Procrastination, deadlines, and statutes of limitation.

• Author: Wistrich, Andrew J.

ABSTRACT

Statutes of limitation are deadlines. Although psychologists have discovered a great deal about how people respond to deadlines during the past thirty years, the basic structure of statutes of limitation has not changed since at least 1623. This Article explores the question of whether the received model of statutes of limitation remains optimal in light of what we now know about procrastination, the planning fallacy, loss aversion, intertemporal discounting, the student syndrome, and other features of human cognition. It concludes by suggesting a more modern approach to statutes of limitation that is based on a better understanding of how people actually behave. Specifically, the archaic "all-or-nothing" approach should be abandoned in favor of a more modern, incremental approach that gradually decreases the value of untimely claims as the duration of the plaintiff's delay in filing increases.

TABLE OF CONTENTS INTRODUCTION I. THE PURPOSES OF CIVIL STATUTES OF LIMITATION II. THE PSYCHOLOGY OF PLANNING, PROCRASTINATION, AND DEADLINES A. Loss Aversion B. Planning Fallacy C. Procrastination D. Deadlines E. Summary III. POSSIBLE ALTERNATIVE STRUCTURES A. Varying the Burden of Persuasion B. Depreciating the Value of the Claim C. The Guttel and Novick Proposal IV. ASSESSMENT OF THE INCREMENTAL APPROACH A. Advantages 1. Encourages Plaintiffs To File Early in the Limitation Period 2. Utilizes Empirical Data from Psychology 3. Treats Plaintiffs More Fairly 4. Tracks More Closely the Harms Caused by Delay 5. Minimizes Pressure for Nullification 6. More Consonant with the Fast Pace of Modern Life 7. More Consistent with Comparative Fault 8. Summary B. Potential Disadvantages 1. Handles Non-Monetary Remedies Inelegantly 2. Treats Plaintiffs Less Favorably Than the Status Quo 3. Equates the Plaintiffs' Delay with the Defendant's Fault 4. Fails To Distinguish Among Different Types of Claims 5. Forces Plaintiffs To Defer Other Tasks 6. Causes Premature Filings V. OTHER POTENTIAL APPLICATIONS A. Criminal Prosecution B. Rights of Limited Duration CONCLUSION INTRODUCTION

Time limits are a fundamental aspect of life. (1) Not surprisingly, law contains many of them. (2) Statutes of limitation are perhaps the most prominent example. A statute of limitation sets a deadline by which a claimant must file a lawsuit. If the deadline is missed, the right to a decision on the merits and eligibility for a remedy are forfeited. (3) As one scholar has observed, "[s]tatutes of limitation elevate the temporal element to a categorical role." (4)

Statutes of limitation are ubiquitous. Almost every civil claim and criminal prosecution must be filed within a prescribed period of time. This is true not only in the United States, but also throughout the world. (5) The crime of murder is the only common exception. (6) Statutes of limitation also have been around for a long time. Some sorts of time limits have been imposed on civil lawsuits and criminal prosecutions for millennia. (7) The direct ancestors of American statutes of limitation can be traced back for centuries. The first English statute of limitation for real property actions was enacted over five hundred years ago. (8) Subsequent versions grouped real property actions into categories to which time limits of various lengths were assigned depending upon the character of the right sued upon. (9) A later, more refined, and more comprehensive version of this approach, commonly known as the Limitations Act of 1623, included personal as well as real property actions. (10) That statute provided the model upon which most American statutes of limitation are based. (11)

Nearly all statutes of limitation possess the same essential structure: they classify claims into groups, they assign each group of claims a limitation period of fixed duration, and they extinguish claims not filed before the limitation period expires. The key feature of that structure is a long plateau that suddenly ends in a cliff. The value of the plaintiffs claim remains the same throughout the prescribed limitation period. When the limitation period expires, however, the value of the plaintiffs claim suddenly drops to zero. This "all-or-nothing" approach is utilized in virtually every statute of limitation. (12)

