No. 33




Questionable moments of the estonian legislation, on the examples of limitation period and unjustified enrichment

08 June 2016


RiTo No. 33, 2016

  • Rein Tiivel

    Professor Emeritus, Academy of Security Sciences

German law has been an important example in the formation of the modern Estonian civil law. However, the German legal regulations have not been mechanically copied, they have also been amended, taking into account the peculiarities of Estonia. It still seems that the in some cases the reasons for changes are not clear. For example, there are questionable moments in the legal regulation of expiry of the limitation period and unjustified enrichment, which complicate the understanding of these issues.

The General Part of the Civil Code Act says that after expiry of the claim, the obligated person may refuse to perform the obligation. But the Act gives no answer whether the expiry also terminates the claim or not. It has been stated in legal reference books that expiry does not terminate the claim. But the basis for such a statement has not been explained.

The confusion is made more complicated by the fact that the reclamation of what has been transferred to a third party to satisfy the expired claim is not regulated in the context of expiry. This is done in the Law of Obligations Act, under unjustified enrichment. Unjustified enrichment presumes the absence of justification or claim. This gives rise to the possibility that the Estonian legislator, influenced by earlier laws (the Baltic private Law Code, which was in force until 1940, and the Civil Code of the Estonian SSR), and unlike the German BGB and the proposals made by international work groups, has by default proceeded from the assumption that expiry of the limitation period terminates the claim.

If a person has received anything from another person for the performance of an existing or future obligation, the transferor may reclaim it from the recipient if the obligation does not exist or is not created or if the obligation ceases to exist later. In other words, what has been transferred to a third party can be reclaimed if there is no legal basis for the transfer. What has been transferred must not be reclaimed if the right to demand performance of an obligation had been expired by the moment of transfer. Neither the law nor legal reference books explain why what has been transferred on the basis of an expired claim cannot be reclaimed, and what the violation of this prohibition will bring along. If the wording of an Act is not clear enough, the will of the legislator can sometimes opened with the help of interpreting it. But whether a direct prohibition contained in the law can be mitigated by interpreting is more than questionable.

The regulation on expiry of the limitation period has been amended by a processual nuance: a court or some other body solving the dispute will take the expiry of a claim into account only upon the application of the obliged person. Keeping in mind the processual nature of this provision, one may ask whether the General Part of the Civil Code Act is the right place for it.

The claims based on public law and their expiry is regulated by other Acts. For example, the monetary claims and obligations arising from the Taxation Act terminate upon expiry. It means that if a tax official issues an expired tax claim to a tax debtor and the debtor satisfies it, the debtor may later request the return of the payment. But the law does not say if they have the right to demand the compensation of other damages accompanying the satisfying of tax claim on the basis of the Law of Obligations Act provisions on compensation for unlawfully caused damage.

In the interests of legal clarity, some proposals have been made, and if they were realised, the treatment of expiry of the limitation period would become integrated, being contained in one Act and approaching the recommendations of the international work groups. The regulation on unjustified enrichment in its turn would become free of the request for a basis or claim that makes it unclear.

Full article in Estonian