Counterclaims and other statements of case

Question 1

Counterclaims by defendant against a claimant

Answer 1

CPR 20:

• this is a ‘classic’ counterclaim’
• normally made at the same time as the defendant files its defence

Note: if the counterclaim is made after the defence has been filed, permission of the court is needed.

Question 2

What is a counterclaim?

Answer 2

• counterclaim is a claim against the claimant pursued in the same proceedings as the main claim by the claimant against the defendant
• 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

Very common.

Question 3

Elements of a counterclaim

Answer 3

• needs, like any claim, to be based on case analysis which confirms that a viable cause of action exists.
• defendant 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 (but parties must be suing/being sued in the same capacity)
• 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

Question 4

Form of counterclaim

Answer 4

• If filed at the same time as the defence, it should be included in the same document entitled ‘Defence and Counterclaim’
• Essentially a particulars of claim by another name
• Therefore follows the same rules as a PoC
  + duty
  + breach
  + causation
  + loss
• Court fee will be payable on filing the counterclaim

Question 5

What is a set-off?

Answer 5

• Where the counterclaim also acts as defence to the main claim
• May be partial or a complete defence to the main claim
• Has the effect of extinguishing any claim up to the same amount against the defendant

Question 6

Legal basis for set-off

Answer 6

• 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
• Where a claim is made for the price of services, the defendant can set off a claim for damages for poor service
• Equitable set off: where there is a 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

Question 7

Form of set-off

Answer 7

Defence of set-off should be set out in the defence part of the Defence and Counterclaim.

“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.

Question 8

Defence to counterclaim

Answer 8

• claimant needs to respond to any counterclaim against them. Can either be admitted or defended

Time for serving: no requirement to serve acknowledgement, but the defence must be served within 14 days after service of the counterclaim

Form: must comply with usual rules of defences

Question 9

CPR for amending statements of case

Answer 9

CPR 17: amending statements of case

CPR 19: Addition and substitution of parties

CPR 20: Counterclaims and other additional claims

Question 10

Contribution

Answer 10

A right of someone to recover from a third person all or part of the amount which he himself is liable to pay

• often arises from tort
  but can also be contract

Question 11

Indemnity

Answer 11

A right of someone to recover from a third party the whole of the amount which he himself is liable to pay

• often arises from contract or statute

Question 12

Counterclaims against someone other than the claimant

Answer 12

Counterclaim by defendant against:
- the claimant
- some other person

• Sometimes defendant will have a counterclaim against both the claimant and another person at the same time.
• If not already party to proceedings the other person will need to be joined into the main proceedings as a third party so the defendant’s counterclaim can proceed

Question 13

Counterclaims against a person other than a claimant

Answer 13

• Counterclaim must be against claimant and third party together
• Must be a connection between the claimant and the third party in respect of the defendant

E.g.
defendant does not pay builder because unsatisfied with work
- builder sues for payment
- defendant may bring counterclaim against both builder and architect
- architect is a person other than the claimant

Question 14

Claims for a contribution or indemnity from an existing party

Answer 14

Hallmark of both contribution and indemnity: party claiming then is seeking to recover something which it is itself obliged to pay someone else

• Defendant who has acknowledged service of a claim or who has served a defence may make an additional claim for contribution or indemnity against an exiting party by filling in a contribution notice
• must be legal basis (so analysis will be required)

Question 15

Claims for contribution/indemnity from a third party

Answer 15

• not already an existing party
• need legal basis to bring the claim
• purely between defendant and third party but the issues will depend on the outcome of the main claim

Question 16

Permission for counterclaims/additional claims

Answer 16

Classic counterclaim:
- No permission if filed at the same time as the defence
- permission is needed at any other time

Counterclaim against a person other than the claimant:
- Permission is ALWAYS required

Claims for contribution or indemnity from existing party:
- No permission is needed if filed and served at the same time as the defence (or within 28 days of additional party’s defence if added at a later date)
- Permission needed at any other time

Other additional claims:
- No permission needed if the additional claim is issued before or at the same time as the defence is filed
- Permission is needed at any other time

Question 17

Structure and form: classic counterclaims

Answer 17

A counterclaim by a defendant against the claimant will usually take the form of a ‘particulars of counterclaim’. Defence and counterclaim normally form one single document with the counterclaim following on from the defence.

As the defence and counterclaim form one document they are filed and served together.

Question 18

Structure and form: contribution/indemnity

Answer 18

If claim is made against another party (already party to main proceedings), the claim is made by serving an appropriate notice - no set form

If court’s permission is not required, notice is filed and served with the defence

If the court’s permission is required the court will give directions as to when the notice should be served.

Question 19

Structure and form: other additional claims

Answer 19

• Issuing N211 claim form
• if made without court’s permission, claim form should be served on the person against whom it is made within 14 days of it being issued
• If court’s permission is required - court will give directions as to when the notice should be served

Question 20

Structure and form: all additional claims

Answer 20

A party who is not already party to the proceedings becomes party to the proceedings if he was not already a party.

