Chapter 6: Statements of case Flashcards
General rules in relation to statements of case
Statements of case are crucial documents. In broad terms, they are the documents by which a
claimant sets out the factual basis of its claim and the relief sought, and the defendant gives its
own position in relation to the alleged facts and the alleged entitlement to relief.
1 General rules in relation to statements of case
We will start by looking at the rules and PD guidance governing the format and content of
statements of case common to all statements of case. Every statement of case will be set out in a similar way, with a formal case heading at the top, and a statement of truth at the end. The rest
of the contents will be set out in a uniform manner as prescribed by the rules.
1.1 Why do statements of case matter?
Statements of case are important documents. They need to be concise, clear and correct and
they must comply with all necessary content requirements as prescribed by the CPR. They must
also be in the correct format.
1.1 Why do statements of case matter?
If a statement of case does not comply it might require formal amendment. This will often require
the input of the court, giving permission, and will have a knock on impact on other statements of
case, which will also require amendment by the other parties. Even if the claim can proceed
without formal amendment to the statement of case, the deficiency will often cause time to be
wasted by the court and parties in working around the problem.
1.1 Why do statements of case matter? - Costs and Consequences for Parties
There will be costs consequences for parties who serve deficient statements of case causing any
of these issues, not to mention tactical disadvantages, some of which could be very serious.
1.2 Case heading
Every statement of case must be headed with the title of the proceedings. The title will be set out as in the example below and must include (7A PD 4.1):
1.3 Rules applicable to all statements of case
Court documents are all presented in a uniform way. Every statement of case must contain (5A
PD 2):
* Numbered paragraphs;
* Pages numbered consecutively;
* All numbers and dates in figures (eg ‘The property was purchased for £23,000 on 29 March
1965’);
* Reference in the margin to every document mentioned that has already been filed at court;
* The name of the person who drafted the document (the statement of case will therefore
contain the name of an individual barrister or the firm of solicitors); and
* A statement of truth (explained on the next page).
1.4 Statement of truth
Every statement of case needs a statement of truth (CPR 22.1(1)(a)). A party’s statement of case
can be used as evidence in the proceedings only if verified by a statement of truth.
1.4 Statement of truth
A statement of truth is a formal way of the person signing confirming that they believe that the
document is true. If the document turns out to contain a false statement and the person signing
the statement of truth does not have an honest belief that the statement was true, then
proceedings for contempt of court may be brought against the person signing. This can lead to
sanctions within the proceedings, fines and/or imprisonment in serious cases (CPR 32.14).
Example 1: Statement of truth where the party is an individual
I believe that the facts stated in this claim form are true.
Example 2: Statement of truth where the party is a company
The defendant believes that the facts stated in this defence are true. I am duly authorised by the
defendant to sign this statement….
Example 3: And in every statement of truth, after either the Example 1 or Example 2 wording
….I understand that proceedings for contempt of court may be brought against anyone who
makes, or causes to be made, a false statement in a document verified by a statement of truth
without an honest belief in its truth.
1.5 Summary
- Statements of case are key documents by which the parties set out their position in relation to
the factual basis of the claim and the claimant’s entitlement to relief. - Every statement of case must be headed with the title of the proceedings.
- All statements of case must comply with uniform standard formatting rules.
1.5 Summary
- Every statement of case needs a statement of truth.
- The statement of truth is the formal way of confirming that the contents of statements of case
are true. Proceedings for contempt of court may be brought against anyone signing a statement of truth without believing the contents of the document to be true.
2.1 Claim form - purpose
The claim form is the document used to commence proceedings and to set out key elements of the
claim, in particular the identity of the parties. It is the first statement of case. The claim form is
prepared by the claimant.
2.2 Claim form - structure
The claim form is usually on Form N1 (7A PD 3.1) – so the form dictates the structure and guides
the content to be included.
Note that special forms might apply in specialist proceedings (eg in the Commercial Court).
2.3 Claim form - contents
Exercise: Read alongside:
Access court form N1 from https://www.gov.uk/government/collections/court-and-tribunal-forms
and read the below alongside the form.
