Part 20 claims
Ross Fletcher
Track/ Slide 1
OK today’s lecture concerns Part 20 claims and Part 20 proceedings. A lot of the rules in the Civil Procedure Rules are relatively straight forward and can be understood with a minimum of knowledge of civil procedure in general. Part 20 unfortunately is not one of those. If you encounter Part 20 straight away without having any background understanding of it, then you will be likely to become bewildered very quickly. So the idea behind this lecture is to get you equipped with a basic understanding of what Part 20 claims, what Part 20 proceedings are and an understanding of how they would work in practice.
Track/Slide 2
What is a Part 20 claim? It is defined in the Civil procedure Rules as any claim other than a claim by a claimant against a defendant. That’s the definition in CPR 20.2. This can include although it’s not limited to – there presumably might be other types of Part 20 claim – a counter claim, a claim by a defendant against another party. It could be a counter claim against a claimant and also against another party. It could be a claim against another party whether that other party is already a party to the proceedings. It could be a claim against another party to the proceedings for a contribution or an indemnity or some other remedy. It could be a claim by a person who is themselves the recipient of a Part 20 claim if they haven’t been involved in the proceedings before they got a Part 20 claim against any other person, whether or not that party is a party to the existing proceedings.
Track/Slide 3
The first and most straightforward type of Part 20 claim is a counter-claim. This is referred to in part 20.2(1)(a). It’s a claim by a defendant against a claimant or it could be also a claim against the claimant and some other person. The procedure for bringing a counter claim against the claimant from the defendant is set out in part 20.4. A straightforward example of a counter-claim might be where the claimant sues the defendant for non-payment in relation to, say, a delivery of engine oil and the defendant retaliates by saying the oil was defective and in fact caused damage to the engine that he tried to use it in. The defendant would therefore make a counter-claim for the damaged engine.
The counter-claim need not be a money claim or strictly related to the claimant’s claim. A classic example of this is the case of Rotherham v Priest where the claimant or the plaintiff as he was then called in 1879 brought proceedings against his tenant, the plaintiff was his landlord, for non-payment of his rent. And the defendant brought a counter-claim in libel against the landlord. So the two things need not be strictly related but in the most basic examples they will be.
Generally a claim and a counter-claim are heard separately. If a counter-claim’s not brought at the same time as a defence then the defendant will need the court’s permission to bring it as set out in part 20.4(2)(b). So it’s in the interests of the defendant to bring a counter-claim early on as if he discovers the need to make a counter-claim later in the course of proceedings he will need to go through the expense and time of getting the court’s permission. There’s actually a form on which to bring a counter-claim included in the response pack which is sent from the claimant to the defendant along with the claim form. It says in part 20.3 “a counterclaim shall be treated as a claim for the purposes of these Rules”. So what that means is the claimant must respond to it. If he doesn’t he’ll be in default. So he’ll have to file a defence to the counter-claim within the time limit set out in part 15 if he wants to dispute liability.
Also the usual rules about statements of case apply to counter claims. So for example there needs to be a statement of value. The usual rules about drafting statements of case apply also.
Track/Slide 4
More complex than this is a counter-claim against a person other than the claimant. If a defendant is bringing a counter-claim against a claimant and also against someone else as well, he’ll need to apply to the court for that person to be added to proceedings. This will usually happen where the defendant is claiming in respect of damages from the claimant but that claim is extrinsically linked to a claim against another party. This is the obvious example of this sort of claim but it’s not the only way in which this sort of claim could arise.
Something like this arose in the case of P& O Developments Ltd v Guy’s and St Thomas NHS Trust. What happened here was the defendants, let’s call them D, had employed someone, let’s call them H, as a management contractor. The project fell apart due to delay and H settled liability with D. The sum which was settled was not apportioned amongst the various contractors and sub-contractors who were supposed to be doing this development. Part of the advisory team of H were C and Y and they sued D for non-payment of fees. They claimed that they should have been paid more than they were in fact reimbursed with. So D denied liability and served a counter-claim for the delays to the business development against C and Y. So therefore the proceedings looked like this. You had C who was the claimant, D who was the defendant. D was also the Part 20 claimant as he was bringing a counter-claim against C. This made C the defendant to that Part 20 claim so his title was the Part 20 defendant as well as the claimant and then you had Y who was the Part 20 defendant.
