Prescription Flashcards
What does prescription mean?
Rule of law designed to bring finality to disputes.
Regulated by Prescription Act
A debt will prescribe after the lapse of a certain time period.
What are the consequences of prescription?
- Debtor will not be liable to the creditor for a debt;
- Creditor cannot institute legal action against the debtor for a debt.
When does prescription start?
- As soon as debt is due OR
- Once the creditor becomes aware of the existence of the debt
What is the prescriptive period for a judgment debt, debt secured by a mortgage bod, tax debt or debt owed to the State?
30 years
What is the prescriptive period for a debt owed to the State and arising out of a loan of money/ sale/ lease of land by the State to a debtor?
15 years
What is the prescriptive period for debts arising from a negotiable instrument (cheque or notarial bond)?
6 years
What is the prescriptive period for any other debt (contractual or delictual)?
3 years
Is it possible for the prescription period to be delayed?
Yes (sec 13 of the Act):
- creditor is a minor, insane or person under curatorship
- debtor outside RSA during that period
- Debtor and creditor married to each other
- Creditor and debtor are partners and debt arose out of the partnership relationship
- Executor of estate not appointed yet
When will prescription be interrupted?
- Debtor’s express or tacit acknowledgement of his liability
- Judicial interruption: service of process on the debtor to claim the payment of a debt
A client instructs you to issue summons on a claim that has clearly prescribed. What do you advise the client and what is your own position?
- Not unprofessional to sue BUT
- Must inform client of the risks of an adverse costs order for costs if the defendant raises prescription as a special plea (although the costs can be lower if the client withdraws the claim after receiving the special plea)
- Any payment can be received from debtor
An attorney allows a claim to prescribe. What steps must be taken to protect his client?
- Tell client in writing that claim has prescribed
- Do not admit negligence
- Advise client to consult another attorney re the original claim and the prescription
- Advise client to seek indep advice re possible claim against me
An attorney allows a claim to prescribe. What steps must be taken to protect himself?
- As soon as he becomes aware of the prescription, he must advise his professional indemnity insurer AND Attorneys Indemnity Insurance Fund of the potential claim
- You don’t need to inform the Law Society
What should a client do if his attorney has allowed his claim to prescribe?
- Terminate his mandate, collect his file
- Instruct a new attorney to send a LOD to previous attorney
- Inform LPC in his region
- Wait for LP Insurance Indemnity Fund to approach you with a settlement
- If there is undue delay, issue summons against previous attorney for damages
- Consider any offers of payment or settlement from either the attorney himself or the LPIIF