2.3.1 Parties
The claim form must contain the names of the parties and their addresses. The parties must be
referred to in a particular way. If a party is claiming or being sued in a representative capacity, the claim form must state what that capacity is – otherwise the people allegedly represented may not be bound by any decision the court makes.
Examples of names in the correct format are shown below:
2.3.2 Addresses
The parties’ addresses are the addresses for service, but the claimant must also indicate an
address where it resides or carries on business, if different (16 PD 2.2).
2.3.3 Claim details
The claimant is required to include brief details of their claim. This should include:
* A concise statement of the nature of the claim. This is a very brief summary of the type of
claim. This statement is not to be confused with the particulars of claim, which must either be
set out later in the claim form or in a separate document.
* The remedy sought by the claimant. Although this is required, the court has the power to grant
any remedy to which the claimant is entitled (not just the remedy sought by the claimant in
the claim form). It is not necessary to expressly include a claim for costs (CPR 16.2).
2.3.4 Value of claim form
Where the claimant is making a claim for money, the claim form must include a statement of the
amount claimed (CPR 16.3). The statement of value can be set out in any one of three ways:
(a) Where the amount of the claim is specified, the statement of value can simply state this amount; or
(b) Where the amount of the claim is for an unspecified amount (such as a claim in tort for damages), then the claim form can either have:
2.3.4 Value of claim form
A statement saying: ‘The claimant expects to recover less than £10,000’, ‘…between £10,000 -
£25,000’ or ‘…more than £25,000’ (this information is used to provisionally allocate a claim to
a track – explained in the sections relating to case management); OR
A statement saying: ‘I cannot say how much I expect to recover’.
2.3.4 Value of claim form
The court’s power is not limited by the claimant’s statement of value in the claim form; the court
can give judgment for whatever amount (if any) it finds the claimant is entitled to (CPR 16.3(7)).
In a personal injury claim, the claimant must state whether the amount which the claimant
expects to recover for pain, suffering and loss of amenity is or is not more than £1,000.
2.3.4 Value of claim form
Sometimes the claimant has a choice whether to issue the claim in the County Court or High
Court. If the High Court is chosen in this situation, a special ‘jurisdictional endorsement’ must be included in the claim form (CPR 16.3(5). In relation to a claim for money, if the claim form is to be
issued in the High Court it must:
2.3.4 Value of claim form
- state that the claimant expects to recover more than £100,000;
- state that some other enactment provides that the claim may be commenced only in the High Court and specify that enactment;
- if the claim is a claim for personal injuries state that the claimant expects to recover £50,000
or more; or - state that the claim is to be in one of the specialist High Court lists and state which list
2.3.4 Value of claim form
The effect of the provisions referred to above is that if a claimant is making a non-personal injury claim for over £100,000 in the High Court, it will, when stating the value of the claim in the claim
form:
* state the exact amount of the claim; and
* then state that the claimant expects to recover more than £100,000 to comply with CPR
16.3(5).
Note. In working out the value of the claim for the purposes of the statement of value in the claim
form, no account is taken of:
- interest;
- costs;
- counterclaims;
- set-off;
- contributory negligence; or
- state benefits the defendant may be liable to pay under the Social Security (Recovery of
Benefits) Act 1997.
2.3.5 Particulars of claim (attached)(to follow)
You will consider the statement of case known as the particulars of claim in a separate section.
This is the statement of case where the claimant sets out its case in detail. In anything other than very simple cases, the particulars of claim will be a separate stand-alone document. However, there is space to include the particulars of claim on the claim form itself
where they are relatively concise eg in a simple debt claim.
If the particulars of claim are in the form of a separate document this will either:
- Be attached to claim form (in which case the claim form will say ‘particulars of claim attached’
here); or - Be sent separately to the claim form, up to 14 days after service of the claim form (the claim form will state ‘particulars of claim to follow’). If the particulars of claim are served separately from the claim form, they must contain the claimant’s address for service. The claimant’s address for service is normally at the end of the particulars.
