A brief history of the statute of limitations under Danish law
The first statute of limitations on legal claims under Danish law was created in 1683. Under this law, a legal claim could be enforced upon its debtor until 20 years after the claim was established regardless of the foundation of the legal claim in question. The 1683-law was supplemented in 1908 by a new law, which consisted of several exceptions to the 1683-law. Due to the widespread nature of these exceptions, the initial limitation period of 20 years only applied in rare circumstances. According to the mentioned rules, the holder of the legal claim, the claimant, could disrupt the limitation very easily, which meant the legal claim could be enforced for another five or 20 years depending on its foundation, which, as imaginable, led to many inconveniences for both the debtor as well as the courts.
The current Statute of Limitations under Danish Law
The current Statute of Limitations on legal claims was implemented in 2008. The ideas behind this law were of a socio-economic nature, including; to protect the debtor from his claimants enforcing old legal claims many years after its due date, which would inflict great uncertainty for the debtor, to push claimants to clarify and to enforce their legal claims within a reasonable, limited time and to prevent the courts from having to regard old and arduous claims with very little preserved evidence.
The effects of the limitation period
If a claim has not been enforced at the end of the limitation period, then the claim ceases to be enforceable. Any accessory claims, such as claims on interest etc., will also cease to be enforceable.
The debtor may still fulfill the claim, but the claimant cannot use legal action to force the fulfillment.
Differentiated limitation periods
The various limitation periods can be found in §§ 3 through 8 and 11 of the Statute of Limitations.
The main limitation period is three years following the day of which the claim became due. The period differs according to which type of claim that is in question, and the following paragraphs elaborates on the different types of claims and their limitation periods.
If the claim in question does not fit under any of the mentioned types, then the main limitation period of three years applies.
Claims on award of damages or indemnification against the public administration authorities
A legal claim, which has been established due to a public administration authority’s negligence of a duty determined in legislation, which resulted in the assault of a minor (the Danish legal age is 18), does not have a limitation period, and the injured party may always seek to enforce such a claim.
Assault in this context should be read as sexual assault, bodily harm, offences against the personal freedom, offences of incest and of neglect or degrading treatment.
Claims derived from employment contracts
This type of claim includes all claims that an employer or employee could have against each other in the context of the employment contract between the parties. This includes the employee’s claim on salary and the employer’s claim on labor or claim on refund if too much salary has been paid to an employee.
In these cases, the limitation period is five years following the day the claim became due.
Claims with a specific legal basis
The claim is said to have a specific legal basis, if the debtor has issued a promissory note, if the claim is registered in a capital market company, if the debtor has acknowledged the claim in writing or if the claim has been determined in a settlement between the debtor and the claimant, a judicial ruling or any other binding ruling, which determines the existence and extend of the claim. The limitation period for these claims is 10 years.
The debtor’s promissory note must be written, unilateral and unconditional for it to result in a limitation period of 10 years.
It is important to bear in mind that interests and other fees from a claim with a specific legal basis stemming from before the concerned legal basis was established will have a limitation period of 10 years, whereas interests and fees that accumulate afterwards will have the regular limitation period of three years.
The limitation period starts at the time when the claim falls due.
Claims derived from loans and unpermitted overdrafts
Any claim derived from loans or unpermitted overdrafts, private or commercial, expires after 10 years.
If the parties have agreed upon a time for the claim to fall due, then the limitation period will start at this point. If not, then the limitation period will start at the latest deposit or withdrawal from the bank account that is not made by the claimant, but no later than the time of the resignation of the agreement between the parties.
Claims derived from deposits in financial institutions
A claim on a deposit made in a financial institution and any interests accumulated onto that deposit expires after 20 years.
The limitation period begins at the latest deposit, withdrawal, accumulation of interest or any other entry on the bank account.
Claims on periodic payments
Any claim on pension, annuity and other current liabilities derived from a judicial ruling or agreement between the parties that falls due with regulated intervals has a limitation period of 10 years, unless it has characteristics of a claim on payment as part of an instalment plan. If the claim is of the latter category, then the regular limitation period of three years applies.
