Nova Scotia’s new Limitation of Actions Act has been awaiting Proclamation since it received Royal Assent on November 20, 2014. The Government of Nova Scotia announced this week that the new Act will be proclaimed and come into effect on September 1, 2015. This will significantly change the civil litigation landscape in this province.
A limitation period is the period of time between the date of a person’s injury, loss, or damage and the date after which he or she can no longer bring a claim. The Act defines “claim” as an action filed with either the Nova Scotia Supreme Court or Small Claims Court (depending on which court is appropriate) that seeks a remedy against the person who allegedly caused the injury, loss, or damage. If the claim is brought after the limitation period, it is said to be “statue-barred”.
2-Year “Basic” and 15-Year “Ultimate” Limitation Periods
Two of the key changes in the new Act are the introduction of a single, 2-year basic limitation period for all civil claims, and a 15-year “ultimate” limitation period. The ultimate limitation period means a person has 15 years from the act or omission date to discover his or her claim and, within the basic limitation period, start a civil action.
The new limitation periods apply no matter what the cause of action is. Under the old Act, different causes of action had different limitation periods. As common examples, the actions for personal injury arising from a motor vehicle accident had to be brought within three years, while actions for general negligence, such as a slip and fall, had to be brought within six years. Now the basic limitation period for both types of claims is 2 years.
The limitation periods set out in the Act apply in the absence of any other legislation that limits the period of time within which a claim can be made. For example, the Fatal Injuries Act and the Builders’ Lien Act include specific limitation periods that take precedence over the limitation periods in the Limitation of Actions Act.
The Act carves out an exception for claims of battery, assault, and sexual misconduct, as well as for claims against persons with whom the claimant was in an intimate or dependent relationship. Those now have no limitation period.
As with the previous Act, limitation periods in Nova Scotia do not run when a person does not have the capacity to bring a claim. Examples include minors (persons under the age of 19 in Nova Scotia) and persons incapacitated by a physical, mental, or psychological disability. The limitation period starts when a person reaches the age of majority or regains capacity, unless a litigation guardian starts the claim on his or her behalf.
“Safeguard” Provision Remains
The new Act retains a safeguard for personal injury claims where a plaintiff commences an action up to 2 years after the 2-year limitation period expires. Upon the plaintiff’s motion, a Court can disallow a limitation defence on equitable grounds. In other words, the Court may allow the action even though the limitation period has expired.
The test for disallowing a limitations defence has changed somewhat from the old Act. The new test is whether any of the parties to the action have suffered a “hardship”.
Previously, parties to an action had up to four years after the limitation period expired to bring a claim, and the Court could disallow the limitations defence if any of the defendants could demonstrate “prejudice” by having to defend the action when it was expired. Only time will tell how the Court will apply the new test.
In our opinion, the new test is likely to be more favourable to insurers. The Courts have often acknowledged that defending untimely claims cause hardship, in the sense that witnesses may be difficult to locate and memories may have faded. Nevertheless, the cases often found no “prejudice”, as insurers often had notice of the potential claims and thus, the opportunity to investigate and gather documentation.
The new statutory language appears to recognize the additional complexity in defending claims where witnesses may have relocated and the significant practical considerations that apply when compelling their attendance at trial in Nova Scotia.
It is noted that the safeguard provision only applies to the basic 2-year limitation period. The 15-year “ultimate” limitation period cannot be extended.
The new Act contains transition provisions for new claims. The limitation period for claims discovered before the new Act comes into effect is the earlier of:
- the expiration of the old limitation period; or
- 2 years from the proclamation.
There are other subtle changes within the new Limitation of Actions Act, and we are available to discuss these whenever you require.
Please contact us directly with any questions or concerns.