2.4 Summary
- The claim form is the first statement of case and also starts the claim off.
- It sets out key elements of the claim, in particular the identity of the parties.
- The claim form must contain:
- the parties’ names and addresses
- brief details of the claim and remedy
- a statement of the value of the claim and;
- where the High Court has been chosen, a jurisdictional endorsement.
- Particulars of claim are usually contained in a separate document, but they can be included in the claim form where they are relatively concise.
3 Particulars of claim
3.1 Particulars of claim - purpose
The particulars of claim set out the claimant’s case in full detail, as opposed to the brief statement
on the front of the claim form which simply sets out the nature of the claim and the remedy sought.
This is the claimant’s main statement of case and will be referred to by the court and all parties as such eg when identifying the basis of the claimant’s claim.
As with other statements of case, there are certain requirements regarding the contents of the
particulars of claim, some of which vary depending upon the subject matter of the claim itself.
3.2 Particulars of claim - contents
3.2.1 General
The particulars of claim must include ‘a concise statement of the facts on which the claimant relies’ (CPR 16.4(1)(a)) and must cover the essential elements of the claimant’s cause (or causes) of
action.
The particulars of claim must therefore set out all the material facts and allegations which, if
proved by evidence, would entitle the claimant to the remedy it seeks as a matter of law. In addition, the particulars of claim should set out any facts that ‘tell the story’ and assist the reader in understanding the case, ie background facts.
3.2.1 General
In most cases, this will mean that the particulars of claim will need to articulate the material facts
and allegations showing a duty owed by the defendant to the claimant, breach of that duty, and
that the breach caused recoverable loss. Clearly there are different ways that such matters can
be expressed, and the drafting of particulars of claim is more than solely a technical skill.
3.2.1 General
It is not the purpose of particulars of claim to set out law, evidence or arguments. Evidence is provided at a later stage (primarily through exchange of documents and witness statements). Law is argued by the advocate in their submissions.
3.2.2 Specific
The CPR sets out the following requirements for the particulars of claim in specific types of claim
and situations:
* The particulars of claim should set out any claim for aggravated damages, exemplary
damages and/or provisional damages, giving the grounds for claiming them (CPR 16.4).
* In personal injury claims, the particulars should include the claimant’s date of birth, details of
his/her injuries, and attach a schedule of past and future expenses losses and the report of
any expert medical practitioner which is relied on (16 PD 4).
3.2.2 Specific
- A claim in relation to the possession, occupation, use or enjoyment of land, or for an injunction or declaration in relation to land, must identify the land and make clear whether it includes
residential premises (16 PD 7.1). - Where the claim is based on a written agreement, it should be attached (with any general
conditions which are incorporated) (16 PD 7.3).
3.2.2 Specific
- Where the claim is based on an oral agreement, the particulars should set out the words
spoken, by whom, to whom, when and where (16 PD 7.4). - Where the claim is based on an agreement by conduct, the particulars should set out the
conduct relied on and state by whom, when and where the acts were done (16 PD 7.5).
3.2.2 Specific
There are detailed rules on the inclusion of information in relation to past convictions, fraud,
illegality, unsoundness of mind (16 PD 8).
Any human rights arguments relied upon / relief sought (16 PD 14) must be included in the
particulars of claim.
3.3 Particulars of claim – contents – interest
A claimant has a right to claim interest on the principal amount being claimed. This is to
compensate for the delay in receiving the money due to them (assuming they win the claim). If
the claimant does seek interest, a statement to that effect and the details must be set out in the
particulars of claim.
3.3.1 Legal basis of claim for interest
The legal basis for claiming interest may be either:
* set out in a contract between the parties or, failing that,
* there is a statutory right to interest (under section 35A Senior Courts Act 1981 in the High Court
and section 69 County Courts Act 1984 in the County Court).
There are two ways of setting out the paragraph(s) claiming interest:
* Calculating exactly the amount of interest claimed; or
* Claiming (‘pleading’) the interest generally.
