Today I’d like to discuss three terms commonly seen in civil litigation – counterclaims, crossclaims, and third party claims – and what they mean.

Counterclaims

In a civil proceeding a counterclaim refers to a claim made by the defendant against the plaintiff (or the plaintiff and another person). This claim may be an effort by the defendant to offset the plaintiff’s original claim relating to the main action, or it may be an entirely different claim not relating to the main action.

The Ontario Rules of Civil Procedure* provides the following with respect to counterclaims:

27.01

(1) A defendant may assert, by way of counterclaim in the main action, any right or claim against the plaintiff including a claim for contribution or indemnity under the Negligence Act in respect of another party’s claim against the defendant.

(2) A defendant who counterclaims against a plaintiff may join as a defendant to the counterclaim any other person, whether a party to the main action or not, who is a necessary or proper party to the counterclaim.

For example, if A sues B for unpaid accounts, B may file a counterclaim against A for damages as a result in the corresponding delay of service. This would be a counterclaim relating to the main action.

B may also file a counterclaim against A for unpaid personal debt not relating to the accounts in dispute. Such a claim for unpaid personal debt is generally permitted as a counterclaim because it involves the same parties as the main action.

Crossclaims

A crossclaim refers to a claim brought by the defendant in the main action against a co-defendant who may be liable for all or part of the plaintiff’s claim or for an independent claim arising out of the same transaction or a related transaction.

Here’s what the Rules state on the subject of crossclaims:

28.01

(1) A defendant may crossclaim against a co-defendant who,

(a) is or may be liable to the defendant for all or part of the plaintiff’s claim;

(b) is or may be liable to the defendant for an independent claim for damages or other relief arising out of,

(i) a transaction or occurrence or series of transactions or occurrences involved in the main action, or

(ii) a related transaction or occurrence or series of transactions or occurrences; or

(c) should be bound by the determination of an issue arising between the plaintiff and the defendant.

(2) A defendant who claims contribution from a co-defendant under the Negligence Act shall do so by way of crossclaim.

For example, A sues defendants B and C. Co-defendant B may bring a crossclaim against C under an indemnity agreement. However, if the crossclaim has no real connection with the plaintiff’s claim in the main action, the crossclaim will be struck out.^

Third Party Claims

A third party claim refers to a claim brought by the defendant against a third party that was not named by the plaintiff. A defendant is not allowed to bring a claim against a third party if the claim is independent of the outcome of the main action.

The Rules have the following to say about third party claims:

29.01 A defendant may commence a third party claim against any person who is not a party to the action and who,

(a) is or may be liable to the defendant for all or part of the plaintiff’s claim;

(b) is or may be liable to the defendant for an independent claim for damages or other relief arising out of,

(i) a transaction or occurrence or series of transactions or occurrences involved in the main action, or

(ii) a related transaction or occurrence or series of transactions or occurrences; or

(c) should be bound by the determination of an issue arising between the plaintiff and the defendant.

For example, A sues B, an accountant, for bad tax advice. Accountant B, who received the information from B’s solicitor C, may in turn bring a third party claim against C for the advice given since C might be found liable for part of A’s damages.#

* R.R.O. 1990, Reg. 194

^Metallizing Co. v. Kavanagh, [1946] O.W.N 645 (H.C.)

#Cardar Investments Ltd. v. Thorne Riddell (1989), 71 O.R. (2d) 29, 36 O.A.C. 280 (Div. Ct.)

Please Note: This article is provided for information and educational purposes. It does not constitute legal advice and should not be regarded as such. Regulation referred to may have been amended or repealed since the publication of the article.