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Third party vs Counterclaim


sarcasticlemon

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sarcasticlemon
  • Law Student

I can’t understand why I got this question wrong in my bar exam prep. 
 

“Vernon is the defendant. He wants to assert a claim against the plaintiff, Victor, and against Sheryl, another individual who is not currently a party to the action. What is the most appropriate action for Vernon to take?”

 

I thought it was to issue a counter claim against Victor and A third party claim against Shreya. But apparently that’s wrong, and it should be a counterclaim against both. 
 

Why is that wrong? Just efficiency? It also didn’t say she was a defendant, so it seemed a third party claim is best? 

 

 

And then later, to add a defendant they say to use a third party claim not a counterclaim. I don’t get why🥲

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BlockedQuebecois
  • Lawyer
Posted (edited)

A counterclaim says “I am being sued, and I would like to assert a (usually related) claim against others, including but not limited to the claimant”. 

A third party claim says “I am being sued, and if I lose I would like to say that someone else (also) caused the loss I am being accused of causing.”

Vernon wants to bring a claim against both Victor and Shreya. He doesn’t want to bring a claim against Victor and pass off any liability for Victor’s claim to Shreya. 

Edited by BlockedQuebecois
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sarcasticlemon
  • Law Student

@BlockedQuebecois so a third party claim is used by a defendant to split liability, but a counterclaim is for the defendant to basically become a plaintiff?

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loonie
  • Articling Student
Posted (edited)

Cross-claims and third-party claims are used more to indemnify a party and for apportioning liability between parties potentially at fault from the damages caused by the same event in the main action (the main difference between the two being what you mentioned, that for a cross-claim the party is already a defendant to the main action, and for a third-party claim, it is a new party than one listed in the main action.

A counterclaim, on the other hand, is a separate claim. It doesn't have to arise from the same facts as what is being is litigated in the main action, although it usually does and both the claim in the main action and counterclaim are usually heard together in the same trial. An odd example, but one that comes to mind initially, is Judge Judy where, for instance, the plaintiff is a landlord claiming outstanding rent against a defendant, and the defendant is counter-claiming for something like entering the property without notice and causing damage to personal property. These claims are separate where, like you said, the plaintiff become a defendant to the counterclaim -- it does not have to do with contribution or indemnity per se like cross-claims and third-party claims. 

I think the reason you went wrong (and I don't blame you at all) is because you got a bit hung up on the third-party aspect and automatically thought it had to be a third-party claim for that reason. But, that wouldn't really make sense in this scenario. Vernon wants to bring a separate counter-claim against both parties, which can be solely against the plaintiff in the main action or jointly against the plaintiff and another party. 

Edited by loonie
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  • 3 months later...
Bob Jones
  • Lawyer
On 5/22/2024 at 5:43 PM, sarcasticlemon said:

@BlockedQuebecois so a third party claim is used by a defendant to split liability, but a counterclaim is for the defendant to basically become a plaintiff?

Counterclaim = countersue the person suing you. 
 

Third party = let’s bring in some unrelated party into this, who is really responsible for the issue. 
 

As an example, Bob buys a house from ABC corp. Turns out the house had a number of defects, so Bob issues a claim against ABC for damages, and costs to affect the repairs  

ABC issues a BS counterclaim against Bob (for whatever reason, defamation for example based upon allegations in the SOC, which are now public), but ABC also brings a third party claim against DEF, who were the contractors responsible for the construction job and related defects. 

On 5/22/2024 at 4:23 PM, sarcasticlemon said:

I can’t understand why I got this question wrong in my bar exam prep. 
 

“Vernon is the defendant. He wants to assert a claim against the plaintiff, Victor, and against Sheryl, another individual who is not currently a party to the action. What is the most appropriate action for Vernon to take?”

 

I thought it was to issue a counter claim against Victor and A third party claim against Shreya. But apparently that’s wrong, and it should be a counterclaim against both. 
 

Why is that wrong? Just efficiency? It also didn’t say she was a defendant, so it seemed a third party claim is best? 

 

 

And then later, to add a defendant they say to use a third party claim not a counterclaim. I don’t get why🥲

This could be correct but perhaps there’s more to the question then you recall, or the wording was being awkward “issue a claim.”

Practically speaking, it’s unlikely it would make any difference which way you proceeded in the real world. If there was an issue, the Third party would raise it quickly, and the matter would probably end up as a Case Conference/Chambers Appointment and the matter would be addressed. 

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BlockedQuebecois
  • Lawyer

Putting aside the slightly inaccurate definition of a counterclaim, I'm not sure "this doesn't matter because if you fuck it up, the consequence will just be your client paying a boatload of extra costs, including the other side's costs" is good advice. 

It's certainly not the type of advice I would revive a four month old thread to share. 

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BHC1
  • Lawyer
12 hours ago, Bob Jones said:

Counterclaim = countersue the person suing you. 
 

Third party = let’s bring in some unrelated party into this, who is really responsible for the issue. 
 

As an example, Bob buys a house from ABC corp. Turns out the house had a number of defects, so Bob issues a claim against ABC for damages, and costs to affect the repairs  

ABC issues a BS counterclaim against Bob (for whatever reason, defamation for example based upon allegations in the SOC, which are now public), but ABC also brings a third party claim against DEF, who were the contractors responsible for the construction job and related defects. 

This could be correct but perhaps there’s more to the question then you recall, or the wording was being awkward “issue a claim.”

Practically speaking, it’s unlikely it would make any difference which way you proceeded in the real world. If there was an issue, the Third party would raise it quickly, and the matter would probably end up as a Case Conference/Chambers Appointment and the matter would be addressed. 

In Ontario, rule 27.01(2) states a defendant asserting a counterclaim against a plaintiff may use it to join as a defendant to the counterclaim any other person whether they are a party to the action or not.

One practical difference of a counterclaim over a third party claim is a party brought into the action through a counterclaim is forced to be a defendant in the main action (r 27.03), whereas under a Third Party claim it is not required and only permissible where ‘appropriate’ (r 29.05). Moreover, you will have to pay 2 filing fees instead of one (you just cost your client an extra $243 disbursement). 

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Bob Jones
  • Lawyer
10 hours ago, BlockedQuebecois said:

Putting aside the slightly inaccurate definition of a counterclaim, I'm not sure "this doesn't matter because if you fuck it up, the consequence will just be your client paying a boatload of extra costs, including the other side's costs" is good advice. 

It's certainly not the type of advice I would revive a four month old thread to share. 

Pretty sure the only costs are to your ego and your annoying passive aggressive remarks. 
 

Any serious litigator will know that’s exactly how counterclaims and third party claims work, and while mistakes should be avoided, a minor procedural issue can be addressed with little to no cost, other then the other side unnecessary bickering with you, which I gather is how you run your practice. 

Edited by Bob Jones
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BlockedQuebecois
  • Lawyer
32 minutes ago, Bob Jones said:

Pretty sure the only costs are to your ego and your annoying passive aggressive remarks. 
 

Any serious litigator will know that’s exactly how counterclaims and third party claims work, and while mistakes should be avoided, a minor procedural issue can be addressed with little to no cost, other then the other side unnecessary bickering with you, which I gather is how you run your practice. 

I meant for my post to be a tad sassy, but I certainly didn’t intend to cause this level of emotional distress. My apologies. 

Edited by BlockedQuebecois
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