If an additional claim is served on someone who is not already a party to the proceedings it must be accompanied by:
- as response pack
- a copy of every statement of case and any other document that the court directs

A copy of the additional claim form must also be served on every existing party

Question 21

Additional claims: Case management

Answer 21

Court will consider if additional claim is appropriate or if should be a separate action all together

• May arrange a hearing

Question 22

Title of proceedings where there are additional claims

Answer 22

Matters can become confusing where there are a number of different parties involved in a set of proceedings

Claimant and defendant to original claim retain these titles

Additional parties are called: third party, fourth party and so on

Question 23

Amendments before serving

Answer 23

A party may amend a statement of case at any time before it served

Question 24

Amending statement of case after it has been served

Answer 24

Can make amendments if all the parties agree and give written consent
(CPR 17.1(2)(a))

Note: court has the power to disallow these amendments

Or permission of the court:
- file application notice with the court together with the proposed amendment

Application can be dealt with at a hearing or if all parties consent on written submissions

Question 25

Test for permission to amend a statement of case

Answer 25

(1) Give regard to the overriding objective of dealing with cases justly and at proportionate cost - give balance to injustice

(2) Proposed amendment must have a reasonably prospect of success

(3) Promptness - a late amendment could put trial at jeopardy. Should show that there is a good explanation why did not apply earlier and must show the strength of the new case

• court may not allow amendments where it may jeopardise the trial date and put a considerable burden on the otherside to amend their own statements of case and produce further disclosure and evidence
• may be allowed but there could be a heavy costs burden

Question 26

After limitation period

Answer 26

General rule: amendments shall not be allowed

Exceptions:
- new cause of action is an original set-off or counterclaim
- new cause of action arises out of substantially the same facts as the facts in issue in original claim
- court may direct the limitation does not apply in a personal injury claim (where equitable to do so)

Note: amendments which clarify a duty or obligation which has already been alleged will not normally be interpreted as raising a new cause of action
- amendments which add a new duty or obligation on the part of a defendant will usually raise a new cause of action

Question 27

Adding or changing parties

Answer 27

• always need the courts permission

The court will look at whether the the addition/change is:

(1) desirable

(2) whether it is related to a matter in issue between the claimant and defendant

Question 28

Adding parties post limitation

Answer 28

Limited situations where this is acceptable:

• Relates to correcting a mistake as to the name of the party (CPR 17.4(3)
• Changing the capacity of a party (CPR 17.4(4))
• Changing the identity of a defendant (CPR 19.6)

Question 29

When can you change the identity of a defendant?

Answer 29

• When there was a mistake but the person is described sufficiently (Sardinia Sulcis test)
• The person is dead or bankrupt and interest has passed on to a new party
• the claim cannot properly be carried on against/by the original party unless the new party is added or substituted

Question 30

Colour order used for amendments

Answer 30

Red

Green

Violet

Yellow

Rudy Guliani is very yellow

Question 31

What is obtaining further information?

Answer 31

• A party can obtain further information from the other party to clarify or give additional information in relation to any matter which is in dispute.

Often this will be in the statements of case (but the court’s power is not limited to the statements of case)

Question 32

What should requests be confined to?

Answer 32

Requests should be confined to matters which are reasonably necessary and proportionate to enable the party seeking clarification or information to prepare its own case or to understand the case it has to meet.

Question 33

Why might a party make a request for further information?

Answer 33

• To obtain admissions (rare)
• To obtain information which may reveal weaknesses in the other party’s case
• to obtain information about facts which the other party needs to prove to make good their case
• acquire advance details of what a witness may say before exchange of witness statements
• To obtain clarification of the other party’s case
• To narrow the issues between the parties to save time and costs

Question 34

Making a request for further information

Answer 34

• Should seek on a voluntary basis first and only apply to court if request cannot be resolved
• serves written request on other party with a response date that gives a reasonable amount of time to respond

Request should be concise and confined to matters which are reasonably necessary and proportionate

Question 35

Responding to a request

Answer 35

• Response must be written, dated and signed by the party or its legal representative and include a statement of truth
• Response must be sent to the other party and filed at court
• If a party objects to providing a request, it must inform the party who made the request giving reasons for the objection and object within timeframe set out in the request
• if disproportionate expense, should set out why or explain if matters are irrelevant, disproportionate, not necessary or privileged

Question 36

Request to court for further information

Answer 36

• Court can order a party to clarify any matter in dispute in proceedings or any information in relation to the matter
• Application to the court would be appropriate where the other party has not responded or objects
• Made as an interim application (CPR 23) and if more than 14 days have passed without response can be made without notice
• If court makes order: party must file its response and serve on the other parties and verify it with a statement of truth