Hello, this is Attorney Bae Gi-hyung from Cheong Chul Law Firm.

Claims have a statute of limitations, which means they will expire if not exercised for a certain period. This is because the statute respects the state of not exercising rights and reflects the intent not to protect those who do not exercise their rights.

The duration of the statute of limitations varies for each claim, and especially the construction payment claims, which are often problematic in practice, have a 3-year short statute of limitations. Therefore, if the limitation period is calculated even a little incorrectly, there is a risk of losing the claim.

Of course, the Civil Act stipulates various reasons to suspend the running of the statute of limitations, one of which is the basic act of exercising a right, known as a 'claim'.

However, can it be seen that the statute of limitations is also suspended when one does not exercise the claim itself but seeks confirmation of a 'lien' based on that claim?

[Question]

If a lawsuit for confirming a lien is filed, will the statute of limitations for the secured claim be suspended?

[Answer]

Article 326 of the Civil Act states, “The exercise of a lien does not affect the running of the statute of limitations of the claim.” Therefore, it appears that even if one files a suit regarding the lien, the statute of limitations for the claim will not be suspended.

However, the Supreme Court's ruling on October 31, 2024 (2024Da241152) states, “The reason for the existence of the statute of limitations system is to respect the enduring state of facts and not to protect those who are dormant over rights. In particular, regarding statutes of limitations, the latter meaning is strong, so when a right holder asserts that they are not dormant over their right in court, it is a reason for suspension of the limitation. Claims made in court that are reasons for suspension of the statute of limitations include not only the claims for performance or a declaration of the right itself that is subject to the statute of limitations but also claims made in the form of a lawsuit based on the fundamental legal relationship from which the right arises, or claims regarding subsequent legal relationships formed by or including that right, which can be seen as expressing an intent to exercise rights. Therefore, it is reasonable to see this as included in the reasons for suspension of the statute of limitations, and it need not be examined in accordance with the scope of res judicata of the court claim.”

The original judgment stated, “The construction payment claims that the plaintiffs have against Company 1 regarding this building apply a limitation period of 3 years under Article 163(3) of the Civil Act. The plaintiffs are deemed to have been able to exercise the construction payment claims around February 27, 2019, July 18, 2019, and October 30, 2019, but there is no evidence to suggest that they suspended the statute of limitations by claiming the payment of construction costs or applying for seizure or provisional disposition before 3 years elapsed from each date. The plaintiffs argue that by filing this lien confirmation lawsuit they have made statements regarding the secured claims that constitute the basis for the establishment of the lien, thus resulting in the effect of suspension of the statute of limitations, but considering that the exercise of a lien does not affect the running of the statute of limitations of the claim (Article 326 of the Civil Act), the plaintiffs’ argument cannot be accepted.” This seems to be because it was judged that Article 326 of the Civil Act takes precedence over Article 168 of the Civil Act, which considers the reasons for suspension of the statute of limitations.

Ultimately, according to the Supreme Court's interpretation, while exercising a lien in a manner other than through litigation does not suspend the statute of limitations of the secured claim according to Article 326 of the Civil Act, when seeking confirmation of the lien through a lawsuit, Article 168 of the Civil Act applies, allowing for the suspension of the statute of limitations.

Especially considering that a significant portion of disputes related to liens arise from construction payment claims, it’s important to note that one should not only exercise and maintain the lien but also file a lawsuit for confirmation of the lien or take separate measures to suspend the statute of limitations on the claim before the 3-year statute of limitations expires.

Attorney Bae Gi-hyung has accumulated extensive experience in civil litigation and enforcement while working with the Defense Acquisition Program Administration and a major law firm’s construction/real estate team, which strengthens his ability to strategically resolve cases by exploring various ways to collect claims before the litigation stage.

Cheong Chul Law Firm consists only of attorneys from major law firms in Korea, such as Kim & Chang, Lee & Ko, Bae, Kim & Lee, and Shin & Kim. The firm responds to cases with a team of specialized attorneys related to the matter rather than a single attorney. Cheong Chul provides comprehensive solutions for business as a whole rather than just addressing specific issues, ultimately focusing on achieving the client's goals. If you need help in achieving your goals, please feel free to contact Cheong Chul.