The limitation period begins from the last handout, or if no handout has been paid, then the time of which the first handout payment fell due.
Suspension of the limitation period and additional limitation periods
The limitation period of a claim cannot begin before the claimant is acquainted or should be acquainted with his claim and the identity of the debtor. In order to prevent claimants from consciously keeping themselves unacquainted with their claim, the suspension-rule only applies if the claimant has made reasonable efforts to acquire knowledge of the claim or the identity of the debtor.
It is important to note that only unacquaintance due to misunderstandings of the factual circumstances result in a suspension, whereas misinterpretations, misunderstandings, lack of knowledge etc. of the legal basis/law, which constitutes the foundation for the claim, do not result in a suspension of the limitation period.
If the claimant is unable to disrupt the limitation period due to lack of knowledge of the debtor’s place of residence or due to any other obstacles that the holder of the claim is not responsible for, then the legal claim cannot cease to be enforceable for a period of a minimum a year after the claimant is acquainted with the debtor’s place of residence or the obstacle has ceased to prevent the disruption.
Absolute limitation periods
Since the idea behind the 2008-law on limitations was to protect debtors from legal uncertainty, the legislator wanted to ensure that the limitation period cannot be pushed to eternity because of the above-mentioned suspension-rule or the additional limitation periods. Accordingly, all claims have an absolute limitation period, which cannot be exceeded, regardless of whether the holder of the claim is acquainted with his claim, the identity of the debtor, the residence of the debtor or if any obstacles prevent him from disrupting the limitation period. The absolute limitation period differs according to the type of claim.
Claims on award of damages or indemnification from bodily injury or claims on award of damages from injury caused by environmental pollution
The absolute limitation period for a claim of this type is 30 years, although claims on award of damages or indemnification from bodily injury in relation to the holder of the claim’s employment has no absolute limitation period. This means that the relative limitation period of three years on the latter kind of claims can be suspended for any amount of time.
The absolute limitation period will start at the end of the harmful act committed against the holder of the claim.
Claims on award of damages in a non-contractual relationship
If a claim does not fit into the category of claims on award of damages or indemnification from bodily injury or claims on award of damages from injury caused by environmental pollution etc., and if the claim is derived from a non-contractual relationship, then the absolute limitation period is 10 years following the end of the harmful act committed against the injured/the claimant.
Disruption of the limitation period
The claimant can disrupt the limitation period in various ways. A disruption will result in a new limitation period. The new limitation period will be of the same length as the previous one, cf. the above-mentioned limitation periods.
Admission of the debt
If the debtor admits owing the claim to the claimant, or if the debtor gives the claimant a legitimate expectation of the debtor having made such admission, then the limitation period is disrupted. Thus, having the consequence that a new limitation period will begin from the moment of the admission. The admission suffices to disrupt the limitation period if the debtor’s behavior justified deprives the holder of the claim of a reasonable cause to initiate legal action. A debtor’s isolated payment according to a payment schedule is insufficient to disrupt the limitation period unless debtor’s isolated payment states and acknowledges being in debt of the claim in its entirety.
If the admission consists of a promissory note from the debtor, then the limitation period after the disruption period will be of 10 years regardless of the previous limitation period.
Initiation of legal action
If the claimant initiates legal action at a court, or any other board of complaints, which can make binding decisions about the claim’s existence and size, then a new limitation period will run from the time of which the legal action has resulted in a binding decision.
If the legal action does not result in such a decision, then the original limitation period will continue to move forward although the claim cannot cease to be enforceable for a period of minimum a year after the initiation of the legal action. The additional period applies to civil proceedings for a declaratory judgment, meaning that initiation of this type of legal action does not result in a disruption.
This additional period does not apply, if it must have been obvious for the claimant at the initiation of the legal action, that it would not result in a binding decision.
The declaratory nature of the Statute of Limitations
The Danish Statute of Limitations is declaratory, but the rules may only be deviated after the limitation period has begun for the given claim, if the deviation places the debtor at a disadvantage. The same applies if the deviation creates a disadvantage for a consumer-claimant if the debtor is a business operator.
Written by Frederikke Malika Jacobsen, Virtus Law.