On 1 August 2025, the Property Law Act 2023 (Qld) (PLA 2023) amended section 10 of the Limitation of Actions Act 1974 (Qld), halving the limitation period for a cause of action arising from a Deed from 12 years to 6 years. This only applies to a Deed entered into on or after 1 August 2025.
The new limitation period of 6 years for an action arising from a Deed brings it in line with that for an action under contract in Queensland, introducing parity between the two types of agreements on this point and simplifying the determination of when a limitation period expires. However, this amendment does make Queensland an outlier to the otherwise largely uniform 12 year limitation period for actions pursuant to a deed across other Australian states (except Victoria and South Australia, where the limitation period for an action under a deed is 15 years).
Parties who have previously utilised Deeds in Queensland to obtain longer limitation periods, often government entities and principal contractors on projects of significant value or higher risk, will no longer be able benefit from longer statutory limitation periods on deeds entered into from 1 August 2025. However, the PLA 2023 amendments does not affect the freedom of the parties to contract out of the shorter 6 year statutory limitation period applying to a cause of action arising from a Deed. As a result, consultants might now find principals (and even potentially government entities despite the government passing the amendment) seeking to insert a clause into a Deed to extend the limitation period to the previous 12 years.
While agreeing to extended limitation periods is often the commercial reality for parties, such as consultants, who contract with government entities and principal contractors on large projects, it is important for the party assuming the additional potential liability to consider the insurance implications arising from accepting such terms. Given most professional indemnity insurance policies contain exclusions for contractually assumed liabilities - that is, any liability under contract (including a Deed) that is greater than the civil liability arising under the common law or legislation - accepting contractual terms that provide extended limitation periods may trigger such policy exclusion and leave the party uninsured for the additional liability they have assumed.
The insurance implications of entering into a contract that provides for extended limitation periods over and above the 6 years provided by statute should, therefore, be front of mind and parties ought to closely review their insurance policies to determine if agreeing to such provisions will trigger any exclusions prior to entering into such contracts.
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.
