The law states that a creditor cannot wait indefinitely before making a claim. After some time a claim becomes time-barred and a creditor is too late. At the end of last year, the Supreme Court in a ruling on prescription in the case of the professional liability of a fiscal consultant clarified when the limitation period in the Netherlands starts and until what time the creditor has to take action. Our attorneys in the Netherlands discuss the periods of limitation in this blog.
EFFECTS OF PRESCRIPTION IN THE NETHERLANDS
The consequences of prescription are far-reaching and irreversible. After a claim has become time-barred, it is no longer possible for a creditor to claim performance from the court. If the judge accedes to the claim, he will not be able to judge the content of the case. The judge will also not arbitrate whether it is fair or reasonable that the debtor does not have to comply or pay. In this situation, the judge will reject the claim and order the creditor to pay the costs of the proceedings.
COMMENCEMENT OF THE LIMITATION PERIOD IN HOLLAND
In order to know until when you have time to take action, you need to know when the limitation period in the Netherlands starts and which period applies. The law makes a distinction between different situations. In practice, the (short) limitation periods of five years for a claim for performance under a contract and a claim for compensation for damages are of particular importance. The limitation period for a claim for performance starts on the day after the claim has become due and payable. This is usually the due date of an invoice.
In the case of a claim for compensation of damage, the moment that the creditor becomes aware of both the damage and the person liable is decisive for setting the commencement of the limitation period in the Netherlands. This was the purpose of the aforementioned judgment of the Supreme Court, in which it was determined that the creditor’s awareness only exists when the creditor has had the opportunity to assess the soundness of the delivered performance. Therefore, the prescription of the claim in this case on the tax consultant only started when the creditor became aware that mistakes had been made in the advice.
INTERRUPTION OF THE LIMITATION PERIOD UNDER DUTCH LAW
It is not always necessary to go to court directly to prevent the prescription of a claim under Dutch law. An acknowledgement from the debtor, a clear warning, or notification that the rights to performance are reserved will interrupt the limitation period and start a new period. This period is usually as long as the original limitation period and therefore gives time to properly substantiate the claim, write to the debtor and, if necessary, present a well-prepared claim to the court.
Absolute limitation period in the Netherlands
Incidentally, not all limitation periods can be interrupted. For most claims arising from contracts or for compensation of damages there is an absolute limitation period of twenty years. This period commences on the day after the claim arose or the damage was caused and makes the limitation period of a claim a fait accompli.
Lawyer in the Netherlands specialising in limitation
Do you have a question about the limitation period of a claim, or do you want to know how to interrupt or prevent it? Please contact Remko Roosjen or Jacco Bruinsma, a lawyer specialised in limitation actions. Together with you we will look at the steps you can take to benefit from the effects of prescription or to prevent your claim from becoming time-barred.