Statutes of Repose Can Create Risk
Statutes of repose do not come up in every type of legal matter, but can create real risk for litigators.
November 06, 2018 at 05:22 PM
5 minute read
Many litigators are familiar with statutes of limitation and will attempt to ensure that any new action filed by or against their client is compliant with the statute of limitation. Indeed, if an attorney blows a statute of limitation, they might expect to receive criticism or even a claim from a disappointed client.
Some litigators, however, are less familiar with statutes of repose. Statutes of repose do not come up in every type of legal matter, but can create real risk for litigators. A statute of repose is in effect a statute of limitations on steroids.
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 impact.
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 that 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 the areas of products liability, construction defect or medical malpractice.
|What's the Difference?
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 generally not subject to interpretation but is intended “clearly to serve as a cut off,” as in 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.
|Does a Statute of Repose Apply?
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, Texas Civil Practice & Remedies Code § 16.003 says a claim for personal injury expires two years after that injury is suffered. That is the statute of limitation. However, per § 16.012, if the plaintiff's personal injury was caused by a product, the plaintiff has 15 years from the date of the sale of the product to sue for that personal injury. That is the statute of repose. Thus, a claim could be timely under the statute of limitation if brought within two years of injury, but ultimately untimely if the claim was brought more than 15 years after the date of purchase.
Similarly, medical malpractice claims are generally subject to a two-year statute of limitation but a 10-year statute of repose. (See Civil Practice & Remedies Code § 74.251 (“This subsection is intended as a statute of repose so that all claims must be brought within 10 years or they are time barred”).) In contrast, Texas has not yet enacted a statute of repose for legal malpractice claims, but the analysis can be complex. Specifically, Texas law provides that a legal malpractice claim must be commenced within two years after the client suffers legal injury (i.e., when the attorney takes the faulty advice). However, such a claim can be tolled by the discovery rule, by fraudulent concealment, or while the litigation in which the error was committed is ongoing (generally not applicable to transactional matters involving allegations of malpractice).
Statutes of repose, however, are generally not subject to equitable tolling.
Overlooking a statute of repose can lead to severe consequences, and could even give grounds for a future legal malpractice claim.
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 and is co-chair of the firm's global insurance sector team. Alanna 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.”
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