05/07/2024 | News release | Distributed by Public on 05/07/2024 15:09
A statute of limitations is a mechanism which most legal systems contemplate that sets the maximum amount of time after an alleged offense during which legal proceedings may be initiated in connection with such event. When the applicable statute of limitations expires, the relevant legal claim can no longer be pursued in court. The duration of the specified period of time varies depending on the nature of the alleged offense and the place where it took place. Statutes of limitation do not generally apply to crimes against humanity, war crimes and genocide.
In the context of a conflict or legal dispute, tolling agreements can serve as a tool that allows parties to suspend or place on hold the applicable statute of limitations while allowing the parties to gain additional time to resolve their differences outside of court. To learn about how you can access U.S. courts, you can read Brown Rudnick's article on that topic by clicking here.
Benefits of Tolling Agreements
Tolling agreements are typically mutually beneficial. They provide claimants with the necessary time to strengthen their cases and gather comprehensive evidence, avoiding the rush to sue as a statute of limitations approaches its end. For defendants, these agreements offer a chance to negotiate settlements out of court, potentially reducing legal expenses and to manage the reputational challenges that court proceedings may bring. Tolling Agreements can be flexible, allowing parties to enter into one before a lawsuit is filed or during ongoing litigation.
Link to the Underlying Transaction
It is key for tolling agreements to articulate the scope of paused legal actions and specify the claims they cover. The agreement should also describe how the parties are to act during the tolling period, include restrictions on filing related lawsuits or pursuing alternative dispute resolutions in connection with the same subject matter, and indicate what occurs when the agreement expires.
After the Tolling Agreement Expires
Upon the expiration of a tolling agreement, the applicable statute of limitations typically resumes. If no resolution has been reached, the claimant may proceed with filing a lawsuit, depending on the remaining time under the statute of limitations. This critical juncture often prompts a decision on whether to settle or litigate, influenced by the progress made by the parties during the tolling period. To learn how you could benefit from obtaining documents or testimony from a person located in the U.S. for a non-U.S. proceeding, you can read Brown Rudnick's article on that topic by clicking here.
Cross-Border Considerations
When negotiating tolling agreements that involve parties from different countries, the following factors should be considered:
Tolling agreements can serve as useful tools to provide flexibility and foster a thoughtful approach to dispute resolution. If you are interested in entering into a tolling agreement or are dealing with one now, let us know. Our team of international lawyers, many of whom are also admitted to practice law in Latin American countries, can help create a tailor-made strategy to protect your ability to effectively negotiate a settlement and avoid litigation.