New Precedent on Limitation Periods in a Consumer Insurance Contract: Different Tribunals’ Criteria

In re “Acosta, Iara Magalí c/ Allianz Argentina Compañía de Seguros S.A. s/ ordinario”, filed with the Argentine Commercial Courts, the plaintiff claimed compensation from the insurer for damages suffered as a consequence of the total destruction of the insured vehicle. The defendant contended that the limitation period for bringing the claim had expired, basing his defense on the one-year period provided for by article 58 of the Insurance Law (“IL”). The first instance judge admitted such defense and his decision was challenged by the plaintiff, who argued on the application of the three-year limitation period provided for by the Consumer Defense Law (“CDS”). On March 11, 2020 Tribunal B of the Argentine Commercial Court of Appeals rejected the plaintiff’s defense.

Firstly, the decision recalled that the position of Tribunal B is that both the IL and the Insurance Companies’ Law 20,091 prevail over the CDL. It also held that the limitation period provided for by article 58 of the IL considers, among other matters, the specific economic risk that affect this kind of contracts. Therefore, such limitation period cannot be construed as having been amended by CDL.

The Court of Appeals also stated that consumer protection laws aim to control pre-formulated contractual clauses on which the Argentine State does not have an intervention, and this is not the case in insurance contracts where the Argentine Superintendence on Insurance intervenes as the true control authority of insurers and reinsurers. Finally, the Court of Appeals added that the new text of article 50 of CDL reflects such solution, by deleting any reference to judicial actions and establishing a three-year limitation period applicable only to the administrative sanctions that derive from the CDL. In this way, the Tribunal ratified its historical criteria and confirmed the first instance ruling.

As mentioned before, the Tribunal B criterion is opposed to the ruling of March 5, 2020 by Tribunal F of the same Court of Appeals. In the latter, Tribunal F applied the general five-year period established in article 2560 of the Argentine Civil and Commercial Code (the "CCCN" after its acronym in Spanish) to a similar situation, on the basis that consumer protection laws set minimum standards that other specific laws cannot overrule (see https://www.marval.com/publicacion/plazo-de-prescripcion-de-5-anos-en-un-contrato-de-seguro-de-consumo-13600&lang=en)

As of the date of publication, in both cases the term to file the Federal Extraordinary Appeal to have the case decided by the Argentine Supreme Court of Justice is still open, so the Court of Appeals’ rulings are not yet final.

The dispute over the period of limitation applicable to claims arising from a consumer insurance contract seemed to have been brought to an end with the amendment to article 50 of the CDL by Law 26,994 passed in 2014. However, it appears that this is not the case.

The former wording of article 50 of the CDL, given by Law 26,361, established that judicial and administrative actions and sanctions arising from this law shall expire within a term of three (3) years. When other general or special laws establish other limitation periods, that most favorable to the consumer or user shall be applied. The limitation period shall be interrupted by the commission of new violations or by the commencement of administrative or judicial proceedings. In addition, article 58 of the IS establishes that actions based on the insurance contract expire within a period of one year, calculated from when the corresponding obligation is enforceable.

Under the former wording of article 50 of the CDL, while a sector of academia and part of the case law maintained the application of the three-year limitation period in claims arising from consumer insurance contracts, other held that, because of the specificity of the IL as regards the CDL, the insurance regulation should prevail over the consumer regulation. Therefore, the one-year limitation period should be applied even to insurance contracts also classified as consumer contracts. This is the position taken by the Argentine Supreme Court of Justice in re “Buffoni”, where the Supreme Court considered that the IL, being specific to insurance, prevails over the CDL –even when the CDL was passed after the IL– because the CDL is a statute of a general nature (Fallos: 337:329) (see https://www.marval.com/publicacion/la-oponibilidad-de-las-exclusiones-de-cobertura-al-tercero-damnificado-en-el-seguro-de-responsabilidad-civil-automotor-11811&lang=en).

Law 26,994, passed on October 1, 2014, amended article 50 of the CDL as follows: Sanctions arising from this law expire within a term of three (3) years. The limitation period is interrupted by the commission of new violations or by the commencement of administrative proceedings. The reference to judicial and administrative actions was deleted from this new wording rule. Therefore, the three-year limitation period became applicable only to sanctions that derive from the CDL.

At first sight, it could be thought that the amendment introduced by Law 26,994 had brought a final solution to the limitation period in the consumer insurance contracts dispute. Since the CDL does not have a limitation period for judicial actions, the solution must be sought in the specific legislations, such as the IL.

In this regard, Tribunal B of the Argentine Commercial Court of Appeals had already ruled in this respect, applying the one-year limitation period based on the IL, in re ”Agut, Fernando Martín c/ Caja de Seguros S.A. s/Ordinario” of August 4, 2017. Tribunals D and E from the same Court of Appeals have also supported the application of one-year limitation periods to claims arising from consumer insurance contracts (in re “Consumidores Financieros Asociación Civil p/ su Defensa c. La Meridional Compañía Argentina de Seguros S.A. s/ ordinario” of October 18, 2016; “Maciel, Teresa América c/ Caja de Seguros S.A. s/ ordinario” of April 16, 2019, respectively).

It is foreseeable that, after the court recess due to the pandemic, any of the interested parties in these cases will file a Federal Extraordinary Appeal to have the cases finally decided by the Argentine Supreme Court of Justice. The parties can also file a petition for a plenary judgment, so that the Argentine Commercial Court of Appeals issues a decision that unifies the different criteria and puts an end to this legal uncertainty.