In car crash claims, what is required for a counterclaim to be compulsory?

A counterclaim is considered compulsory when it arises out of the same transaction or occurrence that is the subject matter of the opposing party's claim. This requirement ensures that all related claims are resolved in a single lawsuit, thus promoting judicial efficiency and preventing inconsistent verdicts. In the context of car crash claims, if the defendant has a claim against the plaintiff that stems from the same incident—the collision—then that claim must be filed as a counterclaim in the same action rather than being brought in a separate lawsuit.

The rationale behind this rule is to avoid piecemeal litigation where issues stemming from a single event are separated, potentially leading to different outcomes or an incomplete resolution of the dispute. In this way, the legal system aims to streamline the process for both the courts and the involved parties.

The other options do not accurately capture the requirement for a counterclaim to be classified as compulsory. While involving the same defendants, being financially significant, and being related to damages are relevant considerations for various aspects of claims, they do not trigger the compulsory nature of a counterclaim. The pivotal point remains that the direct connection to the same transaction or occurrence defines the necessity of the counterclaim being brought forward in the ongoing litigation.