New statute of limitations

The motivation for the revision of the statute of limitations was the unsatisfactory situation in connection with asbestos victims and the general European criticism regarding the short statutes of limitations in Switzerland. After more than a decade of discussions and negotiations, the new statute of limitation came into effect on 1 January 2020. This law contains significant practical changes, particularly with regard to limitation periods, suspension and interruption of the limitation period and the waiver of the defence of limitation. In the following we provide an overview of the most important changes.

Limitation period with regard to contractual claims

According to Art. 127 CO, contractual claims become time-barred after 10 years, unless federal civil law provides otherwise. This principle remains unchanged. The five-year limitation period for claims listed in Art. 128 OR ( e.g. for rent, lease and capital interest as well other periodic payments;  and claims in connection with employment relationship,) remains unchanged.

The new Art. 128a CO provides that claims for damages or satisfaction arising from physical injury or death of a person due to breach of contract shall become time-barred after three years from the date on which the injured party became aware of the damage or, at the latest, after the expiration of twenty years from the date on which the harmful conduct occurred or ceased. The three-year limitation period is a relative one, and the twenty-year period is the absolute limitation period. Thus, for the first time, a relative limitation period was introduced in relation to contractual liability and the absolute period in the case of personal injury was doubled. With this innovation, the absolute limitation period is significantly longer, but the person concerned must react more quickly than before.

Limitation period with regard to claims in tort

The relative limitation period for liability in tort has been increased from the previous one year to three years from the date of knowledge of the damage and the person responsible.

For claims in tort, the legislator provides for the analogous statute of limitations as in Art. 128a CO in the case of death of a person or physical injury.. The periods of limitation beginn on the day on which the damaging conduct occurred or ceased.

If the damaging behaviour is to be qualified as a criminal, the claim for damages or satisfaction shall become statute-barred at the earliest when the criminal prosecution period begins. If the criminal law limitation of prosecution no longer applies as a result of a first-instance criminal judgment, the claim shall become statute-barred at the earliest three years after the opening of the judgment.Heading

Limitation period with regard to claims from unjust enrichment

Contrary to the amendments relating to the limitation periods for contractual liability and liability in tort for personal injury, the previous limitation period for liability for unjust enrichment remains unchanged at ten years.

However, the relative period has also been increased from one to three years and begins from the moment the claimant becomes aware of the claim.

Further changes to the law of limitation

Suspension of the period of limitation and standstill

For the parties, the revision of the law on limitation periods has brought another interesting novelty with regard to the suspension of the period of limitation. According to the new paragraph 8 in Art. 134 para. 1 CO, the limitation period does not start or stands still during settlement discussions, mediation proceedings or other procedures for the out-of-court settlement of disputes, provided the parties agree to this in writing (an exchange of e-mails is not sufficient).

The limitation period does not begin and stands still (if already begun) as long as a claim cannot be asserted before any domestic or foreign court for objective reasons. Until now, this has been the case as long as the claim could not be asserted before a Swiss court. In this respect, it must now also be impossible to assert the claim in a foreign court.

The legislator shifted the previous suspension of the period of limitation of the claims and liabilities of the inheritance during the preparation of the inventory to the General Part of the Code of Obligations.

Effect of the interruption of the limitation period between co-obligated persons

An action interrupting the period of limitation causes a new period of limitation of the same duration. With the revision, the legislator has clarified the interruption of the limitation period against a joint and several debtor or the co-debtor of an indivisible obligation and has established that the interruption also has an effect against the other co-debtors if it is based on an act of the creditor. On the other hand, promissory letter of a joint and several debtor does not lead to an interruption of the limitation period with respect to all other joint and several debtors. Art. 136 para. 1 CO specifies that an interruption of the period of limitation against the principal debtor also applies to the guarantor, provided that the interruption is based on an act of the creditor.

It is now clearly stated that the interruption of the limitation period against an insurer also applies to the debtor and vice versa, provided that a direct claim exists against the insurer.

