Prescription of debts in Malta: when a debt becomes time-barred
In Maltese law the time limit for claiming a debt is called prescription. Under article 2107(2) of the Civil Code (Cap. 16), prescription is a mode of releasing oneself from an action when the creditor has failed to exercise the right for the time specified by law. The general period is thirty years (article 2143), but most everyday debts prescribe much sooner: one year for lodging, lessons and monthly wages (article 2147), eighteen months for retail goods and tradesmen's work (article 2148), two years for professional fees and for damages not arising from a criminal offence (articles 2149 and 2153), and five years for rent, interest, loans not made by public deed and commercial debts (article 2156).
Prescription does not cancel the debt on its own. The court will not apply it unless the debtor pleads it (article 2111), and for the short prescriptions the debtor must also declare on oath that he is not a debtor or does not remember whether the debt was paid (article 2160). A creditor can stop the clock by a judicial act served on the debtor, and any acknowledgement or part-payment by the debtor restarts it (articles 2128–2136).
This guide helps both creditors and debtors identify the right period, count it, interrupt it and raise or answer the plea of prescription.
Key facts
Deadline
The period runs from the day the action can be exercised (article 2137 of the Civil Code), is counted in whole running days, and if it ends on a Saturday or public holiday it is completed on the next working day (articles 2138–2139); an interrupting judicial act must be served within one month of the last day of the period (article 2130); the main periods are one year (article 2147), eighteen months (article 2148), two years (articles 2149 and 2153), five years (article 2156) and thirty years (article 2143).
What to do
Identify the type of debt. The period depends on what the debt is for, not on what the creditor calls it. Eighteen months apply to the price of goods sold by retail, the work and materials of tradesmen such as carpenters, masons and locksmiths, school fees, salaries, brokerage and the hire of movable things (article 2148 of the Civil Code). Two years apply to contractors' building work, doctors and pharmacists, and advocates, notaries, architects and other professionals (article 2149), and to damages not arising from a criminal offence (article 2153).
Five years apply to rent of urban or rural property, maintenance allowances, interest and other periodical payments, loans not made by public deed and other commercial debts (article 2156). Rent and ground-rent due to the Government prescribe in ten years (proviso to article 2156).
Find the start date. Prescription commences on the day the action can be exercised, whatever the personal condition of the creditor (article 2137). For an invoice this is normally the due date for payment; for instalments, each instalment has its own start date. For advocates, legal procurators and procurators ad litem, the period starts from the final decision or compromise of the lawsuit, or the end of the mandate (article 2150(1)).
Continued supplies or work do not prevent the short periods from running (article 2151(1)). However, if the debt is evidenced by an approved account or another written declaration by the debtor, the action prescribes only after five years from that document (article 2151(2)). A signed statement of account therefore changes the deadline.
Count the period correctly. Prescription is reckoned by whole days, not hours; days are running days and months are counted by the calendar (article 2138). It is completed at the end of the last day, but if that day is a Saturday or a public holiday, it is completed at the end of the next day that is not a Saturday or public holiday (article 2139).
Check whether prescription was suspended. It does not run between spouses, between parent and child under parental authority, or against minors and interdicted persons, save as otherwise provided (articles 2123–2124); note that the short prescriptions of articles 2147 to 2157 do run against minors (article 2159). It is also suspended during negotiations before a damages action and during a non-binding consumer ADR procedure (article 2125(d)–(e)).
Interrupt prescription as a creditor. The reliable method is a judicial act served on the debtor, usually a judicial letter, showing clearly that you intend to preserve your right (article 2128). It works even if the act is defective in form or filed in the wrong court (article 2129), but it must be served within one month of the last day of the period, or published in the Gazette if the debtor is absent from Malta (article 2130).
A lawsuit also interrupts prescription, but the interruption is lost if the action is withdrawn, deserted or dismissed, unless it is re-instituted within one month where the law allows (article 2132). After an interruption, the time already elapsed is lost and a new period starts (article 2136).
Watch for acknowledgement and part-payment. Prescription is also interrupted if the debtor acknowledges the creditor's right (article 2133) or makes a payment on account, personally or through someone acting for him (article 2134). An acknowledgement by the principal debtor also interrupts prescription against the surety (article 2135).
For debtors this is the most common trap: a small payment or an e-mail saying I know I owe you and will pay when I can restarts the full period. Once prescription is complete, it may be renounced expressly or tacitly by an act implying abandonment of the right acquired (article 2109). If you intend to rely on prescription, do not pay anything or admit the debt before taking advice.
Raise the plea of prescription as a debtor. The court cannot apply prescription of its own motion (article 2111 of the Civil Code); you must raise it. You may do so at any stage of the proceedings, even on appeal (article 2112), but it is best raised in the first reply: in the note opposing an article 166A judicial letter (article 166A(3) of Cap. 12), the reply at the Small Claims Tribunal, or the sworn reply in court.
The Small Claims Tribunal and the Consumer Claims Tribunal decide most issues in equity, but prescription is always decided according to law (article 7(1) of Cap. 380; article 21(1) of Cap. 378), and a decision on prescription can always be appealed (article 8(2)(b) of Cap. 380; article 22(2)(b) of Cap. 378).
Be ready to take the oath for short prescriptions. The prescriptions in articles 2147, 2148, 2149, 2156 and 2157 are not effective unless the party pleading them declares on oath, during the case, that he is not a debtor or does not remember whether the thing has been paid (article 2160(1)). These short periods are based on a presumption of payment, so a debtor who admits never having paid cannot rely on them.
