Standstill agreements to suspend or extend limitation

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Standstill agreements to suspend or extend limitation
  • Suspending or extending limitation—what is the difference and why is it important?
  • Using a limitation suspension agreement—a practical illustration
  • Using a limitation extension agreement—a practical illustration
  • Should you suspend or extend limitation?
  • Using Precedent standstill agreements—be sure as to what you are drafting

Standstill agreements to suspend or extend limitation

As observed by Coulson J in Russell v Stone, ‘standstill agreements have become much more common than they ever used to be’ and yet, as that case demonstrated, they are often far from straight forward agreements to negotiate and document. This Practice Note considers certain issues relating to the use of standstill agreements and provides links to precedent agreements.

For details of the issues that arose in Russell, see News Analysis: In brief: Claim not statute barred despite standstill agreement being poorly drafted (Russell v Stone (trading as PSP Consultants)).

For guidance on limitation more generally, see Practice Note: Limitation Act 1980—general application and related content.

Suspending or extending limitation—what is the difference and why is it important?

There is an important distinction between on the one hand suspending the running of time for a defined period, and on the other hand extending the period of limitation to a specific date:

  1. when the running of time is suspended—the unexpired portion of the limitation period as at the date of the agreement will typically re-commence after the period of suspension ends

  2. when the limitation period is extended—the limitation period will typically end on the date when the period of extension ends. This will usually be a date later than when the original limitation period was due to end, however this type of agreement

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