Limitation of recovery claims

Art. 139 CO now stipulates a relative limitation period of three years for the recovery claim of a jointly and severally liable debtor. It begins on the day on which the debtor has fulfilled his obligations to the creditor and knows the co-debtor.

Waiver of plea of limitation

A debtor may waive the right to raise a plea of limitation from the beginning of the limitation period and for a maximum of ten years in each case. Before the expiration of this maximum ten-year period, a further waiver for a further maximum of ten years may be made. According to the new wording of Art. 141, para. 1 CO, the previously customary waiver of the defence of limitation can no longer be submitted before the start of the limitation period respectively before the beginning of the limitation period. For this reason, according to the new legislation, when submitting waivers of a defence of limitation, it must be carefully examined when the limitation period begins. Accordingly, the waiver of the limitation plea in the General Terms and Conditions (GTC) is only applicable to claims due immediately after conclusion of the contract. However, the changes in the law leave open from when and how the waiver of the limitation plea takes effect. Due to these ambiguities, it is recommended to clearly state the beginning, duration and effect of the waiver in the declaration.

In addition, pursuant to the new paragraph 1bis, the waiver must be in writing. It is also important to note that in general terms and conditions, only the user of the general terms and conditions can waive the statute of limitations. Thus, a customer cannot waive the defence of limitation by simply accepting general terms and conditions.

Meanwhile, a new paragraph 4 has been added to Art. 141 CO, which, analogous to the interruption of the period of limitation, stipulates for the waiver of the defence of limitation that the waiver by the debtor can be invoked against the insurer and vice versa, provided that a direct right of claim against the insurer exists.

Limitation period with regard to liability actions

The provisions in the special part of the Code of Obligations concerning actions for liability against directors and officers of a joint-stock company and cooperative as well as in the area of recourse claims against members of cooperatives have also undergone some minor changes.

The duration of the limitation periods for liability actions, both in relative (five years from the date of knowledge of the damage and the party liable to pay compensation) and absolute (ten years) terms, remained unchanged. However, it has been clarified that the absolute period is calculated from the day on which the harmful conduct occurred or ceased. This was specified in both Art. 760 para. 1 CO and Art. 919 para. 1 CO.

If, however, the person liable to pay compensation has committed a criminal offence as a result of his or her damaging behaviour, the claim for compensation becomes time-barred at the earliest when the criminal prosecution period begins. If the limitation period for prosecution no longer applies as a result of a first-instance criminal judgment, the claim for damages shall become statute-barred at the earliest three years after the opening of the judgment. This is stipulated in Articles 760 para. 2 and 919 para. 2 CO respectively for the law of the stock corporation and the cooperative society.

However, Art. 878 para. 2 CO now states for the law of cooperatives that recourse by the members of the cooperative among themselves is now statute-barred after three years from the date of payment for which it is asserted. Previously, the statutory limitation period was one year.

Changes to the limitation period in debt enforcement and bankruptcy law

The limitation period for actions for rescission in debt enforcement and bankruptcy law will be increased from two to three years and Art. 292 SchKG will be amended accordingly.

Transitional law

According to the new Art. 49 SchlT CC, the new period of limitation is applicable to a running period of limitation, provided that the limitation period under the previous law did not expire before 31. December 2019. Conversely, a shortened limitation period does not apply, which means that the law previously in force remains applicable.

Unless otherwise provided by law, however, the beginning of the limitation period shall remain unaffected, whereby the new law shall apply to the limitation period from the date of its entry into force, i.e. from 1 January 2020.

The transition from the previous to the new limitation rules may cause difficulties only in the case of contractual claims for physical injury or death of a person. The three-year relative period from the date of knowledge of the damage may already have expired at the time of entry into force of the new provisions, which would put the injured party in a worse position with the new provisions than before. This was precisely not the intention of the legislator, which is why corresponding claims should be asserted within the ten-year limitation period as security. The first judgments will show whether the courts will follow this view or whether they will at best still apply the 10-year limitation period of the previous regulation.