Gov. DeWine Signs a New Bill into Law that Changes Two Big Items for You

Last week, Governor DeWine signed Senate Bill 13 into law. Having passed the House Civil Justice Committee, the Senate Judiciary Committee, the House of Representatives and the Senate — all unanimously — the Governor’s approval was all but a foregone conclusion. The bill does two major things that may impact how you run your business. Your attorney will probably tell you about the first, but will probably not tell you about the second. The Entrepreneurial General Counsel will tell you about both.

The first is that the time period in which to file a lawsuit (a/k/a “statute of limitations”) based on breach of contract has been shortened. For written contracts, it was 8 years (and before that, 15 years), but will now be 6. For oral contracts, it was 6 years but will now be 4. And for consumer transactions (one that is primarily for “personal, family or household purposes”), there is a new limit of 6 years. So, if you have some really old accounts receivable, the time to move on them is now, before the statute of limitations is reduced.

The second item of which you need to be aware is that the time period to sue an attorney for malpractice has been shortened. Previously, the general rule was that the deadline was 1 year from the date the client knew or should've known of the malpractice or the date that the attorney/client relationship was terminated, whichever is later. Now, the rule will be 1 year after the malpractice occurs or no later than 4 years, if the client exercises reasonable care and diligence to discover that malpractice occurred but fails to do so within the 1 year limit. So, in essence, this creates a statute of repose (an absolute bar to bringing a claim) for legal malpractice, something that did not previously exist in Ohio. Previously, a claim could have been brought 20 or 30 years after the fact, so long as discovery of the malpractice did not occur until then. Now, there will be an absolute bar, regardless of date of discovery, so attorneys can breath easy.

For a full text of the bill, click here.

The new law goes into effect on June 14th.