I have the same issue, which is a shame because its the biggest flaw I'm finding with the game so far. Sometimes it works and I don't know why. Other times it just parries the attack and that's only when I stand still and repeatedly tap the Circle button, but more often than not it just doesn't do anything and I find myself taking the brunt of most attacks. It's a problem that Ubisoft need's to fix and I wish they would have just stuck with ACII's combat for this game because it was a system they learned to perfect and would have been easier to duplicate onto Vita instead of a new unreliable system we won't see fixed till the next game in the ACIII series