Responding to the claim

Early steps available

What steps are open to a defendant in the early part of a case?

Once a defendant has been served with a claim it must take prompt action within the prescribed time frames to ensure that the claimant cannot apply for default judgment to be entered against it (see question 28).

If a defendant wishes to dispute the claim, it must file and serve an acknowledgment of service in the prescribed form at the court registry within 14 days of service of the claim form. It must then file a defence in accordance with Part 10 CPR within 28 days of service of the claim form. Where a defendant has been served out of the jurisdiction, the relevant time frames are typically 35 days for filing and service of the acknowledgment of service and 56 days for filing and service of the defence. If a defendant has a counterclaim or claim against a third party, this may be brought in accordance with Part 18 CPR. This is discussed in further detail in question 26.

Where a defendant wishes to dispute the court’s jurisdiction to try the claim or to argue that the court should not exercise its jurisdiction, including on the grounds of forum non conveniens, it must still file an acknowledgment of service at the court office containing a notice of intention to defend the claim (CPR 9.2(1)). The act of filing an acknowledgment of service does not mean that a defendant loses its right to dispute the court’s jurisdiction; however, taking other substantive steps in the proceedings (such as filing a defence) will usually be treated as submitting to jurisdiction. The exception to this position is when such steps are taken at the same time and without prejudice to contesting the jurisdiction of the court. A defendant wishing to dispute the court’s jurisdiction must deploy the procedure set out in CPR 9.7 to apply to the court for a declaration. An application under CPR 9.7 must be made within the period for filing a defence (CPR 9.7(3)).

Where a defendant has been served outside the jurisdiction and contends that the court should not exercise its jurisdiction in respect of any proceedings, it may apply to the court for a stay and a declaration to this effect. CPR 9.7A sets out the procedure for such an application, which may be made at any time (CPR 9.7A).

If a defendant applies for a stay on the grounds of forum non conveniens, this will only be granted where the court is satisfied that there is some other available forum having competent jurisdiction in which the claim may be tried more suitably for the interests of the parties and the ends of justice (Spiliada Maritime Corporation v Consulex Ltd [1987] AC 460). The principles that the court will apply in determining an application for a stay on the grounds of forum non conveniens may be summarised as follows:

  • the defendant must establish that he or she is amenable to the jurisdiction that he or she asserts to be the more appropriate forum;
  • the defendant must establish that there is some other available forum having competent jurisdiction that is the more appropriate forum for the trial of the action; and
  • where the court is satisfied that there is another forum that is prima facie the appropriate forum for the trial of the action, the burden will fall upon the claimant to show that there are circumstances by reason of which justice requires that the trial should still take place in the BVI.
Defence structure

How are defences structured, and must they be served within any time limits? What documents need to be appended to the defence?

CPR 10.5 prescribes that a defence must set out as concisely as possible all the facts on which the defendant relies to dispute the claim. It must state which (if any) allegations in the claim form or statement of claim are admitted, denied or neither admitted nor denied. The defence must also state which allegations the defendant wishes the claimant to prove. Where allegations are denied, the defendant must state the reasons for doing so. Where it intends to prove a different version of events from that given by the claimant, the defendant’s own version of events must be set out. Any documents that are considered necessary to the defence must be annexed thereto.

A defence must be filed and served within 28 days of service of the claim form, or within 28 days of service of the statement of claim (if this was not filed with the claim form). Where a claimant has obtained the leave of the court to serve a defendant outside of the jurisdiction, the court order will make provision for the dates by which filing and service of the defence must take place; however, this time frame is typically 56 days.

Changing defence

Under what circumstances may a defendant change a defence at a later stage in the proceedings?

The rules pertaining to the amendment of a statement of case (which includes a defence) are set out in Part 20 CPR and are discussed in question 20. A defendant is not permitted to rely on any allegation or factual argument that is not set out in the defence but that could have been set out therein unless the court gives permission or the other parties agree (CPR 10.7).

A statement of case may be amended once, without the permission of the court at any time prior to the first case management conference (CMC) other than where the change pertains to the addition or substitution of a party or other changes after the end of a relevant limitation period. In these circumstances, a defendant would need to apply to the court for permission to amend the defence. CPR 20.2(2) provides that the court may allow an amendment that has the effect of adding or substituting a new claim, but only if the new claim arises out of the same or substantially the same facts as a claim in respect of which the party wishing to change the statement of case has already claimed a remedy in the proceedings. If the amendment pertains to the correction of a mistake as to the name of a party, the court may allow an amendment, but only where the mistake was genuine and where it is not one that would, in the circumstances, cast reasonable doubt as to the identity of the party in question.

