The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
There are five main types of set-off:
independent set-off (sometimes known as legal set-off or statutory set-off)
transaction set-off (also known as equitable set-off)
insolvency set-off, and
banker's set-off (sometimes known as current account set-off)
This Practice Note examines the characteristics of the five main types of set-off.
For information on set-off in general, see Practice Note: What is set-off and when is it available?
Independent set-off operates as a procedural defence which can be used in court proceedings. It is used to set-off reciprocal claims which (unlike Transaction set-off) are independent of each other and unconnected.
Independent set-off is sometimes described as legal set-off or statutory set-off.
The term independent set-off is usually used to encompass:
statutory set-off (also known as legal set-off)—a form of set-off available under rules carried over from 18th century legislation known as the Statutes of Set-Off, and
set-off arising by analogy with the Statutes of Set-Off (ie where all of the conditions for statutory set-off are present but one of the claims is equitable, rather than legal)
Statutory set-off was originally contained in the Insolvent Debtors Relief Act 1729 and the Debts Relief Amendment Act 1735 (known together as the Statutes of Set-Off). Both of those statutes have been repealed but their effect has been preserved by the Civil Procedure Rules (CPR 16.6) which
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234