Responding to a Claim — SQE1 FLK1 Dispute Resolution

Your client's managing director opens the post on 20 May and finds a claim form. His solicitors had confirmed to the other side that they were instructed to accept service, and the papers were served at their office on 1 May. Through an internal oversight the papers sat there for nineteen days. He wants to know how long he has to acknowledge service. None. The time ran out on 15 May.

Everything here runs off a clock that starts on service, whether or not anybody has read the papers. This is Responding to a Claim: what a defendant can do, how long they have, and what happens when the time runs out. Keep your managing director in mind. He is not finished.

Here is the route. The clock first: acknowledging service, and the two deadlines for a defence. Then how to count the days and how to extend them. Then admissions, what a defence must say, and counterclaims and set-off. Then disputing jurisdiction. Then judgment in default and how to get it set aside. And finally how a claim ends without a trial.

Start with the clock, because most marks in this topic are on it. A defendant served with a claim gets a response pack, and has a small number of real choices. Defend it. Admit it, in whole or in part. Dispute the court's jurisdiction. Or do nothing, and let the claimant ask for judgment.

First step, acknowledgment of service. Under CPR 10.3 it must be filed within 14 days after service of the particulars of claim. The form is N9, from the response pack. It tells the court two things: whether you intend to defend all or part of the claim, and whether you intend to dispute jurisdiction. Calendar days, not working days.

Then the defence, and here is the rule the whole topic hangs on. CPR 15.4 gives two periods. 14 days after service of the particulars of claim. Or 28 days after service of the particulars, if you have filed an acknowledgment of service.

Read that again, because the trap is in the words. Both periods run from service of the particulars. Neither runs from the date you acknowledged. Acknowledging on day two does not shorten your time, and acknowledging on day fourteen does not extend it. Adding 14 days to the acknowledgment date is the classic wrong answer, and it is offered as an option again and again.

Now counting. Under CPR 2.8(3) you do not count the day the period begins. Serve the particulars on 2 March and the 14 days run from 3 March, ending on 16 March. The defendant has the whole of that day. So the earliest date a claimant can ask for judgment is 17 March. One day out either way is a wrong answer.

And weekends. Only a period of five days or less excludes weekends and bank holidays. 14 days and 28 days are long periods, so they run straight through Saturdays, Sundays and bank holidays. Do not stop the clock at the weekend.

Can you buy more time? Yes, but only so much. Under CPR 15.5 the parties may agree to extend the period for filing a defence by up to 28 days. The defendant must then notify the court of the agreement in writing. So try one. The claimant's solicitor generously agrees six weeks. How much of that works? 28 days of it. The last two weeks need an order from the court.

Which brings us back to your managing director, and why the papers sitting in a solicitor's office made no difference. Under CPR 6.7 a defendant's solicitor may notify the claimant in writing that they are instructed to accept service. The claim form must then be served at that solicitor's business address. Service there is service on the defendant. Time ran from 1 May. What happened inside the company afterwards changes nothing.

Admissions next. Under CPR 14.2 a party may admit the whole or any part of another party's claim, by notice in writing. A full admission concedes liability and the amount. A part admission is the useful one. It lets a defendant who accepts liability but disputes the figure stop interest and costs running on a sum that was never really in issue.

But watch what a part admission does not do. Where part of a money claim is admitted, the claimant may give written notice under CPR 14.4(2) that the claim continues for the balance. On that balance the defendant is exactly where it would have been if it had said nothing at all. No defence to the unadmitted part means judgment in default on the unadmitted part.

A defendant admitting a money claim can also ask for time to pay. Under CPR 14.6 it proposes the date by which the debt is to be paid, or the times and rate of instalments. If the claimant will not accept, the rate is decided by the court, not by the claimant. Where the amount outstanding is not more than £50,000, a court officer can decide it without a hearing.

Now a trap that costs people the case before it starts. The response pack contains different forms for different answers. N9 is the acknowledgment of service. N9A is the admission form for a specified amount. Return the admission form thinking you have bought the longer period for a defence, and you have acknowledged nothing. Withdrawing an admission needs consent or the court's permission.

The defence itself. Under CPR 16.5 you must deal with every allegation in the particulars, and there are exactly three things you can say about each one. Admit it. Deny it. Or say you are unable to admit or deny it, and require the claimant to prove it. That third option exists for allegations genuinely outside your knowledge.

