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
A briefing on fall protection systems for designers
A legal requirement and an ethical must.
CIOB Ireland launches manifesto for 2024 General Election
A vision for a sustainable, high-quality built environment that benefits all members of society.
Local leaders gain new powers to support local high streets
High Street Rental Auctions to be introduced from December.
Infrastructure sector posts second gain for October
With a boost for housebuilder and commercial developer contract awards.
Sustainable construction design teams survey
Shaping the Future of Sustainable Design: Your Voice Matters.
COP29; impacts of construction and updates
Amid criticism, open letters and calls for reform.
The properties of conservation rooflights
Things to consider when choosing the right product.
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.