3.3.2 Exact calculation
This method is only used in practice if the claimant is making a specified claim (ie a debt or a
specified/liquidated damages claim). In pleading interest on a specified claim, you would need to
set out:
* the applicable percentage rate,
* the dates from/to which interest is being claimed,
* the total amount claimed up to the issue of the claim form, and
* the daily rate of interest thereafter
3.3.3 Pleading interest generally
This method is used if the claimant is pursuing an unspecified claim, ie where the court has some
decision to make on the amount of damages because the parties do not agree the amount.
Certain types (or ‘heads’) of damage will naturally fall into this category, eg:
* loss of goodwill or damage to reputation (which can usually only be estimated),
* loss of future earnings or profits, and
* any damages where remoteness, foreseeability and/or mitigation is an issue.
Example: Specified claim
The Claimant also claims interest pursuant to clause 2.3 of the contract from the due date of the
invoice to today’s date at the rate of 8% per annum in the total sum of £701.37.
Particulars of Interest
8% of £100,000 for the period 1 January [year] to 1 February [year] inclusive (32 days at the daily
rate of £21.92) = £701.37.
Further, the Claimant claims interest as above from today’s date until judgment or earlier
payment at a daily rate of £21.92.
Example: Unspecified claim
The Claimant claims interest on the damages referred to in paragraph 12 above pursuant to
section 35A Senior Courts Act 1981 at such rate and for such period as the court thinks fit.
3.3.4 What happens if the claim is partly specified and partly unspecified?
For such ‘hybrid’ claims, you have a choice. You may treat the two claims separately, working
out the interest for the specified claim and making a general claim for the unspecified claim.
Alternatively, you may say that the two claims together come to a total which is an unspecified
claim and therefore treat the whole claim as an unspecified claim.
3.3.5 Statutory interest claims
Where the claimant relies on section 35A Senior Courts Act 1981 in the High Court and section 69
County Courts Act 1984 in the County Court, the following principles apply to the award of
interest:
* Generally, the court has a discretion as to whether to award interest, and how much, from the
date the cause of action accrued until judgment (or until payment, if before judgment). Different provisions cover interest after judgment (if the judgment sum is not paid), and these are outside the scope of this section.
3.3.5 Statutory interest claims
- In personal injury claims where damages over £200 are awarded, some interest must be awarded unless there are special reasons for not doing so, but the amount is still in the court’s discretion.
- In debt claims, if the defendant pays the whole debt during the proceedings, some interest
must be awarded, but the amount is still in the court’s discretion.
3.4 Particulars of claim – structure
Particulars of claim will follow a logical structure setting out the facts supporting the duty,
breach, causation and loss, as mentioned above. There are some standard paragraphs and
wording that will almost always be included when doing this:
Particulars of claim - structure
Start by introducing each party, to help the court understand the context.
At all material times the Claimant was a professional equities investor and the Defendant was a firm of solicitors.
Set out the relevant duty (or duties), including any necessary background facts.
By a contract dated 24 October [year], the Claimant and the Defendant agreed that the Claimant would sell to the Defendant computers for the price of £200,000.
Specify the breach (or breaches)
In breach of the express term of the contract referred to in paragraph 4 above, the Defendant did not pay.
Plead causation (linked to the breach).
As a result of the breach referred to in paragraph 5 above, the Claimant has suffered loss.
Set out loss (and interest claim).
The Claimant claims the sum of £200,000.
The prayer
Before the final formalities such as the name of the firm of solicitors or barrister drafting the particulars of claim and the statement of truth, the particulars of claim closes with a summary of the remedies sought by the claimant. This is also referred to as the ‘prayer’.
The prayer provides the court and the defendant with a quick means by which to ascertain what
the claimant actually wants.
Example: Particulars of claim - summary of relief
AND THE CLAIMANT CLAIMS:
(a) damages under paragraph 13 above; and
(b) interest under paragraph 14 above.
