the claim is another method that results in the limitation period being interrupted. A distinction is made between:
- appropriate recognition – it is understood as an agreement between the debtor and the creditor, in which the debtor confirms the existence of his obligation and undertakes to fulfill it. The purpose of concluding such contracts is not only to interrupt the limitation period, but also to establish the claim, its amount and sometimes to secure it. An example of such recognition is, for example, a settlement;
- inappropriate recognition – it is a statement of the debtor’s knowledge, from which it follows that he is aware of the existence of the claim. Such a statement does not have to be formulated explicitly – it may result, for example, from a request to settle the debt in instalments or to defer the date of payment.
4) Initiation of mediation
The limitation period is interrupted when mediation is initiated by the party, i.e. when the mediator receives a correct request for mediation. However, if the other party does not consent to mediation or the mediator refuses to conduct mediation, then its initiation will not be effective, and thus the limitation period will not be interrupted.
Before the end of the year, it is a good idea to review cases with any claims. As a result of the amendment to the Civil Code, which entered into force in 2018, the rules for calculating the limitation period have changed, the end of which generally falls on the last day of the calendar year, unless the limitation period is shorter than two years.
In each of the possible forms of interruption of the limitation period, certain steps are necessary for the effectiveness of such an action.
Author: Katarzyna Kowalewska-Glegoła, Attorney-at-law PL