Austrian Supreme Court on civil statute of limitations in the shadow of criminal proceedings

Facts

In 2004, shares of federal housing associations ("Wohnbaugenossenschaften") held by the Republic of Austria were sold to a private consortium. This sale led to years-long criminal proceedings, at the conclusion of which even the former Minister of Finance was sentenced (commonly known as the "BUWOG-affair"). 

In the case at hand, the claimant alleged that the bidding process in 2004 had been influenced by unlawful and culpable acts. Consequently, had this not been the case, the contract would have been awarded to the bidding companies from the plaintiff's group. On 27 February 2020, claimant filed a claim for partial damages in the amount of EUR 1m.

The first-instance court dismissed the claim. Referring to the indictment having been filed by the Public Prosecutor's Office in June 2016, it argued that, due to the three-year statute of limitations, the claim was time-barred. However, both the Court of Appeals and, subsequently, the OGH allowed the claim to proceed, rejecting the argument that the statute of limitations applied.

General principles regarding the statute of limitations

For the statute of limitations to begin, the damaged party must be aware of the damage, the party that caused the damage, the causal connection between these two, as well as the circumstances establishing culpability. The key standard is whether the damaged party knows the facts well enough to file a coherent claim with specific factual allegations (objective knowledge). By contrast, "pure speculation" or a mere subjective belief is not sufficient.

The damaged party must not remain passive when establishing the relevant aspects. It has a duty to make inquiries – albeit not excessively. If it can ascertain the necessary conditions for a viable claim without undue effort, the statute of limitations begins at the point when the damaged party would have acquired knowledge of the relevant aspects had it made reasonable enquiries.

As a side note: Austrian civil law also provides for a thirty-year statute of limitations if the claim for compensation results from a criminal offence committed against the damaged party. However, such offence was not alleged in the criminal proceedings.

Regarding pending criminal proceedings

The limitation period begins to run even during pending criminal proceedings; it is not postponed until their conclusion. While the damaged party has a duty of inquiry – such as monitoring proceedings or seeking file access – the Supreme Court has established in previous decisions that awaiting key results (e.g. expert opinions or clarification of responsibility) does not breach this duty. Requiring a civil action before such clarification would be uneconomical and contrary to the purpose of limitation law. There is no obligation (either general or in individual cases) to "overtake" the Public Prosecutor's Office and to file a claim before the trial begins.

Events such as an expert opinion or a confession may be sufficient to trigger the running of the limitation period. Whether the prosecutor's indictment – which sets out the time, place and circumstances of the alleged offence – suffices, depends on the individual case. 

Furthermore, following the termination of criminal proceedings, the damaged party is entitled to a reasonable period of consideration.

Application to the case at hand

Applying the considerations demonstrated above, the Court of Appeals and the OGH argued that:

• The indictment relied on "evaluative conclusions" drawn from a complex chain of circumstantial evidence.
• At the time the indictment was filed, there was no "overwhelming" evidence or other reliable findings, such as a confession, regarding the facts on which the civil claim was based. File notes, along with an expert opinion and the results of telephone surveillance referred to in the indictment, merely served as a basis for the conclusions reached by the Public Prosecutor's Office.
• In individual cases, it is reasonable for the claimant to wait until the indictment becomes legally final and binding, and then allow a reasonable period for reflection and preparation before filing such a complex and cost-intensive claim.
• The claimant was an outside third party and had no direct knowledge of the (criminal) unlawful conduct or any other special sources of information or knowledge of internal matters.
• The criminal proceedings did not (directly) concern the damage caused to the claimant. 

Hence, by filing the claim after the trial had been conducted but before the judgments were pronounced, the statute of limitations did not apply and the civil proceedings may now continue.

Concluding remarks

The OGH's decision underscores the pivotal role of careful and ongoing assessment of criminal proceedings – particularly in complex white-collar crime cases, where the line between sufficient "objective knowledge" and mere speculation is a fine one. Only a thorough and timely knowledge of the criminal file enables one to argue convincingly whether the statute of limitations has been triggered or whether the claimant is still entitled to await further developments.

author: Oliver M. Loksa, Laura Benczak