Once a lawsuit has been filed against a party, any claim made in response by such defendant is considered to be a counterclaim. An independent cause of action asserted by the defendant in the first case against the plaintiff is a counterclaim. Both the plaintiff’s claims and the defendant’s claims are resolved during the same proceeding. Certain counterclaims are compulsory, while others are permissive.
A counterclaim must be independent and go beyond an answer or a denial of the plaintiff’s original claims. A defendant must include his or her claim within the same document as he or she provides as an answer to the plaintiff’s claims. The procedure associated with the filing of this document varies by jurisdiction. Some jurisdictions may grant an extended time period for filing counterclaims.
Compulsory counterclaims are those that, at the time the case is initiated, arise out of the same transaction or subject matter of the plaintiff’s pleadings. These claims cannot add another party to the case if the court cannot acquire jurisdiction over the third party. The claim cannot be one that is the subject of another lawsuit at the time the current suit was initiated. The court must also have personal jurisdiction over the party making the counterclaim, or if personal jurisdiction was not established, some form of mandatory claim must be filed.
Any compulsory counterclaim not made in a current case is lost forever. The defendant to the initial pleadings must make any and all required counterclaims he or she may have against the other party, or they are waived forever. A permissive counterclaim is one that is not compulsory. These claims may be raised, but the right to raise them is not waived if the defendant chooses not to raise them at that time.
Offset is an example of a counterclaim where the defendant asks to reduce damages in a claim based upon an independent cause of action. Where two parties have been in an accident and it is unclear which party is at fault, one party might sue the other party, claiming damages due to the accident. The other party becomes a defendant and might file a counterclaim stating that in fact the plaintiff was at fault for the accident and should pay damages to the defendant.