Q&As

Can a defendant bring a Part 20 counterclaim against an additional party where that additional party is a limited company subject to a company voluntary arrangement, or is there a prohibition against Part 20 counterclaims against insolvent companies?

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Produced in partnership with Phillip Patterson of Gatehouse Chambers
Last updated on 25/10/2021

The following Restructuring & Insolvency Q&A produced in partnership with Phillip Patterson of Gatehouse Chambers provides comprehensive and up to date legal information covering:

  • Can a defendant bring a Part 20 counterclaim against an additional party where that additional party is a limited company subject to a company voluntary arrangement, or is there a prohibition against Part 20 counterclaims against insolvent companies?

Can a defendant bring a Part 20 counterclaim against an additional party where that additional party is a limited company subject to a company voluntary arrangement, or is there a prohibition against Part 20 counterclaims against insolvent companies?

This question is asked in the abstract and without reference to any specific set of proceedings or identified company voluntary arrangement (CVA). It is also not stated at what stage of the proceedings the intention to bring the counterclaim has arisen.

CPR 20 covers a number of distinct types of additional claim, as set out in CPR 20.2(1):

‘…(1) This Part applies to—(a) a counterclaim by a defendant against the claimant or against the claimant and some other person; (b) an additional claim by a defendant against any person (whether or not already a party) for contribution or indemnity or some other remedy; and (c) where an additional claim has been made against a person who is not already a party, any additional claim made by that person against any other person (whether or not already a party).’

The term ‘counterclaim’ typically refers to a claim brought by the defendant in existing proceedings against either the claimant or the claimant and another third party. This is distinct from an ‘additional claim’ in which the defendant in existing proceedings claims against one or more third parties who are not existing parties. The

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Key definition:
Counterclaim definition
What does Counterclaim mean?

A claim brought by a defendant in response to the claimant's claim, which is included in the same proceedings as the claimant's claim.

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