Monday, August 6, 2018

Extending the Statutes of Limitations or Time Bars in Common Law Jurisdictions and Under Omani Law

Statutes of limitations are laws passed to set the maximum time after an event within which legal proceedings may be initiated.  Often times this is when parties know or should have known damage was suffered.  Statutes of limitations are in place to protect persons against claims made after disputes have become old, evidence has been lost, memories have faded, or witnesses have disappeared.  Once the time limit to bring a claim has passed, the claim is “time barred.”

Various claims and civil actions have different statutes of limitations.  By way of example, under New York law various statutes of limitations periods are outlined in the New York Civil Practice Law and Rules.  In England, the statute of limitations for civil claims is governed the Limitations Act 1980.

There are generally a very limited number of circumstances in which a statute of limitations may be extended.  For example, under New York law, a statute of limitations can be tolled if a person is outside of the state or living under a false name; if the person is a minor or insane (capacity); due to war; or, in some circumstances, the agreement of the parties.  English law follows a similar approach. It should be noted that under both New York and English law, limitation periods (typically in construction contracts) may be shortened.

If a statute of limitations is tolled, the practical effect is that a party may commence a claim when they otherwise would be time barred.  If a statute of limitations period is shortened, which generally takes place in construction contracts where a defects liability period is applicable, a party may have a considerably shorter time to file a claim.

In Oman, time bars take the form of statutory rules that restrict the period of time within which a legal action can be brought successfully, and therefore restrict the rights of the disputing parties to bring legal proceedings to recover losses or obtain compensation.  There are various time bar rules set out in Omani legislation, and they vary depending on the subject matter of the dispute.
While there is no provision under Omani law for the extension of time bars, a legal claim that is brought by a plaintiff past the limitation period does not automatically fail.  The existence of a time bar to the claim (generally, where the claim is brought outside the set limitation period) must be raised by the defendant as a legal, or procedural, defence.  If the defence is successful, the plaintiff’s claim will not be heard in the courts.

When representing a client in a commercial dispute, it is fundamental to consider first whether there is any applicable time bar.  Before a plaintiff makes a decision on whether or not to bring a legal action in the courts, he should be informed by his lawyer whether the claim is time barred.  Conversely, the defendant’s attorney should consider whether or not the claim is time barred and raise this as a legal defence in the court before addressing the subject matter of the case.  Thus, ascertaining the existence of a time bar to a legal claim can potentially shorten the legal proceedings and help the parties to the dispute save time and legal costs.

Determining the existence of a time bar at the beginning of the legal dispute is also of strategic importance.  As a matter of procedure, the time bar must be raised as a legal defence at the beginning of the proceedings at the Court of First Instance.  If a defendant fails to invoke this defence in the Court of First Instance, he will not be able to do so in proceedings at the Court of Appeal or the Supreme Court.

Overall, there are a number of different time bars in Omani legislation and the relevant time bar provisions should be considered by each party to a commercial dispute at the beginning of the dispute and, if relevant, raised as a defence at the beginning of the legal proceedings.  If this is done then it will provide a good defence against the action.  However, if the defendant’s lawyer does not do so at the appropriate time, the court will nevertheless hear the case, even though it is outside the time limits.