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The statute of limitations is conceived to prevent the prosecution of civil claims that are stale because the passage of time can create great prejudice in the form of failed memories, lost or destroyed evidence and even the death of critical witnesses. In most claims involving personal injury, the time-bar rule is two years. Where the claim relates to a breach of contract or other property rights issues, the statute of limitations is generally six years. Of course, there are always exceptions to these rules.

There are times when a court will shorten the length of time when a claim maybe filed. Where the court concludes that there was an unreasonable delay in filing the action and, as a result, the party defending the claim has sustained a harm, a court may bar a claim even if the statute of limitations had not expired. This principle of law is known as the doctrine of laches.

While the law will not usually apply the doctrine of laches in a case where the claim is controlled by a statute of limitations, it has been applied in some rare cases. Recently, one of those cases has found its way to an appellate panel in New Jersey. That case involved the break-up of a law firm where one partner agreed to pay a retiring partner a sum of money on regular installments. Within a year or so after the retiring partner left the firm, the non-retiring partner refused to pay the installments claiming that the retiring partner violates the terms of the deal. The retiring partner never filed an action for breaching the contract. When the retiring partner died four years later, his estate filed a lawsuit against the non-retiring partner for a breach of contract. The claim was asserted well within the six year statute of limitations.

At trial, the laches defense asserted by the non-retiring partner was rejected. The appellate court, however, reversed the trial court’s decision on the laches issue. In rendering its decision, the court noted that if equitable principles could extend the statute of limitations, they should also be available to shorten the time-bar period. The court’s decision in that case was compelled by two very important considerations. The first was that the retiring partner was no longer available to testify and to the extent that the non-retiring partner expected to use statement made by the retiring partner to present a defense, he would be required to overcome an escalated standard of proof for those statements.

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