No Delay May: Getting Time on Your Side with Suspension Period and Standstill Agreements  

Standstill agreements toll limitation periods and other timelines under enactments such as the Limitations Act or the Expropriation Act. Standstill agreements are generally entered into prior to the commencement of litigation to pause or extend statutory deadlines, encourage settlement discussions, or allow parallel processes to conclude, without prejudicing the parties’ legal rights. 

To extend a limitation period under sections 7 and 9 of the Limitations Act, a standstill agreement must be in writing and signed by the affected party (or their agent). Lawyers should draft standstill agreements to explicitly toll all relevant procedural timelines and limitation periods.

Suspension Period Agreements

Suspension period agreements are made pursuant to Rule 4.33(5) of the Alberta Rules of Court after litigation has commenced, to prevent dismissal for delay pursuant to Rule 4.33 by pausing the three-year period during which a significant advance in the action must occur. Suspension period agreements can also contain standstill provisions to toll other procedural timelines and limitation periods, such as those related to inordinate delay in Rule 4.31.

Suspension period agreements must be explicit, meaning the parties’ intention to suspend proceedings for the purpose of computing delay must be clear, definite, and not left to inference. Courts have been unwilling to find an implied suspension period agreement (for example, from conduct such as settlement discussions or ongoing negotiations). Best practice is for the agreement to be in writing and signed, to clearly evidence the parties’ intentions and to avoid later disputes.

Suspension period agreements must identify:

• the parties to the agreement;
• the commencement date of the agreement; and
• the essential terms of the agreement, including the specific procedural timelines and limitation periods to be tolled and the specific date or event on which the agreement will terminate.

The party requesting the suspension period agreement must give written notice of the agreement and its terms to all other parties to an action.

Court-Ordered Suspension Periods

Agreement with an adverse party is not the only route to preserving time. Under Rules 4.33(6) and (7) of the Alberta Rules of Court, a party can serve a written proposal on an adverse party, setting out a proposed suspension period and requesting that the suspension period not be included in computing the three-year period under Rule 4.33. The adverse party then has two months to agree or disagree with the proposal. Under Rule 4.33(9), a party may apply for a court order setting out a suspension period to be excluded from the computation of time under Rule 4.33. Importantly, a court-ordered suspension period can be sought regardless of whether the applicant first seeks agreement under Rule 4.33(5) or serves a proposal on the adverse party under Rules 4.33(6) and (7).

Resources

For reference, a sample suspension period and standstill agreement can be viewed here, along with drafting notes for additional guidance. The sample agreement is provided for general information only and does not constitute legal advice. Lawyers are responsible for ensuring an agreement is tailored to their clients’ needs and complies with all applicable legal requirements.

The Law Society of Alberta offers a wealth of proactive and practical resources, including Limitation Dates, Other Deadlines and Diary Systems, What to Look for in Limitations Software, and Key Considerations for Establishing Effective File and Practice Management Systems. Practice support is also available to Alberta lawyers through the Law Society’s practice management consultation program. Lawyers can submit a request for a one-on-one meeting with Practice Management Counsel here. 

Employ Tools Today to Avoid Claims Tomorrow 

Standstill agreements, suspension period agreements, and court-ordered suspension periods are powerful, practical risk management tools. Used proactively and correctly along with effective diarization and file review systems, these tools will empower Alberta litigators to advocate more effectively for their clients while reducing the number of preventable, delay-related professional negligence claims.

ALIA would like to thank JSS Barristers for their contribution to this ALIAdvisory and the sample suspension period and standstill agreement.

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