What is 'Continuing Undertaking Rule'

Continuing undertaking rule is a legal rule that temporarily stops the statute of limitations from moving to expiry for claims of negligence. The continuing undertaking rule is a feature of tort law, and the temporary stoppage is referred to as a “toll.”

BREAKING DOWN 'Continuing Undertaking Rule'

Continuing undertaking rule is also called the continuous treatment rule. Courts may place a limit on the amount of time that can pass between when an individual or business experiences a loss or damage and when that individual or business files a claim. This limits the filing of a lawsuit if too much time has passed.

The continuing undertaking rule typically applies to situations in which there is a long-term relationship between the claimant and the defendant. This is because it can be difficult for the future claimant to determine that negligence has occurred until after relationship has concluded. The statute instead will begin when the claimant discovers that an injury or damage has occurred (actual discovery) or when the claimant had enough information to determine that it should have discovered that an injury or damage had occurred (constructive discovery).

A major reason that the continuing undertaking rule exists is that defendants are more likely to know that they are acting in a negligent manner than claimants are to discover it. In some cases, there may actually be multiple incidents of negligence spread over a period of time.

For example, a company uses the services of a law firm for a number of years during contract negotiations over a merger. The statute of limitations is paused during this time because the relationship between the lawyer and the firm is ongoing. If the company later discovers that it was not provided the proper legal advice, it may take the law firm to court. The statute of limitations is extended because the company did not realize that there was negligence until after business was concluded.

Continuing Undertaking Rule and Healthcare

In the context of healthcare, the continuing undertaking rule is designed to postpone the starting date of the statute of limitations, until a medical professional has finished rendering treatment for a particular illness or condition. The rule is actually meant to give an opportunity to the doctor to correct any mistakes that may have occurred during the initial treatment, before the victim starts a lawsuit.

For instance, consider a negligent surgery that was performed on Jan. 1, 2010. Afterwards, the surgeon does series of follow up surgeries on the first of March, June and September of the same year to correct his mistakes. The surgeon then does a review of the surgeries on Oct. 1, 2010. In case the surgeon has not been able to correct his mistakes, then the statute of limitations for the patient will begin from October 1, 2010, not January 1, 2010.

RELATED TERMS
  1. Statute Of Limitations

    A statute of limitations is a law which sets the maximum time ...
  2. Statute of Frauds

    A statute of fraud is a legal measure wherein certain types of ...
  3. Comparative Negligence

    Comparative negligence is a principle of tort law.
  4. Contributory Negligence

    Contributory negligence is the plaintiff's failure to demonstrate ...
  5. Anti-Indemnity Statute

    An anti-indemnity statute protects sub-contractors from risks ...
  6. Fiduciary Negligence

    Fiduciary negligence is professional malpractice when a person ...
Related Articles
  1. Financial Advisor

    Lawsuits Aim to Overturn DOL's Fiduciary Rule

    Five lawsuits have aimed to overturn the DOL fiduciary rule introduced in 2016.
  2. Insights

    The DOL Fiduciary Rule Explained

    The Department of Labor (DOL) fiduciary rule expanded the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA), but was vacated by a Federal ...
  3. Financial Advisor

    Indie BDs: Trump Should Drop the Fiduciary Rule

    A majority of independent broker-dealers want Trump to repeal the fiduciary rule, a recent survey reveals.
  4. Insights

    So, You Want to Take Your Broker to Court

    Find out how to file a claim with your broker, and what you can expect throughout the process.
  5. Financial Advisor

    The Highest-Paying Medical Careers

    Discover the highest-paying jobs in the medical field and what it takes to begin a career in one of the world's most secure industries.
  6. Personal Finance

    Financial Rules of Thumb: Harmful or Helpful?

    While financial rules of thumb can be helpful at times, they can also be dangerously wrong.
  7. Tech

    Advisor Fintech Tools Aren't Waiting for Trump

    The new U.S. president might bring big change to financial regulation after he takes office. Here's how the financial technology sector is dealing.
  8. Financial Advisor

    How Advisors Can Plan for Fiduciary Rule Changes

    The DOL's new fiduciary rule will soon become law. Here's how advisors should start planning for its far-reaching impact.
  9. Personal Finance

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
  10. Retirement

    How IRA Rollovers May Be Affected by DOL Fiduciary Rule

    The fiduciary rule will protect investors in some ways, but may end up hurting them in another way.
RELATED FAQS
  1. Can the IRS audit you after a refund?

    Learn how the U.S. Internal Revenue Service (IRS) can conduct a tax audit even after a taxpayer was issued a tax refund in ... Read Answer >>
  2. What is the Rule of 72?

    The "Rule of 72" determines roughly how long an investment will take to double, given a fixed annual rate of interest. It ... Read Answer >>
  3. What is the downtick-uptick rule on the NYSE?

    To ensure orderly markets, the New York Stock Exchange (NYSE) has a set of restrictions that it can implement when experiencing ... Read Answer >>
Trading Center