Darn, Missed the Deadline To Sue. Or Did You?
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As you may be aware, each type of claim affords plaintiffs a different amount of times that you are permitted to sue for that claim under New York law. In legalese, this is commonly referred to as the dreaded "Statute of Limitations."
Some Common Examples of the Statute of Limitations at Work
Some of the more common examples of this include a breach of contract claim (6 years) and negligence (3 years). (Note: malpractice is professional negligence, and therefore is also usually governed by a 3-year statute of limitations, although there are some categories of malpractice, such as medical, pediatric and dental malpractice, that have shorter limitations periods.)
Some Important Exceptions to the Statute of Limitations
But there are a few important exceptions to this rule, such as where the plaintiff is an infant, or under a disability, both of which toll the Statute from beginning to run.
Another Important Exception to the Statute of Limitations: The Continuous Representation Doctrine
Another important exception to this rule is the continuous representation doctrine, which states, in essence, that the time on the statute of limitations does not start to run so long as there is "a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim" (McCoy v Feinman, 99 NY2d 295, 306; see Zorn v Gilbert, 8 NY3d 933, 934).
In the case of Symbol Tech v. Deloitte & Touche, LLP, New York's Appellate Division, Second Department held that a Forbes 500 company's accounting malpractice claims against the firm that had been hired to perform their audits would be allowed to continue even though some of the audits had been performed more than 3 years before the malpractice claims were brought (and therefore appeared to be time-barred).
In other words, so long as the defendant continues to work on your behalf on that particular project, your time within which to sue them for their negligence, or breach of your agreement, doesn't start to run until your relationship is formally ended.
Because so long as it is contemplated that the defendant's work on a specific project - in this instance, financial audits for particular years - will continue beyond that time, it would be unfair, and inherently pit client against their advisor when the client suspects the advisor has erred - even while they are still working together.
The Symbol Tech case demonstrates the plaintiff's wisdom, because by assuring that their underlying agreement with the audit firm reflected the defendant's ongoing obligation to correct prior audits, they also assured that their time within which to address the defendant accounting firm's mistakes didn't start to run.
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