How to use a counterclaim as a defense tool and why it is feared without reason
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You’ve been sued—did you know you have the right to file counterclaims in the same case and save money by filing a separate lawsuit?
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What conditions must be met for a counterclaim to be accepted by an arbitral tribunal—and what is the main difference between it and a defense?
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When is a counterclaim a powerful tactic, and when is it a mistake that delays the process and increases costs?
The company received a claim from a contractor for payment for work performed. The amount was €18,000. However, the client believed the work was poor quality and had already incurred €12,000 in remedial costs. Should they file a separate claim in the same court? Or file a counterclaim during this process?
A counterclaim in this situation is the right solution. It allows both claims to be heard in a single proceeding, saving on fees, and obtaining a set-off in a single decision.
What is a counterclaim and how is it different from an objection?
An objection is a defendant’s procedural argument against the plaintiff’s claims. The defendant says, “Your claim is unfounded because…” An objection is not an independent claim. If the court denies the plaintiff’s claim, the objection has played a role. But the defendant will receive nothing.
A counterclaim is a separate claim by the defendant against the plaintiff, filed within an ongoing lawsuit. The defendant says, “Your claim is unfounded, and besides, you owe me.” If the counterclaim is upheld, the defendant receives not only a dismissal of the plaintiff’s claim but also a recovery in their favor.
Conditions for accepting a counterclaim in arbitration
Article 38 of the Law on Arbitration Courts stipulates that a counterclaim may be filed if its subject matter is covered by the arbitration agreement. This is a fundamental condition—if the counterclaim goes beyond the scope of the arbitration clause, the arbitral tribunal cannot consider it.
Filing deadline: Unless the parties have agreed otherwise, a counterclaim must be filed no later than the deadline set for filing a response to the claim. In the Riga Arbitration Court, this deadline is before the end of the period for filing an atsauksme. Failure to do so means forfeiting the right to a counterclaim in this proceeding.
Form and content: A counterclaim is filed according to the same rules as the original claim—with a statement of demands, justification, calculation of the amount, and supporting evidence. A separate arbitration fee is paid.
When a counterclaim is beneficial
A counterclaim is justified when: you have a real monetary claim against the plaintiff related to the same contract, the amount of the counterclaim is comparable to or exceeds the amount of the original claim, the evidence for your claim is sufficiently strong, both claims are logically connected, and considering them together will expedite the process.
A typical example: a contractor collects payment for work, and the client files a counterclaim for the cost of repairing defects. The court considers both claims and sets off the amounts.
When a counterclaim is a mistake
Don’t file a counterclaim if your claim is poorly supported by documentation—this will only strengthen the plaintiff’s position, as they will see you as trying to delay or confuse the case.
If the claim is unrelated to the subject of the contract under which the claim is filed, the arbitration court will not accept it, and you will waste time and fees.
If the counterclaim amount is insignificant, the costs of preparing and collecting it may not be worth it. In this case, it’s better to consider filing a separate case after the main one is concluded.
A real case
The landlord filed a lawsuit against the tenant for €15,000 in unpaid rent. The tenant claimed the landlord had breached its obligation to maintain the premises, resulting in additional expenses and loss of customers.
The tenant filed a counterclaim: €6,000 in repair costs and €4,000 in lost profits. A total of €10,000.
The arbitration tribunal considered both claims. The original claim was partially upheld—12,000 euros. The counterclaim was upheld in part for costs—5,000 euros. Ultimately, the landlord received 7,000 euros in enforcement. One trial instead of two.
Three conclusions
First: upon receiving a lawsuit, immediately assess whether you have any counterclaims against the plaintiff. There is a limited time limit for filing a counterclaim.
Second, the counterclaim must be covered by the arbitration agreement. If your claim is covered by another contract, a counterclaim will likely not be eligible.
Third, a strong counterclaim often expedites a settlement. The plaintiff understands that the creditor could become the debtor and is willing to negotiate.
A counterclaim isn’t a defense. It’s an attack from within the process. Use it when you have something to present.
This article is for informational purposes only and does not constitute legal advice.