3.5 Summary
- The particulars of claim are the claimant’s main statement of case where the claimant sets out
the concise statement of facts supporting their claim (usually based on the duty, breach,
causation and loss that form the claimant’s cause of action). - There are specific rules for the content required in the particulars of claim for certain types of
claim and for some specific points that the claimant might wish to include. Important examples
include:
3.5 Summary
- Claim based on written agreement – must attach the written agreement
- Claim based on oral agreement – must set out words spoken, by whom, to whom, when
and where - Personal injury claim – must include claimant’s date of birth, injuries, schedule of past and
future expenses / losses and any medical expert report
3.5 Summary
- There are detailed rules in relation to the legal basis for claiming interest, whether contractual or statutory, and also how to set this out in the particulars of claim.
4 Defence and reply
4.1 Defence – purpose
The defence is the document in which the defendant sets out its case. It is the defendant’s response to the particulars of claim. It is filed at court and served on the other
parties.
The purpose of the document is to:
* React to every point or allegation in the claimant’s particulars of claim; and
* State full details of the defendant’s own case.
Each allegation in the particulars of claim must be dealt with individually.
4.2 Defence contents – general
As the defence is a response to the particulars of claim, the structure of the substantive defence content will naturally follow how the claimant has pleaded its claim, with any additional defence points being incorporated where appropriate.
Must include defendant’s address for service
Every defence must include the defendant’s address for service in the jurisdiction (unless an
acknowledgment of service has already been filed) (CPR 16.5(8)), and also indicate where the
defendant resides or carries on business if the claim form does not contain such information.
Miscellaneous points
There are also some miscellaneous points that must be included in the defence, specific to
particular issues, which will be dealt with later in this section. The defendant can do one of three things in relation to each allegation made by the claimant (CPR 16.5(1)):
* Admit the allegation;
* Deny the allegation; or
* Require proof of the allegation.
4.2.1 Admitting the allegation
If the defendant admits the allegation, the claimant does not have to bring any further evidence
in support of it. A party should admit anything that is not disputed or non-controversial in order to narrow the issues and save costs and time. There can be costs consequences of not admitting something when you should have done so (CPR 44.2(5)(b)).
Example: Admitting the allegation
In a dispute about a contractual debt, it may be that the defendant agrees that it entered into the
contract and that it owed the duties under the contract which the claimant alleges it owed, despite the defendant not agreeing that it owes any money under the contract. If that is the case, the defendant should admit the existence of the contract and its terms as pleaded by the claimant.
4.2.2 Denying the allegation
Denials are used to dispute any facts which, if they had occurred, would have been within the
defendant’s knowledge.
If a defendant denies an allegation it must give reasons. If it wishes to put forward a different version of events, it must state its version in the defence (CPR 16.5(2)). It is not acceptable to make a ‘bare denial’, ie to deny an allegation without giving reasons. A denial will have the effect that the claimant will have to prove the allegation.
Example: Denying the allegation
In a contractual debt claim, it may be possible to deny that the debt is due (explaining why not,
eg because it has already been paid).
4.2.3 Requiring proof
A defendant can require proof if the defendant is unable to either admit or deny the allegation, because the fact that is alleged is something about which the defendant does not know. The defendant therefore asks the claimant to prove the allegation. Sometimes it can be easy to confuse whether you should deny or require proof of an allegation. The way to answer this is to ask yourself what direct knowledge of the facts alleged your client could have had.
Example: Requiring proof
In a breach of contract claim, the claimant might allege it has suffered certain losses as a result
of the breach.
The defendant might:
* deny breach as it knows it did not breach the contract, and
* require the claimant to prove the amount of the alleged loss and damage, as the defendant
will have no knowledge about such matters itself.
4.2.4 Failing to deal with an allegation
It is important to make sure that every allegation in the particulars of claim is dealt with in the
defence. Keep in mind that sometimes the same paragraph of the particulars of claim might
include more than one allegation, each of which might need responding to differently in the
defence.
Consequences for failing to deal with an allegation:
- If the defendant omits to deal with any allegation made by the claimant, the defendant will be
deemed to admit it, unless it has set out its own case in respect of that allegation, in which case it will be deemed not to admit it, ie to require the claimant to prove it (CPR 16.5(3) and
(5)). - In a money claim, however, it will always be understood that the amount claimed is not admitted unless the defendant specifically admits it (CPR 16.5(4)). It is still good practice to ensure that every allegation set out in the particulars of claim is dealt with in the defence.