Any further amendments prior to the first CMC would require the permission of the court. Similarly, following the first CMC, a defendant would need to seek the court’s permission by application to amend a defence. There are a number of factors that the court will consider when considering an application to amend a statement of case, such as:

  • how promptly the defendant applied to the court after becoming aware that the change was one that he or she wished to make;
  • the prejudice that the defendant would suffer if the change were refused;
  • the prejudice to the other parties if the change were permitted;
  • whether any prejudice could be compensated by the payment of costs or interest; and
  • the impact upon the case timetable, trial date and the administration of justice.
Sharing liability

How can a defendant establish the passing on or sharing of liability?

A defendant may rely on a defence of set-off or may counterclaim (ie, claim against the claimant) or bring a claim against an additional party. In the BVI, these claims are called ancillary claims and must be pleaded in the same way as a claim. A person upon whom an ancillary claim form is served becomes a party to the proceedings if that person is not already a party.

The procedure and timescales for making an ancillary claim are set out in Part 18 CPR. A defendant who has filed an acknowledgment of service or a defence may make an ancillary claim for contribution or indemnity against another defendant by filing a notice containing a statement on the nature and grounds of the claim and serving the notice on the other defendants.

A counterclaim may be made without the court’s permission if it is filed with the defence. In the instance of any other ancillary claim, this can be made without the court’s permission if the ancillary claim form is filed before the first CMC. In other circumstances, a defendant will need to seek the permission of the court to make an ancillary claim.

In considering whether the ancillary claim should be dealt with separately from the claim, the court will consider a number of factors. These factors will include the connection between the ancillary claim and the claim, whether the facts in both claims are the same or substantially connected, and whether the ancillary claimant is seeking substantially the same remedy that another party is claiming from the ancillary claimant.

Avoiding trial

How can a defendant avoid trial?

A defendant may apply to the court for summary judgment against a claimant. With the exception of certain types of proceedings (such as admiralty proceedings in rem, probate proceedings and defamation proceedings), the court may give summary judgment on a claim or a particular issue if it considers that the claimant has no real prospect of succeeding on the claim or the issue (CPR 15.2(a)).

A defendant may also apply for a statement of claim (or part thereof) to be struck out. The bases upon which this application may be brought are:

  • that there are no reasonable grounds for binging the claim;
  • that allowing the claim to proceed would constitute an abuse of process;
  • that not striking out the relevant pleading is likely to obstruct the just disposal of the proceedings; or
  • non-compliance with the CPR or an order or direction given in the proceedings (CPR 26.3).

In circumstances where the claimant has failed, unreasonably, to take steps to bring the case to trial, the defendant may also make an application to the court to have the matter disposed of without trial.

It is always open to a defendant to attempt to settle a dispute. An offer to settle may be made in accordance with the regime set out in Part 35 CPR or otherwise. ADR and mediation are encouraged by the court, although they remain relatively uncommon in the jurisdiction. CPR 27.7 contains provisions for the court to adjourn a CMC if satisfied that the parties are attending or have arranged to attend a form of ADR procedure, or are in the process of negotiating or are likely to negotiate a settlement.

Matters pertaining to jurisdictional challenges are discussed in question 23.

Case of no defence

What happens in the case of a no-show or if no defence is offered?

If a defendant fails to file an acknowledgement of service (in accordance with CPR Part 9) or a defence (in accordance with CPR Part 10), a claimant may obtain default judgment against the defendant. Once a default judgment has been entered, unless the defendant applies for and obtains an order for the judgment to be set aside, a defendant will only be heard in relation to the assessment of damage (provided that it has given appropriate notice in the prescribed form), the form of any other remedy, costs, the enforcement of the judgment and the time period for payment of the judgment (CPR 12.13).

In the case of a no-show at trial by all parties, the judge may strike out the claim. If one or more but not all parties appear at trial, the judge may proceed in the absence of the party or parties that do not appear, provided that the judge is satisfied that notice of the hearing has been served on the absent party or parties in accordance with the CPR (CPR 39.4). A party who was not present at a trial at which judgment was given, or an order made, may apply to set aside that judgment or order. This application must be made within 14 days of the date on which the judgment or order was served on the applicant, and must be supported by affidavit evidence showing that the applicant had a good reason for not attending the hearing and that it is likely that, had the applicant attended, some other judgment or order might have been given or made (CPR 39.5). Where a party’s conduct constitutes the breach of a court order, this may lead to proceedings for contempt of court.

Claiming security

Can a defendant claim security for costs? If so, what form of security can be provided?

Yes. The security for costs regime is set out in Part 24 CPR. A defendant or defendant to a counterclaim may apply for an order requiring the claimant to give security for the defendant’s costs in the proceedings. This application must be made, where practicable, at a CMC or pretrial review and must be supported by affidavit evidence. For the court to grant security for costs, it must be satisfied that it is just to make the order and that one of the conditions set out in CPR 24.3 has been satisfied. The court has a broad discretion as to the amount and nature of the security to be provided.

Once an order for security for costs is made, the court must stay the claim until such time as security for costs is provided in accordance with the terms of the order. If security is not provided by a specified date in accordance with the terms of the order, the court must order that the claim or counterclaim be struck out (CPR 24.5).