A New Approach to Old Cases: Reconsidering Statutes of Limitation

I Introduction

To improve the chances of obtaining a correct legal decision, it is desirable to maximize the amount of evidence available to the court. Evidence is maximized to the extent that no existing evidence disappears and all potential evidence is uncovered.¹ However, uncovering additional evidence is usually not the principal barrier to evidence maximization:

either litigant may typically request a stay of the proceedings in order to pursue new evidentiary leads.² Instead, evidence maximization is principally a matter of preserving existing evidence. More particularly, it is essential to protect against the loss of existing exculpatory evidence. Since the plaintiff initiates litigation, we may presume that she will preserve all inculpatory evidence. Exculpatory evidence, however, may disappear in the period between the harm and the plaintiff's initiation of the suit, since the eventual defendant, unaware during this period that she will become the target of a lawsuit, lacks the incentive to maintain such evidence.

Since evidentiary loss is sometimes inevitable, it is also necessary to minimize the consequences of the judicial errors that such losses may generate. When inculpatory evidence disappears, the risk of error rests, as an initial matter, entirely upon the plaintiff. The loss of exculpatory evidence, in contrast, exposes the defendant to the risk of error. The legal system should provide a mechanism for fairly and efficiently allocating the risk of error among the parties.

The basic argument of this article is that, in the context of civil litigation, a properly designed statute of limitation can effectively address these two evidentiary imperatives. The current regime of temporal limitation neither maximizes evidence nor adequately responds to the error risks associated with the absence of evidence. This article proposes an alternative regime capable of achieving both goals.³

Statutes of limitation currently appear in two forms. The first, and traditional, form defines a fixed period within which the plaintiff may file her claim and bars any claim filed after this period. The second form, the discovery rule, softens the traditional statute's bar when the plaintiff is reasonably unaware, for some time after the harm occurs, of some of the facts essential to her claim. Under the discovery rule, the statutory clock begins to run only at the time when the plaintiff discovers (or should reasonably have discovered) all the necessary facts. Like the traditional statute of limitation, however, the discovery rule bars the plaintiff from filing after the statutory period has ended.

Because evidentiary loss and factual uncertainty are not operative factors in the current models of temporal limitation, these models do not respond systematically to the two evidentiary concerns identified above. Under the traditional statute of limitation, the only relevant concern is that the plaintiff come to court before the end of the statutory period. There is no reason for the plaintiff to file earlier rather than later within this period, although, given time's corrosive effect upon the defendant's exculpatory evidence, it is preferable, from an evidentiary perspective, that the plaintiff file as early as possible. The discovery rule, too, simply requires the plaintiff to bring suit at some point within a fixed period of time beginning at the moment when a reasonably diligent plaintiff could file. The plaintiff in a discovery rule regime may therefore wait to file until the end of the statutory period in order to inflict evidentiary harm upon the defendant. Thus neither the traditional statute of limitation nor the discovery rule creates adequate incentives for a filing timed to avoid evidentiary decay.⁴ This shortcoming is more than a theoretical flaw. It has been shown that plaintiffs in states with ten-year limitation periods for medical malpractice are 15 per cent more likely to succeed than plaintiffs in states with two...