The new law on the statute of limitations will enter into force on 1st January 2020 (amendment approved on 15 June 2018). The amendment introduces an extension of certain limitation periods, a new ground for suspension and new rules regarding the waiver of limitations.

A. Introduction

The statute of limitations plays an important role in our legal system; it enables the debtor to inhibit the right of action associated with a claim through the lapse of time. By raising the statute of limitations objection, the debtor can refuse to fulfil his obligation towards the creditor.

The current law has been the object of numerous criticisms, notably for its complexity and heterogeneity; it contains an astonishing diversity of points in time marking the beginning, and lengths, of limitation periods. One of the main points of criticism was that the limitation period could begin even before the injured party became aware of the damage suffered or even before the damage had manifested itself and could be objectively established. The most famous example is the damage caused by asbestos, which led to the ruling of the European Court of Human Rights of 11 March 2014 in the Howald Moor v. Switzerland case.

The amendment of 15 June 2018, which enters into force on 1st January 2020, is the result of extensive parliamentary work. The legislator has decided to extend certain limitation periods in order to address the issue of long-term damages. However, the idea of a complete harmonisation of the law on the statute of limitations has been abandoned.

B. New limitation periods

The amendment concerns the general limitation periods for non-contractual liability (Article 60 of the Swiss Code of Obligations, CO), unjust enrichment (Article 67 CO) and contractual liability (Article 128a CO, covering cases of death or injury of persons). However, the commencement of the limitation period is not affected by the amendment. It merely clarifies that in case of damaging conduct, limitation periods not only begin when the damaging conduct occurs, but also when it ceases. The recently extended limitation periods for the warranty for defects in purchase contracts and contracts for work and services (Articles 210 and 371 CO) have not been modified (amendment approved on 16 March 2012, in force since 1st January 2013).

The amendment prolongs the absolute limitation period for claims for damages or satisfaction in the event of death of a person or personal injury to twenty years (instead of the previous ten) starting from the date on which the harmful event occurred or ceased. For property damage, the ten-year limitation period remains in force. The relative period of one year for non-contractual liability will be prolonged to three years and will begin when the injured party becomes aware of the damage and of the person liable to pay compensation.

In the interest of harmonisation, the legislator has also prolonged the relative limitation period for unjust enrichment to three years. In addition, a relative limitation period of three years has been introduced for contractual liability in the event of death of a person or personal injury, which is an exotic exception in the field of contracts. This novelty is unfortunate for victims who are not affected by long-term damage (i.e. where the damage occurs before the expiry of the ordinary ten-year period), as the limitation period for their contractual claims is drastically reduced, while the contractual liability for property damage is still limited to ten years (Article 127 CO).

It should also be noted that the limitation period for revocatory actions under the Debt Enforcement and Bankruptcy Act (DEBA) has been prolonged from two to three years (Article 292 I DEBA).

C. The suspension of the limitation period

Article 134 CO contains an exhaustive catalogue of reasons for the inhibition and suspension of the limitation period. Pursuant to this provision, if any of these reasons applies, the limitation period does not commence and, if it has commenced, is suspended. With the revision of the statute of limitations, Article 134 CO has introduced a new clause No. 8 which stipulates that the limitation period shall not commence or be suspended during settlement negotiations, mediation proceedings or other out-of-court dispute resolution procedures if the parties have agreed to this in writing. According to the official explanations ("Message", "Botschaft") by the Federal Council (government), the list of reasons of suspension is not exhaustive, but must be understood broadly and must encompass all extrajudicial methods of dispute resolution, both formal and informal and even direct discussions between the parties without resorting to a third party. However, the parties must agree to the suspension in writing within the meaning of Article 13 CO. This agreement, which – in contrast to the unilateral declaration of the waiver of limitation – must be signed by both parties, should specify the exact dates of the suspension of limitation and should clearly state the claim or at least the legal relationships concerned. If the out-of-court settlement negotiations are terminated prematurely, the wording of the agreement is no longer relevant; in this case, the date of termination of the negotiations and not the date specified in the agreement is decisive for the commencement or the continuation of the limitation period.

Although it is a positive development that the legislator intends to promote settlement negotiations by giving the parties the option of suspending the limitation period by mutual agreement, it is questionable to what extent the suspension of limitation will distinguish itself in terms of usefulness from the waiver of limitation (see E. below). In case of doubt, it is advisable, in light of the above-mentioned issues and in particular if the limitation period is about to expire in the near future and if the creditor has made the necessary preparations, to hand the creditor a formal waiver (see D. below).