And a denial has to work for its living. Under CPR 16.5(2) a defendant who denies an allegation must state the reasons for the denial. And if it intends to put forward a different version of events, it must state that version. The defendant denies the allegation of negligence, and nothing more, is not a defence. It is a document that will attract an order to serve a proper one, usually with a costs sanction.

Silence is worse. Fail to deal with an allegation and you are taken to admit it, unless the defence sets out the nature of your case on the issue that allegation goes to. So an omission is not neutral. It concedes.

But the rule is deliberately one-sided, and this catches people out. Under CPR 16.7 a claimant who files no reply to a defence is not taken to admit what the defence says. A reply is optional. A defendant's silence admits; a claimant's silence does not.

Set-off belongs in the defence. Under CPR 16.6, where a defendant says the claimant owes it money and relies on that as a defence, the contention goes in the defence. It is set off against the claim. Note the limit. Set-off reduces or extinguishes what is claimed. It cannot put money the other way. For that you need a counterclaim.

Counterclaims are Part 20. The timing rule is simple and worth having cold. File the counterclaim with your defence and you need no permission at all. File it at any other time and you need the court's permission. And if the defence has already been served, you also need consent or permission to amend it, under CPR 17.1(2).

Two things people get wrong. First, a counterclaim does not have to arise out of the same facts as the claim. You may counterclaim for any claim you have against the claimant, however unrelated. Connection matters later, and for a different purpose: under CPR 20.9 the court weighs it in deciding whether the two should be tried together.

Second, there is no acknowledgment of service to a counterclaim. Part 10 does not apply to it. What does apply is Part 12: a claimant who files no defence to a counterclaim in time faces judgment in default on it, exactly as a defendant would. Deciding the counterclaim is worthless is not a response to it.

Disputing jurisdiction is Part 11, and it is strict and sequential. First, file an acknowledgment of service ticking the box that says you intend to contest jurisdiction. Then apply, and the application must be made within 14 days after filing that acknowledgment. Miss those 14 days and you are treated as having accepted that the court has jurisdiction to try the claim.

Hoddinott v Persimmon Homes, 2007. The defendant acknowledged service indicating an intention to contest jurisdiction, then did not apply within the 14 days. The Court of Appeal held the right to dispute jurisdiction was gone. Ticking the box preserves the position only if the application follows in time. If you need longer, apply for an extension before the period runs out.

Two more points on Part 11. While your application is pending you need not file a defence before the hearing, so you cannot be in default of one. But nothing is stayed automatically; a stay is an order the court may make, not something that happens on issue. And if your application fails, the acknowledgment ceases to have effect, you may file a further one within 14 days, and the court gives directions.

Judgment in default. Under CPR 12.3 the claimant may have it in two situations. No acknowledgment and no defence, and the time for filing has expired. Or an acknowledgment filed, but no defence, and the time for the defence has expired. Simple enough. The interesting part is when those conditions are tested.

They are tested at the moment judgment would be entered. Which is the way back for your managing director. A defence filed late, but filed before judgment is entered, defeats the request: the conditions are no longer satisfied, and the defence stands unless the court strikes it out. Late is bad. Late is survivable. Absent is not.

There is a second block on default judgment, in CPR 12.3(3). A claimant may not obtain it while the defendant has an undisposed-of application for summary judgment, or to strike out the statement of case under CPR 3.4. So a pending strike-out application holds the door shut even after the defence period has gone.

How is default judgment obtained? Usually not by a judge at all. Where the CPR 12.3 conditions are met, the claimant files a request at court. Form N225 for a specified sum, form N227 where the amount is to be decided. No application notice, no evidence, no hearing; a court officer enters it.

An application to a judge is needed only in the defined cases in CPR 12.11. A claim against a child or a protected party. A claim in tort between spouses or civil partners. A defendant served out of the jurisdiction. And if the claim is for an unspecified sum, CPR 12.5 gives judgment for an amount to be decided by the court, with costs. Liability is settled; the figure is not.

Setting aside. Under CPR 13.3 the court may set aside a default judgment that was regularly entered. The test is a real prospect of successfully defending the claim, or some other good reason. And in exercising that discretion the court must have regard to whether the application was made promptly.

