The Finnish Parliament in February 2003 approved a new Act on Statutory Limitations (ASL). The aim of the ASL is to harmonize the several different periods of limitation in the current Finnish legislation. But the ASL will be a general act (lex generalis) and as such will be superseded by any special act (lex specialis) containing special limitation periods. The ASL is expected to become effective during the first part of 2004.
The main amendment is the shortening of the general limitation period from 10 years to three years. The impact of the new rules will vary. This is because although the general limitation period will be substantially shorter, the triggering date will be later than under the present law. The 10 year limitation period begins from the date the payment obligation is created. According to the ASL, the three-year limitation period will begin from the due date or the date when the creditor is otherwise entitled to demand payment. A 10 year limitation period will continue to apply to various obligations not having a due date, including debts with no fixed due date. This 10 year period will begin from the creation of the obligation. The limitation period for enforceable judgements will be five years.
The ASL will also apply to debt that arises before the Act becomes effective. To the extent that the new limitation periods are shorter than those under the present law they will apply only after a transitional period of three years. Bank deposits and similar debt will not fall under the scope of the ASL.
All of the above-mentioned limitation periods can be extended. After an extension a new equally long limitation period will begin to run. Extension is achieved, among other things, by taking of legal action; by the parties agreeing on a payment schedule; by the creditor demanding payment or by the debtor making a payment to the creditor. After the period of limitation has lapsed without being extended, the debt ceases to exist. But the creditor still has the right to receive payment from the property pledged or mortgaged by the debtor as security for payment. Further, the creditor has the right to use the debt for set-off if such conditions were at hand before the debt ceased to exist, or if the opposite debts relate to the same legal relationship and the conditions for set-off are at hand.