Sorry, I only had time to answer quickly yesterday. It's a bit difficult to know what forms you have (the forms differ slightly depending on what type of claim it is and which court you are in).
I assume the firm form you have is the Acknowledgement of Service which is probably form N9. First fill that in and tick the bit that says you are going to defend it all. Send that back. You have to do that within 14 days. You can, at the same time (or if not at the same time, within 14 days) also file your Defence (and Counterclaim). You can either do your defence on the defence form which will be N9C or D or you can just type it. If you decide to type it it should be headed properly and MUST contain a statement of truth (so in that respect it may just be easier to fill in the form). Once you have sent that back, at least your case is properly defended. The case will not have hit a Judge's desk at that point it is only once you have filed the defence (and counterclaim, if any) that it will be seen by the judiciary.
At that stage the claim will then be allocated to its track. (Small claim, Fast track or multi track).
It is at this point that you can decide whether to apply for SJ (as Defendant, you can apply earlier if you like but because I am not sure of the grounds for SJ its probably safer to do it this way) and/or strike out. (The Court can strike out of own volition, but i wouldnt rely on that).
To apply for SJ you will need to fill in an Application Notice on form N244. It's difficult to say when the best time for this is, because I do not know the grounds on which you are claiming it is a hopeless case. If there is no legal basis for the claim I would do it sooner rather than later. If evidentially the Claimant is going to have a problem, i might wait until the evidence has been filed (if it is an evidential SJ, the Court is going to look at the evidence likely to be available at trial).
If you do get SJ or strike out (strike out is found in CPR 3), she cannot bring another claim based on the same facts. Although beware that if she has cocked up the claim, she might get permission to amend her claim form (albeit at her cost).
Let us know how you get on.