The Risk of the Claim Becomes Time-Barred Due to the Expiry of the Limitation Period

The risk of the claim becomes time-barred due to the expiry of the limitation period in Denmark, as the limitation period is shorter in Denmark than in several other countries.

Does the statute of limitations in your country or in Denmark apply?

The statute of limitations in the country where the debtor lives determines whether the statute of limitations in Denmark applies.

This means that if the debtor – a business, a company or a person – is resident in Denmark, Danish law and the Danish statute of limitations apply.

When does the limitation period commence?

The limitation period is calculated from the earliest date on which the creditor could demand payment of the claim, unless otherwise provided by other provisions.

If the debtor has been granted a period of grace or otherwise a deadline, within which payment is considered timely, the limitation period shall not commence until the expiry of the payment deadline.

For claims arising from breach of contract, the limitation period shall commence from the date of the breach.

For claims for compensation or damages for injury caused outside a contractual relationship, the limitation period shall be calculated from the date of the injury.

The starting point of the limitation period may be postponed, and this may be due to several different circumstances, including the creditor’s lack of knowledge of the claim or the debtor. In certain cases, the limitation period may be considered suspended, and the limitation period shall only be calculated from the date on which the creditor became aware or should have become aware of the claim.

Limitation periods in Germany and Denmark

There are significant differences between the limitation period in other countries and in Denmark.

The limitation period in Denmark is three years, unless otherwise specified by other provisions. For claims based on an invoice, the limitation period is generally calculated as three years from the due date.

In Germany, for example, the limitation period is longer, being three years from the end of the year.

Example: If the due date according to the invoice is 25 May 2022, the claim will not become time-barred until 31 December 2025 under German limitation law. Under Danish limitation law, the claim will become time-barred on 22 May 2025.

This means, that the claim will already have been time-barred for several months under Danish limitation law, if the claim is not asserted until December 2025.

For claims arising from breach of contract, the limitation period is calculated from the date of the breach.

For damage caused outside of a contractual relationship, the limitation period is calculated from the date of the damage.

The limitation period is 10 years, when a promissory note has been issued for the claim, and when the existence and amount of the claim have been acknowledged in writing or established by settlement, judgment or payment order endorsed by the bailiff’s court.

If the creditor was unaware of the claim or the debtor, the limitation period may be postponed so that the limitation period only begins to run from the date on which the creditor became aware or should have become aware of the claim, but limitation shall occur no later than 10 years after the commencement date.

The limitation period is 5 years for claims based on an agreement to perform work as part of an employment relationship. In addition, there is a particularly long limitation period for personal injury claims.

How is the limitation period interrupted?

Sending reminders to the debtor does not interrupt the limitation period.

The limitation period is only interrupted when the creditor takes legal action against the debtor with a view to obtaining a judgment, a payment order endorsed by the bailiff’s court, or an arbitration award.

In practice, taking legal action means filing a writ of summons with the court, where the debtor has jurisdiction, or by means of a payment order to the bailiff’s court or by filing for bankruptcy. The date of the court’s endorsement upon receipt of the writ of summons is considered the date of interruption of the limitation period.

Alternatively, the limitation period may be interrupted if the debtor expressly acknowledges his obligation to the creditor or by his conduct.

Provisional interruption of limitation

If settlement negotiations have been initiated between the debtor and the creditor before the expiry of the limitation period, possibly with the assistance of an independent third party, the limitation period shall commence no earlier than one year after the date on which the settlement negotiations are deemed to have been concluded.

In addition, a written suspension agreement may be entered into in which the parties agree that the limitation period shall be postponed until the suspension expires. This means that the limitation period shall not commence, as long as the suspension agreement is in force.

The Limitation Act is mandatory

The Limitation Act is mandatory, which means that it cannot be waived by prior agreement to the detriment of the debtor or a creditor.

Consequence of limitation:

The consequence of limitation is that the creditor loses their right to demand performance and is thus prevented from enforcing the claim. Any claims for interest and similar benefits also lapse with the limitation.

My recommendation

I note that the above are general rules, and that there may be circumstances that have changed the start date of the limitation period, or the limitation period may have been postponed or suspended, and therefore a specific legal assessment of the statute of limitations must be made in each case.

I recommend checking the statute of limitations for the claim upon receipt of the case.

If you are in doubt about when the limitation period expires and whether the claim can be enforced before the expiry of the limitation period, please feel free to contact us, and we will provide a free, no-obligation legal assessment of whether the claim is time-barred.

This article was written by lawyer Anders Stig Vestergaard.