Banking Liability and Interruption of Prescription in Belgian Law: Lessons from a Court of Appeal Decision

A decision by the Mons Court of Appeal[1] allowed us to review the notion of interruption of prescription, a fundamental principle in Belgian civil law. This case illustrates the rules applicable to the starting point of prescription and the conditions necessary to interrupt it.

The Starting Point of Prescription in Belgian Law In contractual matters, the starting point of prescription is set by common law: it begins to run as soon as the event giving rise to the obligation occurs, that is, from the day the contractual obligation should have been performed.

For actions in non-contractual liability, Article 2262 bis, § 1 of the Civil Code provides that the five-year prescription period begins “from the day following the day on which the injured person became aware of the damage or its aggravation and the identity of the responsible person.”

Case law specifies that this knowledge must be actual, not merely presumed. Moreover, an injured person is not required to know all the consequences of their damage for the prescription to begin to run.

Prescription, whether contractual or non-contractual, can be shortened by agreement, which is generally provided for in general banking conditions. In such a case, the computation of the prescription period begins when the disputed banking transaction occurs.

The Context of the Case: Purchase of Fortis Shares and Granting of Loans In the case examined by the Mons Court of Appeal, an investor had acquired a significant number of Fortis shares in 2007-2008 and subscribed to three credit facilities. He subsequently blamed the bank for various failings related to both the granting of the loans and the investment in the shares.

During a procedure, he attempted to hold the bank liable for two of the loans via summary conclusions, but the Court declared these new claims inadmissible.

Faced with this rejection, the investor filed a new action to hold the bank liable. However, the bank invoked the five-year prescription period, while the investor argued that the prescription had been interrupted by the filing of his summary conclusions.

Legal Principles Recalled by the Court The Mons Court of Appeal examined the arguments of both parties and recalled several key principles:

• Interruption of Prescription: According to Article 2244 of the Civil Code, a formal notice, such as a summons, is necessary to interrupt the prescription. A request made by conclusions can also produce this interruptive effect, provided that it aims to recognize a right.
• Virtually Contained Claim: According to case law, a claim is virtually included in an initial claim if it is based on the same facts and has a close and obvious relationship with the subject of the main claim. The defendant must reasonably expect it to be subsequently formulated.

Court’s Conclusion In this case, the Court found that the disputed loans were distinct and that the claims concerning two of them were not virtually included in the initial claim. Therefore, the prescription was not interrupted, and the action was declared time-barred.

[1] Mons, 21 sept. 2020, inédit