N E W S L E T T E R

November 2010

Limitation of Actions Law, Chapter 15 of the Laws of Cyprus (the “Law”)

What Limitation of Actions means

The term Limitation of Action means aperiod after which a cause of action is limited or prohibited from being brought before a court for enforcement.Limitation periods provide a time limit for the bringing of legal proceedings. They should not be seen as arbitrary cut-off points unrelated to the demands of justice or the general welfare of society. They represent the legislature`s judgment that the welfare of society is best served by causes of action being litigated within a limited time, notwithstanding that their enforcement may result in good cause of action being defeated. The principal problem relating to this principle is that it may deprive a claimant from the right to a fair trial.

Generally it is accepted that a workable limitation system needs to provide fairness to both plaintiffs and defendants. Plaintiffs need sufficient time to appreciate that they have a claim, to investigate their claim and to commence proceedings. In some cases plaintiffs may be under a disability that prevents prompt action. In other cases, the detection of a disease or injury may not be possible until many years after the date of the event that caused it. A limitation system must be sufficiently flexible to cope fairly, not only with latent damage that is suffered immediately or shortly after the occurrence of a wrongful act, but with latent damage that can only be detected years after the relevant event.

In Cyprus, the matter of limitation of actions is governed by the Limitation of Actions Law, Chapter 15 of the Laws of Cyprus (the “Law”). Under the provisions of the Law, no action shall be brought upon,in respect of:

Any bond in customary form or any mortgage, after the expiration of 15 years from the date on which the cause of action accrued.

Any claim to the estate of a deceased person or to any share or interest therein, whether under a will or on intestacy, after the expiration of 12 years from the date when the claim to the estate or the right to receive the share or interest therein accrued.

Any book debt due to or from a bank, after the expiration of 6 years from the date on which the cause of action accrued.

Any remuneration, fee or charge of any advocate, medical practitioner, dentist, midwife or teacher, after the expiration of 3 years from the date on which the cause of action accrued.

Any goods sold and delivered, shop bill, hotel bill, book debt, work and labour done, wages of artisans, labourers or servants, after the expiration of 3 years from the date on which the cause of action accrued.

In an action at law which concerns compensation for causing bodily injury or even death due to a civil offence, the court can decide not to apply the Limitation of Actions rule if the court considers it to be rational when taking into consideration the facts of each particular case. This discretionary authority of the court can be used within 5 years from the prescription date.

According to article 5 of the Law any other causes of action not specifically provided for above cannot be brought after the expiration of 6 years from the date when such cause of action accrued.

In relation to civil wrongs, such as fraud, negligence, trespass, the position regarding their limitation period is provided for in article 68 of The Civil Wrong Law Cap.148 which states that no action at law can arise for a civil wrong, unless it arises within 3 years of the act or omission for which the action at law was raised for.

Further, under article 8 of the Law in computing the period of limitation, any time during which the person against whom the period of limitation runs is under the age of 18 or is of unsound mind or is prohibited from the management or administration of his affairs shall be excluded from such period.

Since 1964 the aforementioned regarding limitation periods have been suspended for personal injuries or death arising out of negligence and the same 3 years limitation period applies.

Under the Suspension of the Limitation of Actions Laws of 1964 and 1982 (The “Suspension Laws”), the provisions of the Law were suspended until such time as the effects of the Turkish-Cypriot insurgency of 1964 and Turkish Invasion of 1974 would be reversed. The time when this reversion would take effect was to be decided, under the Suspension Laws, by aspecial decree to this effect ofthe Council of Ministers of the Republic of Cyprus. This decree has not yet been issued. However, the enforcement of the provisions of the Law has been repeatedly suspended by relevant amendments to the Law for the same reason. On 18th November 2010 a new amendment to the Law was published in respect to the renewal of suspension of the Law which has now been suspended until 31st December 2011.

The Suspension Laws were repealed by the Suspension of the Limitation Period (Miscellaneous Provisions) Law of 2002.This law provides that a plaintiff in order to benefit from any suspension of the limitation of his cause of action has to prove that due to the Turkish-Cypriot insurgencies he/she could not effectively put forward his cause of action. This law was put into effect on 1/6/2005 and the limitation periods, as provided for under the Law start running from the beginning from 1/6/2005.

To conclude, if the claimant can prove to the court that the cause of action was affected by the Turkish-Cypriot insurgencies of 1964 and Turkish Invasion of 1974, then the Suspension of the Limitation Period(Miscellaneous Provisions) Law of 2002 will apply. In any other case, where the cause of action had nothing to do with the Turkish-Cypriot insurgencies of 1964 and the Turkish Invasion of 1974, then the Limitation of Actions Law Chapter 15 will apply, the enforcement of the provisions of which have been suspended until 31st December 2011. Unless the Limitation of Actions Law is further suspended, the position after 31st December 2011 will be as follows. If the limitation period for a cause of action will have lapsed by 31st December 2011, then this cause of action will be considered to have prescribed. In the event that the limitation period has not yet expired, then such period will be considered to have commenced despite the suspension of the Law and the remaining time up until expiration of such limitation period will continue to run as from the 31st December 2011.

Contributed by:

Christina Ioannidou, BSc (Hons), AM, BA (Hons) Oxon, Advocate

Phivos Michaelides, LL.B (Hons), LLM, Associate

ioannidesdemetriou LLC

2 Diagorou Street, ERA House, floors 7-12, 1097 Nicosia, Cyprus.

P.O. Box 20106, 1601 Nicosia, Cyprus.

Tel: +357 22022999

Fax: +357 22022900

Website:

Contact persons:

Christina Ioannidou()

Nayia Morphi()

nobel trust limited

2 Diagorou Street, ERA House, 1097 Nicosia, Cyprus.

Tel: +357 22022777

Fax: +357 22022700

Website:

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