Amount of a Part 36 offer can be reduced by a subsequent payment on account



The case of Gamal v Synergy Lifestyle Ltd [2018] EWCA Civ 210 relates to a claim against an invoice for unpaid building work. It turned out the invoice was in fact fraudulent, and resulted in the judge having to assess the value of the works actually carried out. The balance due (accounting for payments already made, and a later adjustment to deal with some erroneously added VAT) was ultimately calculated to be £14,275.59.

In August 2015 the Defendant had made a Part 36 offer to pay the Claimant £15,000 in full and final settlement of the claim.

Before the trial took place, in February 2016, the Defendant made a further payment of £10,000 to the Claimant.

The issue for the Court of Appeal was whether the later payment had any effect on the Part 36. If it did not, the offer was still £15,000 and the Claimant had failed to beat it. If it reduced it by the amount paid, the offer was effectively only £5,000 and the Claimant had beaten it.

The conclusion by the court was that a payment on account of liability would reduce a corresponding Part 36 offer. That would be the presumption unless the paying party expressly stated otherwise:

“…an unconditional payment on account of the sums claimed in the proceedings, made after the date of a Part 36 offer, results in the amount of the Part 36 offer being correspondingly reduced unless the payer makes it clear to the other party, at any time prior to judgment or acceptance of the Part 36 offer, that it is not to be so treated.” (Flaux LJ at para 30)

As such, it was held that the Claimant had obtained a judgment more advantageous than the Defendant’s Part 36 offer and had beaten it.

The lesson? Make sure you are clear about the basis on which payments have been made to you or by you; it could have a major impact on offers and subsequent costs orders.

Featured Counsel

Hugh Rimmer

Call 2003

Latest News & Events

The Dekagram: 20th May 2024

We trust that our readers have been enjoying the Spring sunshine; the team have spent their time in the sun wisely, reading cases so you don’t have to. First we noted a decision which considers the interplay between English and Scottish guardianship; secondly we read…

The Dekagram: 13th May 2024

Last week brought the news that the Australian airline Qantas and the Australian Competition and Consumer Commission have agreed to resolve their dispute over cancelled flights by asking the court to impose a $100 million fine, together with an undertaking by the airline to pay…

Max Melsa appears in Court of Appeal in Re D (Children: Interim Care Order: Hair Strand Testing) [2024] EWCA Civ 498

Max Melsa represented the children, through their Children’s Guardian, in the first case to reach the Court of Appeal specifically dealing with the interpretation of Hair-Strand Tests in care proceedings. The appeal was made by the mother against the interim separation of three children from…

Subscribe to our mailing list

Deka Chambers: 5 Norwich Street, London EC4A 1DR

© Deka Chambers 2024


Portfolio Builder

Select the expertise that you would like to download or add to the portfolio

Download    Add to portfolio   
Title Type CV Email

Remove All


Click here to share this shortlist.
(It will expire after 30 days.)