Prescription

Question 1

What does prescription mean?

Answer 1

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.

Question 2

What are the consequences of prescription?

Answer 2

1. Debtor will not be liable to the creditor for a debt;
2. Creditor cannot institute legal action against the debtor for a debt.

Question 3

When does prescription start?

Answer 3

1. As soon as debt is due OR
2. Once the creditor becomes aware of the existence of the debt

Question 4

What is the prescriptive period for a judgment debt, debt secured by a mortgage bod, tax debt or debt owed to the State?

Answer 4

30 years

Question 5

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?

Answer 5

15 years

Question 6

What is the prescriptive period for debts arising from a negotiable instrument (cheque or notarial bond)?

Answer 6

6 years

Question 7

What is the prescriptive period for any other debt (contractual or delictual)?

Answer 7

3 years

Question 8

Is it possible for the prescription period to be delayed?

Answer 8

Yes (sec 13 of the Act):

1. creditor is a minor, insane or person under curatorship
2. debtor outside RSA during that period
3. Debtor and creditor married to each other
4. Creditor and debtor are partners and debt arose out of the partnership relationship
5. Executor of estate not appointed yet

Question 9

When will prescription be interrupted?

Answer 9

1. Debtor’s express or tacit acknowledgement of his liability
2. Judicial interruption: service of process on the debtor to claim the payment of a debt

Question 10

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?

Answer 10

1. Not unprofessional to sue BUT
2. 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)
3. Any payment can be received from debtor

Question 11

An attorney allows a claim to prescribe. What steps must be taken to protect his client?

Answer 11

1. Tell client in writing that claim has prescribed
2. Do not admit negligence
3. Advise client to consult another attorney re the original claim and the prescription
4. Advise client to seek indep advice re possible claim against me

Question 12

An attorney allows a claim to prescribe. What steps must be taken to protect himself?

Answer 12

1. 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
2. You don’t need to inform the Law Society

Question 13

What should a client do if his attorney has allowed his claim to prescribe?

Answer 13

1. Terminate his mandate, collect his file
2. Instruct a new attorney to send a LOD to previous attorney
3. Inform LPC in his region
4. Wait for LP Insurance Indemnity Fund to approach you with a settlement
5. If there is undue delay, issue summons against previous attorney for damages
6. Consider any offers of payment or settlement from either the attorney himself or the LPIIF