Benefits of Pleading Counterclaims
Many lawsuits only involve the claims that the party filing the lawsuit asserts against one or more defendants. However, defendants usually have the right (and sometimes the responsibility) to assert any claims that they may have against the party bringing the lawsuit, and these causes of action form a defendant’s counterclaim. Asserting counterclaims in a lawsuit requires a little more effort and expense by the person or company bringing the counterclaim. However, there are many benefits of pleading counterclaims that make it advantageous to assert causes of action against the party filing the complaint when possible.
Bargaining Power
One of the most important benefits of pleading counterclaims is that it gives defendants additional bargaining power when negotiating a settlement to a lawsuit. In cases without counterclaims, the party filing a suit cannot usually be held legally liable to the defendants. This creates an asymmetrical relationship in which one party has more influence and control over the other party.
However, asserting counterclaims levels the playing field between the parties. When all parties have claims against each other, each party could be found legally responsible to the other in the lawsuit. Indeed, defendants may even be able to recover more money through a counterclaim than a plaintiff from the causes of action they assert in their complaint. This liability can influence plaintiffs to settle cases on favorable terms, since a settlement would also typically include defendants’ counterclaims, and counterclaims provide defendants something to bargain with when resolving a lawsuit.
Preserve Claims
Another one of the critical benefits of pleading counterclaims is that this will preserve claims that a defendant has against the plaintiff in a matter. Many jurisdictions prefer that parties plead all of the claims that they have related to the same transaction and occurrence in one lawsuit. The reason for this is because courts do not want piecemeal lawsuits to resolve one dispute between the parties because this would not be efficient on the judicial system. Some courts even prevent parties from asserting some claims against parties at a later time if they did not plead those claims earlier when the parties were in litigation with each other. It is often difficult to determine if parties are required to plead all claims or lose the right to litigate matters, and it is important to speak with an experienced lawyer to determine if claims can be precluded if they are not plead. Nevertheless, it is usually beneficial to plead counterclaims if they are available to avoid the possibility that such claims will be precluded at a later time if not pled earlier.
Discovery Advantages
An understated, but still one of the important benefits of pleading counterclaims, is that this will increase the amount of documents and materials parties can request in a case. During litigation, parties enter “discovery,” a process during which the parties demand and produce relevant materials. Parties are generally allowed to request any materials that are relevant to a claim or defense in a case and are not subject to a privilege like the attorney-client privilege. If the plaintiff asserts claims, and the defendants do not assert counterclaims, then discovery is limited to those claims and defenses to the claims.
However, if the defendants assert counterclaims, documents related to counts in the counterclaims can be demanded and produced. Discovery can be an onerous process, and the need to produce documents related to counterclaims may put more pressure on plaintiffs to resolve a case. Moreover, needing to answer questions under oath about counterclaims can reveal information that a party does not wish to disclose, which can further pressure plaintiffs. Since counterclaims can expand the universe of materials relevant to a case, counterclaims can have a substantial impact on the trajectory of discovery in a matter.
Image Before the Factfinder
Another one of the benefits of pleading counterclaims is how this can be perceived before the finder of fact, whether that is a judge or a jury. If there is just a plaintiff asserting claims against defendants, it can be easy for a finder of fact to believe that the defendants did something wrong and that is why they are being hauled into court. Indeed, when there are simply claims made by a plaintiff, there are only allegations going in one direction, and the defendants are simply defending the assertions made by plaintiffs in the case.
However, if defendants are asserting counterclaims against plaintiffs, it seems like there are more parties at fault in a case. Indeed, counterclaims allow plaintiffs to fire back and make more arguments about how plaintiffs acted poorly, and this can influence how a finder of fact makes a determination against a party for all claims in a lawsuit. Sometimes, when counterclaims are made, the caption of the lawsuit is amended to reflect that a party is a “Plaintiff/Counterclaim Defendant” and counterclaims could put parties on the defensive in ways not possible if there are no counterclaims in the case.
It is important that parties draft comprehensive counterclaims to have the best chance at being effective in litigation. The Rothman Law Firm is experienced with counterclaims and all types of litigation matters. If you are looking for an experienced New York and New Jersey attorney to handle your counterclaim or other legal issue, please feel free to contact The Rothman Law Firm to request a free consultation.