What if the Other Party Makes a Counterclaim?

There are several different ways that a defendant can respond when a claim is issued against him:

• Do nothing at all – the claimant is then entitled to request a judgment in default;
• Admit the claim – the claimant is entitled to request judgment. The defendant may pay the debt or make an offer to pay it by instalments;
• Defend the claim – the case will then have to be allocated to the appropriate track so that it can proceed to trial; or,
• Defend the claim and make a counterclaim.

If the defendant wishes to make a counterclaim against the claimant he should do so at the same time as he lodges his defence form. The defendant will have to pay a fee to make the counterclaim.

The Civil Procedure Rules

Part 20 of the Civil Procedure Rules (CPR) contains the rules governing counterclaims. The defendant will usually be able to start the counterclaim when he defends the claim. In most types of cases the defendant does not need the court’s permission to do this. A defendant might decide to bring a counterclaim against the claimant in a case where he says that, whether or not what the claimant says is correct, it should be set off against something that the claimant has done.

Counterclaim Against the Claimant

For example, a builder has started a claim against a householder who has refused to pay for a fitted kitchen. The householder says that the services provided by the builder were so poor that he had to pay somebody else to finish the work and to repair structural damage caused by the builder’s employees. The householder says that the builder should reimburse him for the additional money he was forced to spend.

If the defendant decides to bring a counterclaim against the claimant after he has filed his defence he will need the court’s permission to do so.

Reply and Defence to Counterclaim

If a defendant puts in a counterclaim with their defence, the claimant will have the opportunity to respond to this in a Reply and / or Defence to the Counterclaim. This will usually have to be returned to the court within about 14 days of receipt of the counterclaim.

Part 20 Claim Against a Third Party

Part 20 of the CPR also deals with the situation where a defendant says that, if the claimant’s case is correct, the defendant should be able to seek payment or some other remedy from a third party to set off his liability to the claimant. In other words the defendant is saying that, if the claimant is correct, it is a third party’s fault and they are the ones who should pay. Alternatively the defendant may say that he has a separate claim against a third party that would most appropriately be dealt with at the same time as the original claim.

The defendant will have to ask for the court’s permission to have the third party added as a party to the proceedings.

Management of Counterclaims

If the defendant responds to the claim by making a counterclaim the claimant will, technically, become the “Part 20 Defendant” and the defendant will become the “Part 20 Claimant”. Therefore any court documents should give the parties both of these titles. If the defendant has issued a Part 20 claim against a third party, the third party will be the part 20 Defendant.

Where a counterclaim is made, or where the court’s permission is sought to issue a counterclaim, the court will take into account a number of factors when deciding how to manage the case. The court can refuse permission, strike out the counterclaim or order that it be dealt with as a separate claim.

Allocation of Counterclaims

Some defendants will have a genuine counterclaim against the claimant which should, in the interests of justice, be dealt with at the same time. However, there are occasions where a defendant will seek to introduce a counterclaim in an effort to avoid liability or to complicate the court process.

A counterclaim could have a bearing on the allocation of the trial. If the financial value of the counterclaim is higher than the value of the original claim this could result in the whole claim being allocated to a different track. Therefore a claimant who thinks he has issued a small claims case could suddenly find that the case has been allocated to a costlier and more complicated track because of the counterclaim.