4.3 Defence contents – specific
The following matters must also be included in the defence:
- Limitation: this is a defence to a claim - it is not (perhaps surprisingly) a bar to the claim being brought. If the defence of limitation is being raised, the defendant must state the date on
which the limitation period is deemed to have expired (16 PD 13.1). - Disputing the statement of value: a defendant may dispute the claimant’s valuation of the claim. If so, the defendant must state why it disputes it, and what it estimates the value to be (CPR 16.5(6)).
The following matters must also be included in the defence:
- In personal injury claims, the defendant must state whether it agrees, disputes or has no
knowledge of the matters in the schedule of past and future expenses and losses, and any
medical report included with the particulars, giving reasons and its own counter-schedule and
(if relied upon) medical evidence (16 PD 11). Any matters to do with mitigation or reduction of damages must also be stated.
4.3 Defence contents – specific
Set off
Set-off: The defendant may claim he is owed money by the claimant, and may wish to rely on this as part of his defence to the claimant’s claim. The defendant is effectively saying ‘I don’t owe you X, because you owe me X, and the two cancel each other out’. If the defendant is able to and wishes to rely on a defence of set-off, it must be set out in the defence
Other Defences
Other defences: The defence must also specifically set out any matter which is a defence to the
claim or raises issues of fact not included in the claim eg fraud or illegality. Any human rights arguments relied upon / relief sought (16 PD 15) must be included in the
defence. A defendant might also make a counterclaim against a claimant, and if it does so, the defence and counterclaim should normally form one document with the counterclaim following on from
the defence.
4.4 Defence – standard structure
One of the best ways to structure a defence is to respond point by point to the allegations in the
particulars of claim, weaving your client’s instructions into that structure. As with the particulars
of claim, there are some standard paragraphs and wording that will almost always be included when doing this:
Defence - standard structure
If the claimant has used any ‘defined terms’ in the particulars of claim it is usual to open the defence by adopting these so consistent terminology can be used throughout the statements of case.
The definitions used in the Particulars of Claim are adopted.
The first paragraph of the particulars of claim is usually the introduction of each party. This should not be controversial and therefore can usually be admitted in the defence
Paragraph 1 of the Particulars of Claim is admitted.
The allegations in the particulars of claim will be admitted, denied or put to proof.
Paragraph 6 of the Particulars of Claim is denied [a reason and alternative version would
be given]. The claimant is required to prove Paragraph 7 of the Particulars of Claim.
At or near the end of a defence a paragraph often referred to as a ‘general denial’ is usually included. This denies the entitlement of the claimant to the sum, or any part of the
sum, being claimed.
In the circumstances, it is denied that the Claimant is entitled to the amount claimed or any amount.
4.5 Reply – purpose, content and structure
A reply is an optional statement of case served by the claimant.
Its purpose is to allege facts in answer to the defence which were not included in the claim (CPR
15.8) – the contents will therefore be factual allegations which answer ‘new’ points raised in the defence. There is no particular structure for a Reply.
Example: Reply
A retailer brings a claim against a purchaser for failing to pay for the purchased goods. The particulars of claim set out the material terms of the contract, and state when the goods were delivered and that payment has not been made. The defence admits all of the above but alleges that the goods were defective on delivery and therefore the defendant is not obliged to pay for them. The defence details the alleged defects.
Example: Reply
In those circumstances, the claimant may wish to file a reply responding to the alleged defects:
this is not something which has been addressed in the particulars of claim, and it may well be useful for the court and the parties to know the claimant’s position in relation to the alleged defects
4.6 Reply – when to file
Replies are not filed in every case but, if there is one, it should be filed with the directions questionnaire (the directions questionnaire is a case management document which the court directs should be filed after a claim is defended. Parties are given at least 14 days’ notice of the deadline for doing this)(15 PD 3.2A).
