Limitation period of damage claims in The Netherlands
When a company faces damages caused by another contract party, the first thing to do is to send the other party a notice of liability and reserve your rights to claim damages. Such a notice will also interrupt the limitation period which is necessary as it can take years before the claim is presented in court. Omitting including the correct legal grounds for that liability in the initial or confirming notices, can lead to a conclusion in court that the claim has expired. Dutch solicitor Thomas van Vugt, specialized in Dutch contract law, looks into this matter.
Right of action prescribes after 5 years
The period of limitation for a claim for compensation of damages is in general 5 years (there are exceptions for personal injury claims, damages arising from sexual offences or environmental pollution). The limitation period will commence the day following the day on which the damage occurred and the claimant became aware of the responsible party. This period may be interrupted, after which a new period may begin to run. You can interrupt the limitation period by sending a letter to the other party stating in unequivocal wording that you hold the other party liable and that you will reserve the rights to claim compensation.
Dutch case law
When you hold someone liable on specific legal grounds but later in litigation put forward different arguments for that liability, you may find that your right of action is expired after all. This happened in a recent court case for the Dutch district court. The claimants in this case were Dutch milk farmers who had suffered substantial damages caused by the unjustified denial of European milk quota by the Dutch authorities. When suing the Dutch State, the judge ruled that their claim was precluded by the lapse of time. While the farmers had repeatedly confirmed the State’s liability every couple of years to prevent prescription of their right of action, the letters all mentioned that they held the State liable on the grounds of misinforming the farmers about the milk quota procedure. In court, however, they based their claim on unlawful justice of the administrative court where the farmers appealed the State’s rejection decision (which occurred more than 15 years ago). This is a different liability and regarding the claim based on this liability, the period of limitation was not interrupted and hence the claim of the farmers was unfortunately barred.
Dutch law firm, based in Amsterdam
Sending out a notice of liability to a (contract) party which is responsible for damages or which is in default, is common practice in the business community. Seen the implications of invoking different legal grounds, however, it is strongly recommended to seek prior legal advice in these matters, especially when the stakes are high. The attorneys of AMS Lawyers are not only very experienced in contract law, but will also litigate on their clients’ behalf, if necessary. We are fully committed to our clients’ cases, work in a horizontal organization and offer competitive fees. Please contact us free of charge and obligation.