Heirs of the debtor must declare that they do not know that the thing is due (article 2160(2)). In claims for rent or ground-rent due to the Government, a party who declares on oath that he is not a debtor must also give reasons (article 2160(3)). The two-year prescription for damages in article 2153 is not listed in article 2160.
Check the long and special periods. All actions, real, personal or mixed, are barred after thirty years (article 2143); this is the outer limit for debts that do not fall under a shorter rule, such as a loan made by public deed, which is excluded from the five-year rule in article 2156(e)–(f). Damages arising from a criminal offence follow the prescription of the criminal action under the Criminal Code (article 2154).
Prescription cannot be renounced in advance, and a contract cannot fix a period longer than the law (article 2108(1)). Other laws may set their own periods: for example, a consumer's two-year liability period for faulty goods under article 78 of the Consumer Affairs Act (Cap. 378) is suspended during negotiations with the seller.
Decide what to do next. As a creditor close to the deadline, file and serve a judicial letter at once, then sue: before the Small Claims Tribunal up to €5,000 (article 3 of Cap. 380), or by an article 166A judicial letter for a liquidated debt up to €25,000. Claim 8% legal interest (article 1139 of the Civil Code), which on a non-commercial debt runs from the judicial intimation (article 1141(2)).
As a debtor, write down the dates of the last invoice, the last payment and any letters received, and compare them with the applicable period. If the debt is prescribed, do not pay or sign an acknowledgement; plead prescription in your first reply and be prepared to take the oath where article 2160 applies.
What to watch out for
- Applying the five-year rule to everything. Many debts, such as retail goods and tradesmen's work, prescribe in eighteen months (article 2148), and professional fees in two years (article 2149).
- Paying a small amount on an old debt. A payment on account interrupts prescription and starts a new period (articles 2134 and 2136).
- Waiting for the court to notice prescription. It must be pleaded by the debtor (article 2111 of the Civil Code).
- Pleading a short prescription without being ready to swear that you are not a debtor or do not remember paying (article 2160). Without the oath the plea fails.
- Relying on reminders by e-mail as a creditor. Only a judicial act served on the debtor, an acknowledgement or a part-payment interrupts prescription (articles 2128, 2133–2134).
- Filing the judicial letter on the last day without service. Service must follow within one month of the end of the period (article 2130).
- Signing a statement of account. An approved account or written declaration extends the short periods to five years from its date (article 2151(2)).
Legal basis
Frequently asked questions
How long before a debt expires in Malta?
It depends on the debt. Under the Civil Code, retail purchases and tradesmen's work prescribe in eighteen months (article 2148), professional fees and civil damages in two years (articles 2149 and 2153), rent, loans not by public deed and commercial debts in five years (article 2156), and other actions in thirty years (article 2143).
Does a prescribed debt disappear automatically?
No. The court cannot apply prescription of its own motion (article 2111 of the Civil Code); the debtor must plead it, at any stage, even on appeal (article 2112). For the short prescriptions, the debtor must also declare on oath that he is not a debtor or does not remember paying (article 2160).
Does a payment restart the prescription period?
Yes. A payment on account by the debtor or someone acting for him interrupts prescription (article 2134 of the Civil Code), and so does any acknowledgement of the debt (article 2133). The time already elapsed is then lost and the period starts again (article 2136).
Does a reminder letter or e-mail stop prescription?
No, not on its own. Prescription is interrupted by a judicial act served on the debtor showing the intention to preserve the right (article 2128 of the Civil Code), such as a judicial letter, by a lawsuit, or by the debtor's acknowledgement or payment. An ordinary letter is useful only if the debtor replies admitting the debt.
What is the prescription period for unpaid rent in Malta?
Five years for actions for payment of rent of urban or rural property (article 2156(c) of the Civil Code). Where the rent is due to the Government of Malta, the period is ten years (proviso to article 2156). Each monthly payment prescribes separately from its due date.
How long does a lawyer or doctor have to claim fees?
Two years (article 2149 of the Civil Code). For advocates and legal procurators, the period runs from the final decision or compromise of the lawsuit, or the end of the mandate (article 2150(1)). For advice and judicial letters not connected with a pending suit, it runs from the day the service was given (article 2150(3)).
What is the time limit for a damages claim in Malta?
Two years for damages not arising from a criminal offence (article 2153 of the Civil Code). Damages arising from a criminal offence follow the prescription rules of the Criminal Code (article 2154). Prescription is suspended while the parties or their insurers negotiate before the case starts (article 2125(d)).
Why must I take an oath to rely on prescription?
The short prescriptions in articles 2147, 2148, 2149, 2156 and 2157 rest on a presumption that the debt was paid. Article 2160 therefore makes them ineffective unless the debtor declares on oath that he is not a debtor or does not remember whether the debt was paid.
Can a contract extend the prescription period?
No. Prescription cannot be renounced beforehand and the parties cannot fix a period longer than the law (article 2108(1) of the Civil Code). After it is complete, the debtor may renounce it, expressly or tacitly, for example by paying or acknowledging the debt (articles 2108(2)–2109).
Does a signed account statement change the deadline?
Yes. Where supplies, work or services are evidenced by an approved account or other written declaration of the debtor, the short periods in articles 2147 to 2150 are replaced by five years from the date of that document (article 2151(2) of the Civil Code).
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