Separate what their claim is worth from what it costs to fight
Keep the tested value of their claim on one page and the cost of fighting it on another, then decide with both in front of you. A claim can be weak on the evidence and still worth settling, or strong and still worth fighting.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
Why it matters
A weak counterclaim can still cost you money. It is deducted from what you are owed while it is argued. Answering it can cost more than the gap. And an adjudicator's decision has to be complied with, even if you think it is wrong. A strong counterclaim can still be worth fighting if the money held back is bigger than the claim. Fold those facts into the valuation as a discount, and nobody can see what the evidence supports. Turn them into a percentage chance, and someone has made up a number your directors will rely on. On separate pages, each says what it honestly can.
How to do it
- Test their claim head by head, and write what the evidence supports on its own page.
- List the commercial facts on a separate page: the money they are holding, your own claim, the fees still to spend, the timetable and their payment record.
- Ask your solicitor what you would have to do if the decision went against you, and how quickly.
- Describe in words what those facts suggest, without a percentage or a rating.
- Put both pages in front of whoever makes the decision, and let them weigh the two together.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's £140,000 final account is met with a £90,000 counterclaim for delay and defects. The main contractor is holding £60,000 of the account while it is argued. The director asks for one number to decide on.
What happens
- The counterclaim is tested head by head. £35,000 is supported by the records, £40,000 is disputed with the documents shown, and £15,000 has no evidence behind it at all.
- A second page lists the money held, an estimated £15,000 of fees to reach an adjudicator's decision, and the main contractor's record of paying late but in full.
- The page describes in words what the facts support: a counterclaim mostly unproven, more money held back than is supported, and a payer that pays in the end.
The outcome
The director offers £30,000 against the counterclaim in return for release of the money held. The director knows the supported figure is £35,000 and why the offer sits below it, instead of being handed one discounted number that hides both.
To have this done for you, see our Counterclaim Defence service.