4.6 Reply – when to file
This time limit is different in some specialist proceedings (eg Commercial Court claims) so it is
necessary to check the relevant rules and court guides if dealing with a specialist claim. The reply should be the last statement of case in a claim and permission of the court is needed to file any statement of case after the reply (CPR 15.9). A reply must be verified by a statement of
truth (CPR 22.1).
4.7 Summary
- The defence is the defendant’s main statement of case, where the defendant responds to the claimant’s claim as set out in the particulars of claim.
- The defence must deal with every allegation contained in the particulars of claim by either
admitting, denying or requiring the allegation to be proved by the claimant. - If an allegation in the particulars of claim is not dealt with in the defence at all, it will generally
be taken to be admitted by the defendant.
4.7 Summary
- There are specific rules for the content required in the defence for certain types of claim and
for some specific points that the defendant might wish to include. - The defence will start with the case heading and end with a statement of truth, as in any other
statement of case. - The reply is an optional final statement of case in which the claimant alleges any facts in
answer to the defence that have not already been included in the claimant’s earlier claim.
Counterclaims and other possible statements of case
In addition to, or following, the initial response required by the defendant (ie acknowledging
service, admitting or defending the claim) there are some other possible statements of case that
might be served at this time.
These include:
* The defendant might wish to make a counterclaim.
* This would usually be followed by the claimant serving a defence to counterclaim.
* The claimant might serve an additional statement of case in response to the defence called a
reply. This was introduced to you above, but is considered again in this section in the context of a counterclaim being made.
5.1 Counterclaims by a defendant against a claimant
Counterclaims are a form of additional claim and these are dealt with in CPR 20. There are a number of different types of additional claims. The only one that we are interested in this section is the ‘classic’ counterclaim by a defendant against a claimant (CPR 20.4). Other types of claim under CPR 20 (also known as ‘additional claims’ or ‘other additional claims’) are 5.1 Counterclaims by a defendant against a claimant detailed in a separate chapter, as are a number of procedural points relevant to additional claims.
5.1 Counterclaims by a defendant against a claimant
A counterclaim is a separate claim to the main claim and is normally made at the same time as the defendant files its defence. If a counterclaim is made after the defence has been filed, permission of the court is needed (CPR 20.4(2))
5.1 Counterclaims by a defendant against a claimant
At its simplest, a defendant’s counterclaim against the claimant is pursued in the same
proceedings as the main claim and is, accordingly, dealt with under the same claim number as the main (substantive) claim by the claimant against the defendant. The defendant could, of course, commence an entirely separate claim, but it is usually more
convenient for the defendant to combine its counterclaim with the main claim. These types of
counterclaim are very common.
5.1 Counterclaims by a defendant against a claimant
A counterclaim, like any other claim, needs to be based on case analysis which confirms that a
viable cause of action exists. The defendant in their counterclaim will need to be able to establish
duty, breach, causation and loss against the claimant. A counterclaim may or may not have anything to do with the claimant’s substantive cause of action against the defendant. However, the parties must be suing/being sued in the same capacities as in the main claim.
5.1.1 Form of counterclaim
The counterclaim, if made at the same time as the defence, should form a single document with the defence (15 PD 3). It normally follows on directly from the defence (within the same document) and is clearly labelled as a counterclaim. This document is then entitled ‘Defence and Counterclaim’.
5.2 Set off
The facts that give rise to a counterclaim may also amount to a defence in the main claim (ie the
defence of set off). The defence of set off may be a partial or complete defence to the main claim. It has the effect of ‘extinguishing’ any claim up to the same amount against the defendant. Please see the illustration below.
5.1 Counterclaims by a defendant against a claimant
If the court does not think the counterclaim should be heard with the main claim, it can order that
the counterclaim be struck out or heard separately (CPR 3.1(2)(e))
Example: Set off
Assume that:
* the defendant makes a counterclaim;
* the facts underlying the counterclaim can also be used as a defence of set-off, and the
defendant sets out this defence in its defence (and counterclaim); and
* both parties ‘win’ in their respective claims.
