Debt collection and Compensation

Unenforceability of the claims for damages

A right to request fulfilment of an obligation shall come to an end if time barred by statute of limitations. Unenforceability due to the statute of limitations shall follow the expiration of the period specified by statute during which the creditor was entitled to request fulfilment of the obligation.

The court shall not consider the fact of an obligation being time barred should the debtor fail to invoke it. This means that the debtor must raise the unenforceability period’s objection in the dispute for the court to consider it. The unenforceability period’s complaint is substantive, and the court will, as soon as it accepts this objection, reject the claim by a judgment and not renounce the action because of procedural reasons.

A debtor shall not renounce unenforceability prior to the expiration of time set forth for such unenforceability. However written acknowledgment of an obligation expired due to statute of limitations shall be construed as the renouncing of unenforceability. Providing security or other kind of guarantee to cover a claim expired due to statute of limitations shall have the same effect.

According to the provisions of the Law of the Contract and Torts, changing the legal unenforceability time limit by the contract is expressly forbidden.

A longer or shorter period of unenforceability due to the statute of limitations than the one set forth by statute and a temporary suspension of running of the unenforceability period shall not be specified by way of legal transaction.

After fulfilling an expired obligation, a debtor shall not be entitled to claim restitution, even if he is ignorant of the expiry of the obligation due to the statute of limitations. In this case, the debtor cannot demand that what he gave be returned to him, even according to the rules on unlawful enrichment, because that basis exists when there is an obligation, even as a natural one.

The Law of Contract and Torts makes a difference in terms of the unenforceability time limit for claiming damages, depending on whether the committed criminal act caused the injury.

Time Limit of Unenforceability when the Loss shall not be Caused by a Criminal Offence

According to the provisions of the Article 376 of the Law of Contract and Torts a claim for damages for loss caused shall expire three years after the party sustaining injury or loss became aware of the injury and loss and of the tort-feasor. In any event, such claim shall expire five years after the occurrence of injury or loss.

A claim for damages for loss caused by violation of a contractual obligation shall expire within the time specified for unenforceability due to the statute of limitations of such obligation.

The subjective term of the unenforceability time limit begins to run from the day the injured party finds out about the damage, which in case of bodily injuries or damage to health, according to the accepted attitude in court practice, is related to the day when the treatment was completed, i.e. when the injury took final form. The courts are trying to determine the knowledge about the damage more closely for each type of damage.

If the injured party subsequently has a significant deterioration in his health due to a previous injury, then this would be a new type of damage, whereby the unenforceability time limit is running from the day of knowledge of the damage.

Time Limit of Unenforceability when the Loss shall be Caused by a Criminal Offence

According to the provisions of the Article 377 of the Law of Contract and Torts should loss be caused by a criminal offence, and a longer unenforceability time limit be prescribed for the criminal prosecution, the claim for compensation against the person liable shall expire upon the expiration of the limitation period set forth in the statute of limitations of the criminal prosecution. This deadline may be applied only when the criminal verdict has established that the damage originates from a criminal offence and not when the criminal proceedings have ended with a decision not to convict the responsible person.

If the provision of Article 377 of the Law of Contract and Torts shall be applied, the claim’s unenforceability is calculated from the day when the criminal act was committed and not from the day when the injured party found out about the damage and the person who caused the injury.

A discontinuance of unenforceability of criminal prosecution due to the statute of limitations shall also involve the discontinuance of the limitation period relating to the claim for damages. The same shall apply when the unenforceability period ceases.

Ceasing of Unenforceability Period

Ceasing of unenforceability period means circumstances that prevent ceasing at the beginning or during its occurrence, and it begins or stops to run as long as the disturbance lasts. The ceasing of the unenforceability period does not fall within the term of the unenforceability period.

According to the provisions of Articles 381., 382. and 383. of the Law of Contract and Torts the period of unenforceability due to statute of limitations shall not run:

  • between spouses
  • between parents and children during the validity of parental right
  • between a ward and his guardian, and/or a guardianship organisation in the course of the guardianship relationship, and until relevant accounts are settled
  • between two cohabitees during the course of such cohabitation
  • during mobilization, in case of imminent danger of war, or war – relating to claims of persons engaged in the military
  • concerning claims of persons employed in another person’s household, against the employer or members of his family living with him in the same household – in the course of such employment
  • for the entire time of creditor’s inability to institute legal proceedings demanding the fulfilment of obligation due to insurmountable obstacles.

Should the limitation period be blocked due to a cause specified by statute, it shall begin to run after such cause has come to an end.

Should the limitation period begin to run before the occurrence of cause blocking its further course, it shall begin to run again after such cause has come to an end, while the time expiring prior to ceasing shall be accounted for in the expiration period provided by statute.

Interruption of Limitation Period

The interruption of the limitation period occurs when the legal effect prescribed by law occurs before the end of the limitation period, which causes the time of limitation period that has elapsed before the interruption is no longer counted in the limitation period of a request.

Running of the limitation period shall be interrupted:

  1. when a debtor acknowledges the debt not only by a declaration to the creditor, but also in an indirect way, such as by an installment payment, payment of interest due, or providing security
  2. by instituting legal proceedings and by other motion of a creditor against a debtor at court or other competent agency, with the aim of confirming, guaranteeing or realizing the claim.

Desisting, Renouncing or Rejecting Legal Proceedings

Should a creditor desist from legal proceedings or other motion undertaken by him, it shall be held that there was no interruption of the limitation period by instituting legal proceedings or undertaking other motion against the debtor at the court or other competent agency, with the aim of confirming, guaranteeing or realizing the claim. It shall also be held that there was no interruption should the creditor’s action or claim be rejected or renounced, or should an obtained or undertaken measure of execution or guarantee be cancelled.

Should an action against a debtor be renounced on the ground of lack of jurisdiction of the court, or by some other reason not related to the substance of the matter, if the creditor files another action within a three month period after the final decision renouncing the action, it shall be held that the limitation period was interrupted by the first action. The same shall also apply to invoking protection and claiming offset of amounts due in a dispute, as well as in the event of the court or other agency directing the debtor to effect his claim in the litigation proceedings.

Time Limit of Unenforceability due to Statute of Limitations in Case of Interruption

After the interruption the limitation period shall start to run anew, while the time expired prior to interruption shall not be accounted for into the statutory limitation period.

If the limitation period is interrupted by debtor’s acknowledgment, it shall start to run anew from the date of such acknowledgment.

Should the limitation period be interrupted by instituting legal proceedings or invoking protection, or claiming setoff of claims in litigation, or by filing the claim within some other proceedings, the limitation period shall begin to run anew from the day of closing the litigation in a regular or some other way.

Should the limitation period be interrupted by filing a claim in bankruptcy proceedings, the expiration period shall begin to run anew from the day of closing of such proceedings. The same shall also apply should the limitation period be interrupted by a request for compulsory execution or for obtaining a guarantee.

The limitation period beginning to run anew after the interruption shall be completed on the expiration of the limitation period which was interrupted.

Should the interruption take place by the debtor’s acknowledgment of the debt and the creditor and the debtor agree to alter the ground or the subject of obligation, a new claim shall expire within the statutory limitation period.

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