Now you need to get the court’s permission if you are a defendant and you want to bring this sort of claim. You don’t need the permission of the court in relation to certain other parts of types of Part 20 claims which we’ll go on to discuss because in those sort of situations it will not be something which is the subject of getting the court’s permission. Those sorts of claim are dealt with in part 20.7 but because part 20.5 comes before part 20.7 in the rules, students often make the error of saying that a claim by a defendant against someone else always requires the court’s permission. That’s not the case. That’s only in relation to part 20.5 claims.
Track/Slide 5
Part 20.1(b) covers claims by a defendant for a contribution or an indemnity against another defendant or against a third party and the procedure for bringing these is set out in part 20.6. When a defendant acknowledges service he can make a claim for a contribution or an indemnity against another defendant to the claim. So if the defendant is suing two defendants, one of the defendants can acknowledge service and can also claim a contribution or an indemnity against the other defendant. What’s a contribution, what’s an indemnity? A contribution is where the defendant will seek liability from the other defendant for part of the sum claimed against him by the claimant. An indemnity is where that defendant will seek for the other defendant to pay all of the sum claimed. The trial judge has the power to apportion liability between defendants under the Civil Liability Contribution Act 1978.
So a defendant doesn’t have to bring this sort of Part 20 proceedings. He could just leave it up to the trial judge to do it. He will have to do it however if the obligation to make a contribution comes out of a contract as set out in section 7 ss 3 of the 1978 Act or of course if he wants to seek a full indemnity because it’s called the Contributions Act, not the Indemnities Act. There’s no prescribed form for what the notice should look like but it is a Part 20 claim and so therefore the usual rules about statement of case apply. Again if the defendant makes this notice at the same time as serving a defence he does not need the permission of the court. If the claim is not for a contribution or an indemnity then a Part 20 claim form is needed.
Track/Slide 6
Part 20.7 deals with a claim by a defendant against a party who is not yet a party to the claim. Now in order for a defendant to bring a Part 20 claim against a non-party, he’ll need to issue a Part 20 claim form or rather the court will need to issue a Part 20 claim form. Now this sort of thing might arise if there was a road traffic accident in which the defendant perpetrated a rear end shunt on the claimant’s car and the claimant might sue the defendant for damages. Now if a garage had allegedly carried out defective work on the defendant’s car which the defendant alleged led to his car malfunctioning, which in turn led to the accident taking place the defendant driver might want to instigate a Part 20 claim against the garage. Therefore the garage would be the Part 20 defendant and the defendant would be the Part 20 claimant.
Again that’s the most straightforward example of this sort of case but the Part 20 claim against a non-party need not necessarily be for the same remedy as the claimant to let’s call it the main claim is seeking to from the defendant to the main claim. Now in circumstances like these where you have a claimant suing a defendant and a defendant bringing a separate claim against a third party problems might arise if at the end of the matter at the substantive trial the court decides that the Part 20 defendant was the person who was solely to blame for the accidenttaking place. The claimant will then have problems because he will have no claim against the third party and he therefore won’t be able to claim damages. So therefore what it would be prudent for the claimant to do is as soon as it comes to his notice that a third party has been brought into proceedings by way of a Part 20 claim seek the court’s permission to add that third party as a second defendant to the main claim. In order to do that he will have to get the court’s permission pursuant to CPR 19.2. There are a number of matters in that part which the claimant will have to show in order to add the third party to proceedings. He will have to show there’s a link between the two types of claim. He will have to there’s a link between the two types of claim. He will have to show that the defendant is after substantially the same remedy from the claimant as he is after from the defendant. And if he is able to get the court’s permission, that way when the matter is tried the court will be able to apportion liability between what will now be the two defendants.
Track/Slide 7
Now the practice direction to Part 20 sets out how Part 20 claims should be titled. Now when drafting counter claims, problems can arise because you’ll have a claimant who’s also a Part 20 defendant and you’ll have a defendant who’s also a Part 20 claimant. If there is a claim where you’ve got a claim against a non-party by a defendant then the heading to the statement of case should look like this. You’ll have the name of the claimant. Let’s call him AB here. You’ll have the name of the defendant. Let’s call them CD. The defendant will also be the Part 20 claimant. And if you’ve got a third party that party, let’s call him EF, will be the Part 20 defendant and their titles will be as set out there.