D. Interruption of a limitation period

Regarding the interruption of the limitation period, the rules of Article 135 CO remain unchanged. The creditor may interrupt the limitation period notably by initiating debt collection and by submitting a request for conciliation (No. 2). The debtor may also interrupt the limitation period (No. 1). However, the amendment concerns the effects of the interruption on joint debtors (Article 136 CO). This provision specifies that the limitation period is only interrupted against a debtor who is jointly and severally liable and joint debtors if the interruption is attributable to an act of the creditor, which was disputed in literature until now. According to the new clause No. 4, the interruption of the limitation period against the insurer is also effective against the debtor and vice versa if there is a direct right of claim against the insurer. This rule, which already existed in various special laws, now applies to the entire field of civil liability law.

E. Waiver of limitation period

The waiver of the limitation period is highly relevant in practice. The debtor's unilateral waiver to raise the statute of limitations objection can prevent an interruption of the limitation period due to a request for conciliation, an action or the service of a payment order (Article 135 II CO). This allows the parties to engage in settlement negotiations in peace without the creditor having to take any "hostile" action beforehand. In the amended Article 141 CO, the legislator intended to codify the jurisprudence in the matter of waiver of the limitation period, whereby more or less fortunate clarifications were introduced. According to the consistent jurisprudence of the Swiss Federal Supreme Court, such a waiver delays the expiration of the limitation period, i.e. has the effect that the course of the limitation period is suspended during the agreed period, or that the limitation period is prolonged, respectively. The Federal Supreme Court will likely uphold this jurisprudence under the regime of the new law.

Regarding the moment from which a waiver of the limitation period is possible, the Swiss Federal Supreme Court held in 2006 that it is not possible to waive the limitation period already at the time of conclusion of the contract. In contrast, the new law provides that a waiver is only possible from the commencement of the limitation period, which is different and such point in time potentially more difficult to determine.

In accordance with the practice of the Swiss Federal Supreme Court, the objection of limitation may be waived for a maximum period of 10 years. This maximum duration relates only to the respective waiver and does not preclude renewed waivers for further periods of no more than 10 years.

With regard to the form of the waiver, no provisions were to be complied with under the previous law. The waiver must now be made in writing within the meaning of Article 13 CO and, accordingly, must bear the signature of the waiving party. A waiver made by e-mail therefore only meets these requirements if it bears a qualified electronic signature.

F. Contractual amendment of limitation periods

Modifications of the statutory limitation periods by agreement are frequently seen, especially in construction law. For example, the duration of the limitation periods (shortening or extension) or the provisions on the commencement of the limitation period are amended. Pursuant to Article 129 CO, the limitation periods in title III of the Swiss Code of Obligations (Articles 114-142 CO) may not be amended by agreement. E contrario, the limitation periods in the other parts of the Swiss Code of Obligations may be amended freely. For example, the parties often agree upon differing warranty periods for defects in the area of construction law. The ordinary limitation period of five years for defects in immovable work (Article 371 II CO) or movable work integrated into an immovable work (Article 371 I CO) can thus be reduced, provided that this does not lead to unjustified disadvantages for the creditor (especially in relation to hidden defects). However, the limitation period may also be extended, for example for certain parts of a construction. However, an extension beyond ten years (Article 127 CO) is not permissible according to jurisprudence. With regards to the commencement of a limitation period – which, for defects, begins with the delivery of the work (Article 371 II CO) – the parties may, for example in case of split deliveries, agree on a uniform date for the commencement of the limitation period in order to avoid the inconveniences of split limitation periods.

G. Transitional provisions

The transitional law is contained in the new Article 49 of the final title of the Swiss Civil Code. According to this article, the new law is applicable from 1st January 2020 if it provides for longer limitation periods. Inversely, regarding the principle of non-retroactivity, the new law does not affect limitation periods that have already expired, whether they are qualified as relative, absolute or ordinary.

Moreover, the limitation period is governed by the new law as soon as it enters into force. Specifically, this concerns the new reasons for suspension (Article 134 CO), the effects of the interruption (Article 136 CO), the waiver of the limitation period (Article 141 CO) and the transitional provisions. The principle of non-retroactivity means that waivers which have been validly made under the previous law remain valid under the new law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.