* The value of the claimant’s claim is £20,000 and the value of the defendant’s counterclaim is £10,000
5.1.1 Form of counterclaim
The counterclaim is essentially a particulars of claim by another name. It must therefore comply
with the rules on particulars of claim. As mentioned above, it must contain the four necessary
elements of a claim: duty; breach; causation; and loss. It should also comply with CPR 16.4 (and
the corresponding provisions in 16 PD). A court fee will be payable to the court on filing a counterclaim.
Example: Set off
In this situation the claimant will only be able to enforce its judgment against £10,000 of the
defendant’s assets, ie £20,000 minus £10,000. Essentially, the £10,000 owing to the defendant by the claimant (pursuant to the defendant’s counterclaim) is ‘set off’ against the claimant’s judgment against the defendant. The legal effect of this is illustrated in the table
5.2.1 Set off consequences
The consequences for the example are illustrated in the first row of the table below. The second and third rows illustrate the consequences should the result in the claims be different:
5.2.2 Legal basis for set off
There are only certain circumstances where the defendant can actually ‘set off’ its judgment in the counterclaim against the claimant’s judgment in its substantive claim. The most important ones are as follows:
Legal basis for set off
S.53(1) Sale of Goods Act 1979:
Where the seller sues for the price of goods sold and delivered, the buyer can set off a claim for breach of implied terms as to quality and fitness for purpose.
Defective services:
Where a claim is made for the price of services, the defendant can set off a claim for damages for poor services.
Equitable set-off:
This has been developed by the courts when it considers that there is such a close connection between the two transactions that it would be manifestly unjust to allow enforcement of one claim without taking into account the cross-claim.
5.2.3 Form of set off
The defence of set-off should be set out in the defence part of the Defence and Counterclaim, (as
opposed to the counterclaim part) (CPR 16.6). It is usually pleaded as in the following example:
Example: Form of set off
Further or in the alternative, if the Defendant is held liable to the Claimant, the Defendant will
seek to set off against the Claimant’s claim as much of the sum awarded by way of counterclaim in these proceedings as to reduce it or extinguish it altogether.
5.3 Defence to counterclaim
The claimant needs to respond to any counterclaim against them, just as any other claim against
a party needs a response. A defendant’s counterclaim can be either admitted or defended by a
claimant
5.3.1 Time for serving defence to counterclaim
There is no requirement for a claimant to acknowledge service of the counterclaim using an
acknowledgment of service (CPR 20.4(3)). A claimant’s defence to a counterclaim must, however,
be filed and served in accordance with the usual rules for defences (CPR 15). This means, the defence to a counterclaim must be served within 14 days after service of the counterclaim. If a claimant wishing to defend a counterclaim fails to serve a defence within the requisite time limit, a judgment in default might be entered by the defendant (CPR 12.3(2)(b)).
5.3.2 Form of defence to counterclaim
A defence to a counterclaim is very similar to a ‘normal’ defence. Its contents must therefore comply with the usual rules in relation to defences (CPR 16.5 and 16 PD).
5.4 Reply
As this statement of case is usually being prepared at the same time as the claimant is considering their response to any counterclaim that has been made, the ‘Reply and Defence to Counterclaim’ normally form one document with the defence to counterclaim following on from the reply (15 PD 3.2). The reply should be the last statement of case in a claim and permission of the court is needed to file any statement of case after the reply (CPR 15.9).
5.5 Summary
The remaining statements of case that might be served at this stage of the claim are a counterclaim, a defence to counterclaim and a reply.
* Counterclaims are a claim by a defendant against a claimant pursued in the same proceedings as the main claim by the claimant against the defendant.
* A counterclaim will be based on a cause of action between defendant and claimant. Duty, breach causation and loss will all need to be established.
5.5 Summary
- The facts that give rise to a counterclaim may also amount to a defence of set off in the main claim, if the legal basis for set off exists.
- The effect of set off is to extinguish the claimant’s claim against the defendant up to the
amount of the defendant’s claim against the claimant. - If a counterclaim is disputed, it needs to be defended in the same way as any other claim.
- The reply is an optional final statement of case.
