CW Insurance Law COVID-19 Insurance Series-Effect of Suspension of Two Year Limitation Period


Effective March 26, 2020, British Columbia has suspended all mandatory limitation periods and time periods established by British Columbia enactments and laws by way of Ministerial Order No. MO86, amended by Ministerial Order No. MO98. The suspension of limitation periods shall extend until such time as the state of emergency made March 18, 2020 by the province in respect of the COVID-19 pandemic expires or is cancelled.  Unlike similar orders suspending limitation periods made in Ontario and Quebec, this B.C. Order is not retroactive and applies effective March 26, 2020.

The effect of this Order is to suspend all limitation periods or other mandatory time limits to commence civil claims, subject to ultimate discretion of the court (or any other tribunal or body with like statutory power). This means that the basic two-year limitation period for commencing a civil claim in British Columbia is suspended, as well as all other civil litigation deadlines mandated by the B.C. Supreme Court Civil Rules, and other provincial acts and regulations, such as the one year deadline for parties to serve a filed notice of civil claim on defendants and other procedural deadlines.

It should be noted that the B.C. Supreme Court does accept electronic filing at this time. Accordingly, this Order will not prevent or prohibit claimants from commencing a proceeding, but will provide claimants with additional time to commence claims.

In the context of the insurance industry, the Order will suspend the limitation dates within which an insured must commence an action against its insurer – suspending the period within which the insurer may face the risk liability. Pursuant to section 23 of the Insurance Act, R.S.B.C. 2012, c.1, and consistent with the limitation regulations in B.C., a claim against an insurer must be brought within two years of the date that damage or loss to insured property, or other cause of action was known, or ought to have been known. The Order has suspended this time, meaning that claims that would meet the two year limitation date on or after March 26, 2020 have not expired and may be brought at a later time.

The suspension of limitation periods and deadlines will also apply to third party claims. The Supreme Court Civil Rules require that third party claims be brought within forty-two days of service of a Notice of Civil Claim or Counterclaim. This tight deadline can be a disadvantage to insurers that may not have all information necessary to appropriately consider and determine if any third party should be brought into a claim at the time they are served with the pleading. However, the Order operates to suspend that deadline. Insurers that have been considering whether they are able to identify an appropriate third party to any ongoing litigation prior to an upcoming limitation deadline now have additional time to consider the addition of that party to the litigation.

Insurers and litigants with limitation periods about to expire on or around March 26, 2020 should carefully monitor the government’s approach to ensure that no limitation period expires on the expiry or cancellation of the state of emergency.

A final consideration is that liability claims from more than two years prior against insureds remain an open risk to insurers, where as in the pre-COVID-19 world, those risks would be extinguished by the operation of the B.C. Limitation Act.

For more legal analysis of how COVID may affect your business, or personal affairs, visit Clark Wilson’s COVID-19 Resource and FAQ pages