Most litigators know to check the “statute of limitation” as an early step in any litigation. However, even seasoned litigators may be less familiar with a “statute of repose.” It sounds like antiquated common law, but a statute of repose can have a significant impact on litigation. Outside certain practice areas it may not be an issue that comes up on a regular basis. This is certainly true when compared to a statute of limitation, which is a concept that may be familiar to even nonattorneys.
A statute of repose is like a bulked-up statute of limitations. While there can be many defenses that can be asserted in response to an alleged failure to comply with the applicable statute of limitation, there are typically very few defenses to a failure to comply with the statute of repose. Thus, where it applies, the statute of repose can have a significant and lasting impact.
Moreover, attorneys may be surprised to learn that jurisdictions have statutes of repose in place with respect to many common types of claims.
Thus, it can be helpful to understand when a statute of repose might apply and to not confuse it with a statute of limitations. Indeed, an attorney who fails to file a lawsuit within the statute of repose may have a rude awakening once she realizes that the arguments for tolling the statute of limitations are less effective against the statute of repose. Conversely, waiving the application of the statute of repose by failing to assert it as an affirmative defense might result in the loss of a strong defense. In either situation, the error could be readily identifiable if or when the client brings a later claim for legal malpractice against the attorney.
Depending on the jurisdiction, the difference between a statute of repose and a statute of limitation may be especially important for attorneys who practice in specific areas, as described below.
Know the Difference Between Statutes of Limitations and Repose
The purpose of a statute of limitation is generally to limit the time period during which a plaintiff can file a lawsuit after suffering harm. Unless the time limitation is waived or tolled, a plaintiff’s failure to initiate a legal action within that period usually forever forecloses the right to bring that claim. While statutes of limitation often vary based on the nature of the claim, they all are intended to prevent potential plaintiffs from sitting on their legal rights and to afford potential defendants relief from uncertainty.
A statute of repose also limits a plaintiff’s ability to file a lawsuit. In contrast to a statute of limitation, a statute of repose generally serves as an absolute bar to a potential plaintiff’s right of action and effectively prevents a cause of action from ever accruing. More specifically, statutes of repose set clear deadlines for pursuing a legal action based on the passage of time or the occurrence of an event that does not itself cause harm or give rise to a potential lawsuit.
Indeed, courts have noted that a statute of repose is not subject to interpretation but is intended “clearly to serve as a cut off.” Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 362 (1991). Thus, the traditional concepts used to determine the application of the statute of limitations may not have any bearing on the application of a statute of repose.
Determine Whether a Statute of Repose Applies
Many states, including California, have enacted limited statutes of repose for certain types of claims, such as construction defect or product liability claims. Other states, including Michigan, Tennessee and Illinois, have expanded statutes of repose to legal malpractice claims.
For example, Connecticut’s statute on securities fraud claims provides that a claim must be brought within two years of “the date when the misrepresentation or fraud is discovered or in the exercise of reasonable care should have been discovered.” Connecticut General Statutes §36b-29(f). That is the statute of limitation. But the statute goes on to provide that “no such action may be brought more than five years from the date of such misrepresentation or fraud.” That is the statute of repose. Connecticut also recognizes statutes of repose for other types of claims, such as construction defect claims.
In contrast to securities fraud claims, Connecticut has not yet enacted a statute of repose for legal malpractice claims, but the analysis can be complex. (Notably, although legal malpractice claims are generally subject to the three-year statute governing torts, §52-577, there is a statute of repose for other types of malpractice claims, per §52-584 of the Connecticut General Statutes.) Specifically, Connecticut law provides that a legal malpractice claim must generally be commenced within three years after the potential plaintiff discovers or should have discovered the wrongful act or omission by the attorney. However, Connecticut law may also provide that the time period could be subject to tolling. For example, pursuant to continuous representation tolling, the three-year period typically may not run so long as the attorney continues to represent the client with respect to the matter in connection with which the wrongful act was committed.
By contrast, equitable tolling is typically unavailable for statutes of repose. See Miller v. Field, 1997 WL 693020, at *4 n.4 (Conn. Super. 1997) (the securities fraud statute’s “five year limitations period is an outside period of repose inconsistent with tolling”).
Failing to appreciate the significance of a statute of repose can lead to severe consequences, including a forfeited claim or defense. Thus, whenever there has been a significant passage of time before the filing of a lawsuit, attorneys are well-served to check if a statute of repose might apply.
Shari L. Klevens is a partner at Dentons and serves on the firm’s U.S. board of directors. She represents and advises lawyers and insurers on complex claims, is co-chairwoman of Dentons’ global insurance sector team and is co-author of “California Legal Malpractice Law” (2014).
Alanna G. Clair is a partner at the firm and focuses on professional liability defense. Klevens and Clair are co-authors of “The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance.”