If a claim is assigned to someone else, does that restart the limitation period in Ontario?
Generally, no — assigning a claim to someone else, meaning transferring the legal right to pursue it, doesn't reset or restart the limitation clock under Ontario's Limitations Act, 2002. The assignee, the person or entity receiving the assigned claim, generally steps into the shoes of the original claimant and is bound by the same limitation period that already applied, running from the same original discoverability date, not from the date of the assignment itself.
This makes sense given the purpose of limitation periods: allowing a claim's timeline to reset simply by transferring it to someone new would let parties indefinitely extend deadlines through assignments, which would undermine the certainty limitation periods are meant to provide to potential defendants. This matters practically in situations like debt collection, where a creditor sells or assigns a receivable to a collection agency or another buyer; the purchaser of that debt generally can't sue on a limitation period any longer than the original creditor could have. Anyone acquiring an assigned claim should confirm how much of the original limitation period genuinely remains before assuming they have a fresh two years to act.
Key takeaways
- Assigning a claim generally doesn't restart the limitation clock under Ontario law.
- The assignee is generally bound by the same discoverability date as the original claimant.
- This prevents parties from resetting deadlines simply by transferring a claim to someone new.
- Confirm how much of the original limitation period remains before acting on an assigned claim.