Part 20 survival guide
District Judge Patricia Pearl enters that part of civil procedure where many solicitors fear to tread
The Civil Procedure Rules 1998 (CPR) part 20 sets out to provide a logical framework for managing any claim other than a claim by a claimant against a defendant.
That means counterclaims, claims for indemnity and contribution and what we used to call third, fourth, etc, party proceedings.
Unfortunately, the terminology of part 20 is less than catchy, and the rules themselves are at times difficult to navigate.
This short guide aims to explain when to use the engaging part 20 claim form - the N211, when a judgment in default is available, when permission is needed to start a part 20 claim and when the acknowledgment of service procedure is utilised.
It had been unclear whether the CPR had adopted the High Court principle of allowing judgment in default on a counterclaim.
A CPR amendment put that right - the same principle applies.
With effect from 25 March 2002 a time limit is imposed in relation to contribution notices served without permission.
Counterclaims against claimants
These are the most common part 20 claims but, as far as the CPR is concerned, they stand apart.
The counterclaim is usually made at the same time as the defence is filed and runs on in the same document (practice direction 20, paragraph 6.1).
But whenever made, it attracts a prescribed court fee which is on the same sliding scale as the original claim.
A counterclaim against a claimant is not served with a response pack.
However, the consequence of not filing a defence within 14 days is judgment in default (rule 20.3(3)).
The claimant cannot buy time to file a defence to the counterclaim by filing an acknowledgement of service as this procedure is not available.
Permission to start this type of counterclaim is needed if it is made later than the defence.
Counterclaims against parties other than the claimant
Permission is always needed to make a counterclaim against a party other than the claimant (rule 20.5 (1)); the application is generally made without notice (rule 20.5(2)).
The form N211 should be used; this is identical to the N1 albeit a buff colour and with extra space for adding the names of the extra parties.
A court fee is payable, as for counterclaims against claimants.
There is a special response pack (N213) which includes an acknowledgement of service.
The part 20 claimant may enter judgment in default of acknowledgement of service or defence on request (rule 20.3(3)).
Claims for contribution and indemnity against a co-defendant
The claim is made by notice (rule 20.6(1)).
Neither a court fee nor form N211 are required.
The recipient who ignores the notice is not exposed to judgment in default.
Permission is not required to serve the notice as long as the claim is made at the same time as the defence is filed (rule 20.6(2)(i)).
Where a new defendant enters the proceedings, the claim for contribution and indemnity against him must be made within 28 days after that defendant files his defence, otherwise permission is required to serve the notice (rule (2)(a)((i)).
Claims other than counterclaims and for contribution and indemnity
These used to be termed third, fourth, etc, party claims.
They are started by issuing form N211 and can be issued before or at the same time as the defendant files a defence, otherwise permission is required (rule 20.7).
The claim form is served with a response pack and the acknowledgement of service procedure applies.
A party who fails to file an acknowledgement of service or defend is deemed to admit the part 20 claim and will be bound by any relevant judgment in the main claim.
Judgment in default of defence by request is only available in special circumstances.
Part 20 meets part 8
Where the part 8 procedure is used, permission is needed to make a part 20 claim of any type (rule 8.7).
Default judgment and part 20 claims
A part 20 claimant may request judgment in default of defence to a counterclaim.
By rule 20.11 the part 20 claimant (other than by counterclaim or contribution or indemnity notice) may, in addition, enter judgment in default if he has himself satisfied a default judgment which has been given against him provided he wishes to pass on no more than the original judgment to the part 20 defendant.
In all other cases, judgment in default of defence/acknowledgement of service in a part 20 claim must be by application, albeit notice may not be required (rule 20.11(3),(4)).
Seeking permission to start a part 20 claim
If permission is needed to start the part 20 claim, the usual part 23 procedure is used.
The application can be made without notice (rule 20.7(5)) and should be supported by the evidence indicated by practice direction 20, paragraphs 2.1 and 2.2 - namely details about the stage that the proceedings have reached and the nature of the claim to be made.
Service of part 20 claim
The effect of service is to make the person on whom the part 20 claim has been served a party to the proceedings, if he is not one already (rule 20.10).
The other parties to the proceedings must be provided with a copy of the part 20 claim (rule 20.8) except if the part 20 claim is for contribution or indemnity against a co-defendant where there is no requirement to notify the other parties.
Set-off or counterclaim?
A set-off and a counterclaim are easily confused.
The distinction is in the legal nature of the case, and is not covered by the rules.
A set-off is a pure defence - famously described as a 'shield not a sword' (Stooke v Taylor [1880] 5 QBD 569).
The defendant who raises a set-off does not need to pay a court fee and the part 20 rules do not apply.
However, a set-off is not a separate action and the successful defendant cannot obtain a judgment on the set-off.
Also, beware of the trap that the set-off must arise between the parties in the same right - so a partnership debt cannot be a set-off against a claim by an individual (Ex parte Twogood (1805) 11 Ves 517).
If the situation is still not clear, then play safe by pleading the set-off as a counterclaim in the alternative.
Format and case management of part 20 claims
A part 20 claim is treated as a claim for the purposes of the CPR (rule 20.3); it must be clearly set out in accordance with part 16 and must be supported by a statement of truth.
Any defence must comply with part 15.
Part 26 (case management - preliminary stages) does not apply to part 20 claims.
The size of a counterclaim is taken into account when determining track but the claims are not added together and a claim may be allocated to the small claims track where the counterclaim exceeds 5,000 (Berridge (Paul)(t/a EAB Builders) v R M Bayliss (1999) LTL 23 November, CA).
The part 20 claim will be managed and heard with the primary claim if convenient, but can otherwise be dealt with quite separately.
Rule 20.9 sets out common sense factors which the court will take into account on the question of whether a part 20 claim should be managed separately from the main claim.
The part 20 claim is distinct from the main claim (rule 20.3(1)).
If the main claim is settled, the part 20 claim does not stand struck out.
However, there is no automatic stay of execution on a judgment in the main claim pending determination of the counterclaim, so an application should be made to stay any enforcement action.
Nomenclature
Take a moment to look at the practice direction which supplements part 20 (paragraph 7.1).
It sets out a somewhat extravagant system of heading up cases which include part 20 claims.
There is some evidence that the court computers find it difficult to cope with the recommended system, but where used properly it may save confusion.
District Judge Patricia Pearl sits at Watford County Court
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