The present structure of statutes of limitation possesses at least three serious flaws. First, it allows plaintiffs to wait until deep in the limitation period before filing. In fact, a plaintiff who waits until the very last day of the limitation period suffers no penalty whatsoever, even if the limitation period is several years long. For example, if the limitation period is four years in duration, (13) then a statute of limitation structured in the typical manner treats delays in filing suit of one, two, three, or even four years minus one day exactly the same. The assumption implicit in such a structure--that nothing of importance changes with the passage of time until the end of the limitation period is reached--is counterintuitive and contrary to experience. (14) Among other things, most evidence deteriorates over time, (15) societal attitudes toward particular laws evolve, (16) and the passage of time erodes both the benefit to the plaintiff of prevailing on the claim and the corresponding deterrent effect on the defendant and others, assuming that prejudgment interest is not available. (17) These changes are gradual, not avulsive. They occur throughout the limitation period, rather than only at the end. (18) With each passing day the purposes of the limitation system are eroded, but the resulting interim harms to defendants, to the justice system, to society, and even to plaintiffs themselves, are not reflected in the penalty imposed upon plaintiffs. Consequently, the limitation system gives plaintiffs little incentive to avoid them.

A second problem with the present structure of statutes of limitation is that the penalty exacted is drastic. If the plaintiff misses just one deadline, the plaintiffs claim is extinguished. Late filing by as little as one day results in the loss of the entire value of the plaintiffs claim. There is no effort to match the severity of the penalty to the degree of the plaintiffs fault or to the gravity of the injury caused by the plaintiffs delay. This not only hurts plaintiffs with meritorious claims, it also undermines the policy of the substantive law on which their claims are based.

A defect in the present structure of statutes of limitation is related to its harshness. Because the penalty for missing the deadline is so drastic, courts feel pressure to create ad hoc exceptions or to distort legal doctrine in order to avoid harsh or unjust results. (19) This sort of nullification is seldom desirable, but it is especially troublesome in this context. Statutes of limitation already are problematic for lawyers. The challenges they present for non-lawyers are obviously even greater. (20) There is an enormous number of statutes of limitation (21) and there are many areas of uncertainty in their application, (22) such as the classification of claims (which renders the choice of the appropriate limitation period uncertain), (23) the implementation of the discovery rule of accrual (which makes it uncertain when the limitation period commences to run), (24) the judicial creation of doctrines such as equitable tolling (which make it uncertain whether the limitation period continues to run, or instead is paused, and if so, for how long it is paused), (25) and so on. Not surprisingly, statutes of limitation are frequently litigated. (26) Indeed, missing the statute of limitation is the largest single source of legal malpractice claims. (27) When courts are induced to twist facts or distort limitation of actions law in order to avoid harsh results in particular cases, this uncertainty is compounded. The consequences are, among other things, increased expenditure of judicial time in resolving statute of limitation issues, more errors in the judicial application of limitation of action rules, more lawyer and pro se litigant time invested in researching statute of limitation issues, more legal malpractice claims, more inadvertent forfeitures of claims, and greater disparities in the treatment of similarly situated litigants.

During the past century, many aspects of the legal system have been transformed. (28) The same, of course, could be said of virtually every field of human activity. (29) We now use telephones and email to communicate, automobiles and airplanes to travel, pharmaceuticals to treat disease, and so on. None of these inventions pre-dated 1850, much less 1623. By contrast, it is remarkable how little statutes of limitation have changed since the Limitations Act of 1623. Their essential structure has endured. To be sure, there have been refinements. Courts and legislatures have created intricate rules of accrual and tolling, and developed increasingly sophisticated ways of handling a myriad of issues, such as continuing wrongs. Whether these refinements and added complexities strengthen or weaken the ability of the limitation system to achieve its goals is debatable. What is striking, however, is that despite the scholarly attention lavished on statutes of limitation, (30) the soundness of their essential structure almost never has been questioned. (31) Why, during this time of extraordinarily rapid change, has this rather crude and arbitrary structure remained intact? In particular, why has the "all-or-nothing" approach--that is, the assumption that the value of the plaintiffs claim should remain flat throughout the limitation period, and then suddenly drop from 100 percent to zero overnight--persisted? When one considers the importance of statutes of limitation, and the persistence of their problematic structure during a period of rapid advance---not only in law, but also in nearly every other field of endeavor--a further question presents itself: Is this...