Prior Payments and the Company Claim Amount

Have you ever wondered what figure you should enter in the "Damage Amount" field if the adverse party has sent you a payment of a portion of your damages?

Screenshot of the Damage Entry

The simple answer is the total amount of the respective damage type.

Let's look at possible outcomes based on different entries. First, let's say your damages are $20,000. The adverse party has already sent you $14,000 and is disputing the remaining $6,000. You enter $20,000 as your Total Company Claim Amount. You do not acknowledge the $14,000 payment, but the adverse party proves that the payment was made and offers as evidence a screenshot showing that payment has also "Cleared," been "Deposited," or been "Honored." It doesn't make any difference what word is used; the point is that there is proof that you received and deposited the payment. The arbitrator decides that you proved liability at 100% and disagrees with the damages dispute. The award of $20,000 is entered, and the prior payment is proven, so the arbitrator gives the adverse party credit for $14,000, resulting in a net award of $6,000.

Screenshot of the Damages Summary

The next possibility is that you enter the balance of $6,000 as your Total Company Claim Amount, and again, do not acknowledge the $14,000 payment. The arbitrator again finds that you proved 100% liability and the adverse party proves that their payment of $14,000 was issued and deposited. The arbitrator recognizes the proof of the prior payment and again gives "Credit for Prior Payment" for the $14,000. This results in a net award of $00.00.

Screenshot of the Damages Summary

In the Reference Guide to Arbitration Forums' Agreements and Rules, Effective 1/1/2015, Page 50, it states, "The company claim amount... take(s) precedence over the damages amount if there is a conflict between the entries." Therefore, the arbitrator has the right to apply the full prior payment to the Company Claim Amount. Help ensure accurate awards by entering Total Company-Paid Damages as well as the amount of any prior Payments Accepted.


Article published in: September 2015 E-Bulletin