Statutes of limitations
Limitation rules
Civil proceedings are not subject to any general procedural limitation rules. Special procedural limitation rules are lset out in certain Norwegian statutes, such as the Taxation Act and the Public Limited Companies Act. Moreover, important limitation rules on monetary claims are set out in the Limitation Act.
Monetary claims, including claims for damages that have a contractual basis, are subject to a three-year limitation period. The limitation period runs from the date on which the creditor/claimant first had the right to demand performance. For claims based on breach of contract, the limitation period starts on the day on which the breach occurred. This start date may vary, depending on the nature of the dispute and when the effects of the breach of contract occurred. As an example, the three-year limitation period for claims due to defects starts to run from the time of delivery for the purchase of goods and on the takeover date for construction projects.
If the creditor has not pursued the claim because the creditor lacked the necessary knowledge of the claim (or the necessary knowledge of the debtor), the limitation period may be extended. If the conditions for extending the limitation period are fulfilled, the limitation period will expire, at the earliest, one year after the date on which the creditor obtained, or ought to have obtained, the necessary knowledge of the claim or the debtor. The limitation period cannot be extended on such grounds by more than 10 years (i.e. a total of 13 years).
Claims for damages which do not have a contractual basis are subject to a limitation period of 3 years from the date on which the injured party obtained, or ought to have obtained, the necessary knowledge of the damage and of the tortfeasor – up to a maximum of 20 years from the date on which the damage was caused.
Interruption of limitation periods
Limitation periods may be interrupted in various ways:
1
First, a limitation period is interrupted when the debtor has expressly, by words or conduct, acknowledged the debt to the creditor, for example by promising to pay or by paying interest.
2
Second, a limitation period is interrupted when the creditor commences legal proceedings against the debtor in order to obtain a court judgment, arbitral award, judicial appraisal or similar ruling. This is the normal way of interrupting time-bar. It is highly important to note that sending a formal claims letter, and the like, is not sufficient, as in some other jurisdictions. In most cases, legal proceedings must be commenced.
3
Third, the limitation period may be interrupted by bringing the claim before a public administrative body with specific powers to determine such a claim, or to bring the claim before a complaints body established by, or with the assistance of, the debtor or a trade association to which the debtor belongs.
4
Fourth, if the creditor has a legal basis for enforcement of the creditor's claim, the limitation period is interrupted by instituting enforcement proceedings (distraint or full coverage).
5
Last, the creditor will interrupt the limitation period by petitioning for bankruptcy proceedings or probate estate settlement. If the debtor's estate is entered into receivership or subjected to judicial debt composition or probate settlement, the limitation period in respect of all claims notified by the expiry of the notification time limit is interrupted by such notice.
If the creditor has taken legal steps or brought the claim before a public administrative body in a timely manner against any one of multiple debtors, the claim shall be regarded as having been pursued in a timely manner against the other debtors if, prior to the expiry of the limitation period, the creditor has given them due notice of the institution of proceedings in the manner prescribed in the Dispute Act and subsequently pursues the claim against the person concerned within one year of the case being resolved by amicable settlement, judgment or otherwise.
Limitation effects
The main consequence of failing to observe a limitation period is that the creditor forfeits its right to performance of the claim. The limitation of a claim also covers any interest, dividends or similar ancillary performance.
The limitation of a claim does not result in the creditor forfeiting its right to invoke said claim as a counterclaim, provided that:
- such right has been agreed; or
- the claim against which the counterclaim is invoked derives from the same legal context as the statute-barred claim and arose before said claim becoming statute-barred.
The Limitation Act also contains specific rules on the lapsing of mortgages, which will apply when a claim is statute-barred.
