New German Statute of Limitations Will Bar Certain Claims after December 31, 2004

New German Statute of Limitations Will Bar Certain Claims after December 31, 2004

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Companies doing business in Germany should note that the statute of limitations applicable to many claims arising under German law has been shortened and such claims will expire on December 31, 2004. Revisions to the German Civil Code in 2002 reduced the statute of limitations applicable to many claims to 3 years, from the previous periods of 4 years or 30 years. All such claims that arose prior to January 1, 2002 will now be time-barred after December 31, 2004 (or such earlier date as would have applied under the old regime).

This change in the statute of limitations applies to various types of claims, including, but not limited to, the following:

  • Remuneration claims arising from any kind of contracts
  • Certain claims regarding compensation of damages
  • Claims in relation to loans, guarantees and personal securities (B├╝rgschaften)
  • Other statutory compensation and reimbursement claims

Every company is advised to carefully review any open claims it may have, especially claims arising from the period before January 1, 2002, and to determine whether such claims may fall under the new regime.

To avoid losing rights arising out of such claims at the end of this year, companies are advised to take one of the following measures:

  • File a lawsuit covering the claim
  • Start arbitration proceedings (if arbitration is agreed to between the parties)
  • Start legal dunning procedures (the debtor must receive a court order to pay before the end of the year)
  • Undertake serious and documented negotiations between the parties on the claim in question (which would suspend the statute of limitations during the negotiations)
  • Reach an agreement between the parties to waive the statute of limitations

Attorneys at WilmerHale's Munich and Berlin offices will help you to identify any such claims and to start the appropriate measures in order to avoid losing rights as a result of the change to Germany's statute of limitations law.