Counterclaim in construction
A counterclaim is a claim set up in opposition to another claim, that is, a claim by a party against a another party who has made a claim against them. This is not a defence to a claim, it is separate from it and proceeds even if the original claim is ended.
Counterclaims are often confused with abatement and set off.
Set off (or contra charging) is only permitted if a breach of contract by a party making a claim is so closely associated with the claim that it would not be just to consider the claim without also taking the breach into account (or where the claims are both for payment of readily ascertained debts).
Whilst set off is often accompanied by a counterclaim it is to be distinguished in that a counterclaim may be entirely different in nature to the claim, and set off, unlike a counterclaim, cannot give rise to a positive balance of claim whilst a counterclaim may exceed the amount of the initial claim.
Abatement argues that an amount claimed is incorrect because of defects in the work. If the defect is proved, then the valuation of the amount due may be reduced by the reduction in value of the works resulting from the defect.
Counterclaims can be used as tactics in legal cases, to confuse or delay proceedings, or to reduce awards. However, this has risks associated with it, and may simply result in higher costs.
Before the 2011 amendments to the Housing Grants Construction and Regeneration Act, set off and counterclaim were only permitted if a withholding notice was issued, whilst abatement did not require a withholding notice as the value of the works had been reduced and there was only an obligation to pay the amount properly due.
Since 2011 however, set off, counterclaim and abatement all require that a pay less notice is issued.
[edit] Related articles on Designing Buildings Wiki
- Abatement.
- Adjudication.
- Alternative dispute resolution.
- Housing Grants Construction and Regeneration Act.
- Set off.
[edit] External references
- A Straume (UK) Ltd v Bradlor Developments Ltd.
- Urang Commercial v Century Investments and Eclipse Hotels (Luton).
- Whyte and Mackay Ltd v Blyth & Blyth Consulting Engineers.
Featured articles and news
Net zero electricity grids BSRIA guide NZG 5/2024
Outlining the changes needed to transition to net zero.
CIOB Global Student Challenge 2024
Universitas Indonesia wins for second year running.
New project and cultural district described in detail.
The nature of EPCs, crticism and inaccuracies.
History, issues and redesign.
From waste recycling to energy performance the hierchy.
An introduction to WERCS and WEEE responsibilities
Dealing 2 million tonnes of waste equipment a year.
Global BACS Market: analytics and optimisation
A BSRIA glance at building automation and control systems.
What it is and how to use it.
Types of insulating plaster by binder and insulant.
Investors in People: CIOB achieves gold
Reflecting a commitment to employees and members.
Scratching beneath the surface; a guide to selection.
ECA 2024 Apprentice of the Year Award
Entries open for submission until May 31.
UK gov apprenticeship funding from April 2024
Brief summary the policy paper updated in March.
For the World Autism Awareness Month of April.