Two things follow. A defendant with documents showing the debt was paid before the claim was issued has a real prospect, and a good excuse for the default is not essential. But promptness is: days or weeks, not months. Delay can lose a defence that would otherwise have succeeded.

Once judgment is entered, two numbers matter. The judgment debt carries interest at a flat 8% under s 17 of the Judgments Act 1838. The same 8% applies to County Court money judgments of £5,000 or more. It is a fixed figure, not a margin over base rate, and it runs whether or not the contract said anything about interest.

And under CPR 40.11 a money judgment must be complied with within 14 days of the date of judgment, unless the judgment or an order says otherwise. Until that period runs the debtor is not in default, so there is nothing yet to enforce. An enforcement application three days after judgment is premature.

Last, the ways a claim ends without a trial. A claimant may discontinue under Part 38 by filing a notice of discontinuance, Form N279, and serving it on all parties. It carries costs consequences, so it is never simply free.

And settlement. A consent order is a public court order embodying what the parties agreed. A Tomlin order keeps the terms out of it: the order stays the proceedings on the agreed terms, and the terms sit in a confidential schedule. The catch is that the schedule is not an order, so you cannot enforce it directly. You apply under the liberty to apply for an order to pay, then enforce that.

A word on how SQE1 tests this. You will not be asked to recite a rule number or a case name. You get a scenario, five answers, and one instruction: pick the best. But procedure is different from the black-letter subjects, because here the rule is the answer, and the wrong options are usually plausible periods and plausible procedures.

If you keep only three. CPR 15.4, because both defence periods run from service of the particulars and neither runs from the acknowledgment. CPR 16.5, because a bare denial is not a defence and silence is a deemed admission. And Hoddinott v Persimmon Homes, for the 14 days that decide whether you can still argue about jurisdiction at all.

Four traps. One: the acknowledgment gives you time, not protection. It buys the longer period for the defence and nothing more. File the acknowledgment, then file nothing, and you are exposed to judgment in default the day after the defence was due.

Two: a part admission is not a response to the rest of the claim. Admit part, ignore the balance, and the claimant gets judgment in default on the balance. Three: an agreement to extend the defence period is capped at 28 days, and the court has to be told about it in writing. Anything beyond that needs an order.

Four: match the form to the answer you actually want to give. N9 acknowledges service. N9A admits a specified sum. N225 requests judgment in default for a specified sum. N279 discontinues. Then a habit for the exam. Find the date of service of the particulars, count from the day after it, and ask what has been filed at court. Not what was written in a letter.

Quick check. A company is served with a claim form on 1 April, with the particulars of claim attached to it. It disputes the claim but wants time to take advice on a limitation point. Its solicitor files an acknowledgment of service on 10 April, indicating an intention to defend the whole claim. The claimant has refused to agree any extension. By what date must the company file its defence?

Three candidate answers. One: 15 April, which is 14 days after service of the particulars of claim. Two: 24 April, which is 14 days after the acknowledgment of service was filed. Three: 29 April, which is 28 days after service of the particulars of claim. Pause here if you want a moment.

The answer is three. Under CPR 15.4(1)(b), a defendant who files an acknowledgment of service must file the defence within 28 days after service of the particulars of claim. The particulars were served with the claim form on 1 April, so the 28 days run from that date and expire on 29 April.

Option one fails because 14 days after service is the period that applies only where no acknowledgment has been filed. Option two is the classic error: no period is measured from the date of the acknowledgment. Acknowledging early does not shorten the period, and acknowledging on the fourteenth day does not extend it.

Five things to take away. One: 14 days to acknowledge service. Both defence periods run from service of the particulars, not from the acknowledgment. 14 days without an acknowledgment, 28 days with one. Two: do not count the day the period starts, and do not stop for weekends unless the period is five days or less.

Three: a defence must deal with every allegation, a denial needs reasons and any different version of events, and an allegation you ignore is one you have admitted. Four: file a counterclaim with the defence and you need no permission, and it need not be connected to the claim.

Five: the default judgment conditions are tested when judgment would be entered. That is why a late defence, filed before that moment, still saves your managing director. Next time, Statements of Case.

Practise this topic with exam-style questions at sqe1prep.co.uk. This episode is for education and exam revision only, not legal advice, and we are not affiliated with or endorsed by the SRA or Kaplan.