As far as I know, a lawyer can take 36 months before his claim expires. I don't think it's wise to deliberately lose a case, because besides the 1600€ you also have to pay for everything around it. I don't believe you'll get that back.
The wording of my response to the lawsuit is as follows: "Therefore, I see here poor performance or defective service (§611 Baugesetzbuch) by the plaintiff. The defendant side has suffered damage due to the poor performance, whereby I assert a right of retention regarding the plaintiff's cost calculation and alternatively offset it." I am not even claiming that his claim has expired, but 18 months seems quite severe to me. But don't worry, he still made enough from us and even more from our former adversary. Unfortunately, it seems he then had no interest in properly finishing it.