Track/Slide 8
If you’ve got a counter claim by a defendant against a claimant and also against someone else then the title will be as follows. You’ll have AB who’s the claimant and also the Part 20 defendant. You’ll have CD who’s the defendant and also the Part 20 claimant and you’ll have XY who will just be the Part 20 defendant.
Track/Slide 9
If there’s more than one Part 20 claim then it gets even more complicated. And this is where the court allows matters to be defined as the first claim and the second claim. So here you’ll have the party who’s the claimant and also the Part 20 defendant. You’ll have the defendant who’s also the Part 20 claimant. That’s in respect of his claim against a third party. The third party, let’s call them EF, will be the Part 20 defendant in respect of the first claim by the defendant to the main claim. He also may want to bring his own Part 20 claim against a fourth party and that sort of claim will be titled the “second claim” in the heading and that second claim will be against GH who will be titled “Part 20 defendant, second claim”. Now because Part 20 allows claims against new parties who are themselves subject to Part 20 claims to bring their own Part 20 claims against other parties, it can get extremely confusing like in this case.
Track/Slide 10
That’s a real case from 2002. The facts of the case are even more complex than the title of the proceedings. And in cases like that it will get extremely convoluted and confusing if you try to draft a statement of case describing all these parties in a coherent manner. And this is where Practice Direction part 20.7.4 and 5 come in. Now the usual rules of drafting will be to refer to parties as the claimant, the defendant, the Part 20 defendant and so on and so forth. But in cases like this where you have many parties involved the practice direction allows you to give the parties a shorthand identity. SO for example in that case the Cooperative Retail Services Ltd. we’ll refer to as the Coop, Taylor Construction Ltd. we’ll refer to as Taylor, Flue-Stox Engineering we’ll refer to as Flue-Stox and so on and so forth. And what you want to do if you’re drafting, heaven help you, statements of case in a case like that is have a clause at the beginning of the statement of case explaining who is going to be referred to by what name.
Track/Slide 11
In some situations you may need to apply for permission to bring a Part 20 claim and this is set out in part 20.9. Now when permission is required to bring a Part 20 claim the factors in part 20.9(2) must be referred to. When the court is deciding whether or not to grant permission, it will look at the following factors. Whether or not there is a connection between the Part 20 claim and the claim made by the claimant against the defendant. Let’s call that the main claim. So if the Part 20 claim has no connection with the initial claim then the court might decide not to grant permission. If the Part 20 claimant is seeking substantially the same remedy which the other party’s claiming from him is another factor that the court will need to take into account. So for example if the claimant in the main claim was seeking damages but the defendant was seeking to claim against the Part 20 defendant restitution or some other distinct equitable remedy then the court might find it appropriate not to have the whole proceedings heard together and instead to deny permission and allow those proceedings to be dealt with at a later date.
Also if the claimant wants the court to decide any question concerned with the subject matter of the proceedings not only between existing parties but also between existing parties and a person not already a party and against an existing party not only in a capacity in which he’s already a party but also in some further capacity because again if you have parties being sued in different capacities it might get very confusing to hear them all together and therefore the court might not give permission.
So basically the issue in Part 20.9 is will it make matters easier to have these claims heard together. In the straightforward examples that I gave earlier in relation to the garage for example, it would make matters a lot easier if it was all heard at the same time as it would allow the court to come to a final decision as to who was responsible but if giving permission will just open up further avenues of legal argument and further complexities then the court will probably decide not to give permission and to deal with the claims as a separate claim.
Track/Slide 12
Part 20.8 deals with service of Part 20 claim forms. Now if permission is not needed to serve a Part 20 claim form, so for example if it’s a counter claim against a claimant as opposed to against someone else or if it’s a Part 20 claim against a non-party then those claims need to be served within 14 days of issue of the Part 20 claim. Part 20.2(a) claims, i.e. counter claims, would be served at the same time as the defence. In fact when you come to deal with drafting counter claims what the best thing to do is draft a defence and then following on from that draft the counter claim because chances are the matters in the defence will form a lot of the same argument as the counter claim.
As I said before, failing to acknowledge a Part 20 claim will mean that the recipient thereof will be in default. The limitations set out in part 7 with regard to when the claims need to be issued and served don’t apply to Part 20 claims but the court, if it gives permission to bring a Part 20 claim, will issue other directions with regard to time limits for response and other such matters. And, as I said before, Part 20 claims are statements of case. Therefore they need to be verified by statement of truth and the usual rules about what should be included in statements of case apply.