Through ruling SC17161-2015 of December 14, 2015, the Supreme Court of Justice reiterated its position regarding the way in which the statute of limitations to initiate applicable legal actions by injured and/or insured parties in a civil liability insurance agreement must be computed.
In fact, the Court specifies that the statute of limitations to initiate applicable legal actions under civil liability insurance contracts, aimed at providing coverage against damages -loss or injury- arising out of or deriving from performance of contract (contractual liability) or from any damages caused to any third party even if no legal relationship between the injured party and the damaging party were to exist (non-contractual liability), must satisfy two rules primarily contingent upon the party claiming compensation.
According to the Court, in order to prevent limitation (prescription) period of cause for action from lapsing for both insured and injured parties, action must be initiated within the terms provided for in article 1131 of the Code of Commerce, that is, the period for the injured party shall be computed as of the date of injury, while that of the insured party shall be computed as of the date on which the injured party formally submits its judicial or extrajudicial claim.
In other words, in order to prevent cause for action from lapsing, legal action must me initiated within the two year period following, computed as of actual date of injury or as of the date on which injured party formally submits its judicial or extrajudicial claim to the insured party.
The Court determined “In liability insurance the incident shall be deemed to have occurred as of the date on which the act by insured took place, date as of which the limitation period for the injured party shall be computed. With regard to the insured party it shall be computed as of the date on which injured party formally submits the judicial or extrajudicial claim to insured party (…) consequently at present and for civil liability insurance this inarguably and unavoidably gives rise to two absolutely differentiated sub-rules:
(i) For the injured party the limitation period is computed as of the date of actual act that typifies the incident;
(ii) For the insurance company as of the date on which judicial or extrajudicial compensation claim is formally submitted for damages cause to a third party.”
For illustration purposes, if a car accident takes place as a result of which the insured party must compensate damages caused to the third party (injured party), the term during which the injured party may initiate the corresponding compensation action -so as to prevent such cause for action from lapsing- shall be two years as of the date on which the car accident took place.
For the insured party -who caused the car accident- the same two-year period to initiate action against the insurance company, computed as of the date on which the third party -injured party- formally submits the judicial or extrajudicial claim to insured party.
Finally, the Court explained that actions arising out of or deriving from other insurance contracts shall follow the general rules(1), that is, action shall be initiated within the two following years, computed as of the date on which the interested party learnt or should have learned of the fact that gave rise to the action.
(1) Article 1081 of the Code of Commerce