Even for seasoned litigators, a “statute of repose” may be a foreign concept. Not only does it sound somewhat archaic, but 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 non-attorneys.

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 is a big deal.

Moreover, attorneys may be surprised to learn that jurisdictions have statutes of repose in place with respect to many common types of claims. In California, this includes certain types of construction defect claims. Other states have statutes of repose for legal malpractice 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.

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, California courts have noted that a statute of repose “is not dependent upon traditional concepts of accrual of a claim, but is tied to an independent, objectively determined and verifiable event,” as in Inco Development v. Superior Court, 131 Cal. App. 4th 1014, 1020, 31 Cal. Rptr. 3d 872, 875 (2005). 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 products liability claims. Other states, including Michigan, Tennessee and Illinois, have expanded statutes of repose to legal malpractice claims.

For example, California has a 10-year statute of repose applicable to latent construction defect claims. (See California Code of Civil Procedure Section 337.15.0 The statute of repose begins to run upon “substantial completion of the development or improvement” and applies to certain specified latent deficiencies as well as injuries to real or personal property arising out of those deficiencies.

In contrast to construction defect claims, California has not yet enacted a statute of repose for legal malpractice claims, but the analysis can be complex. Specifically, California law provides that a legal malpractice claim must be commenced within one year after the potential plaintiff discovers or should have discovered the wrongful act or omission by the attorney. However, California law further provides that a claim is barred if, prior to the expiration of the one-year statute of limitations following discovery of the wrongful act, four years passes from the date of the wrongful act. (See California Code of Civil Procedure Section 340.6.)

Crucially, the four-year period can be subject to tolling. For example, pursuant to continuous representation tolling, the four-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. For example, California courts have specifically held that the 10-year statute of repose applicable to construction defect claims is not subject to equitable tolling. (See Lantzy v. Centex Homes, 31 Cal. 4th 363, 368, 73 P.3d 517, 522 (2003), as modified (Aug. 27, 2003).) Instead, the only exceptions to application of the statute of repose as set forth in Section 337.15 are for “actions based on willful misconduct or fraudulent concealment” (Cal. Civ. Proc. Code § 337.15). Other statutes of repose may not even have such exceptions.

Thus, any time there has been a significant passage of time prior to the filing of a lawsuit, attorneys are well-served to check if a statute of repose might apply. Overlooking a statute of repose can lead to severe consequences, including either a lost claim or a lost defense.

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-chair of Dentons' global insurance sector team, and is co-author of “California Legal Malpractice Law” (2014). 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.”