36.—(1) When judgment is given for the plaintiff on a claim and for the defendant on a counterclaim under subsection (1) of section 34, the one judgment shall be set off against the other and only the balance found owing shall be recoverable.

(2) This section shall apply notwithstanding that one party is a bankrupt or (where a personal representative is party to an action) that the estate administered by him is insolvent.

(3) This section, and also section 251 of the Irish Bankrupt and Insolvent Act, 1857, in so far as it applies to a set-off of judgment debts owing by and to a bankrupt, shall operate only in relation to the satisfaction of debts, and, for all purposes (including the construction of policies of insurance) other than that aforesaid, a judgment shall be treated as creating a debt, duty, obligation and liability for the full amount of the judgment as if there were no set-off, and for such other purposes a debt (whether by judgment or otherwise) shall be deemed to be paid by the judgment debtor to the extent of a debt set off against it.

(4) Notwithstanding anything in section 62, where a claim is made against a person who is insured in respect of a liability alleged in that claim and the claim is paid by the insurer with a deduction in respect of a sum owed to the insured by the person making such claim, the insured or any person representing or deriving title under him shall be entitled to recover from the insurers the amount of the said deduction.

F10[(5) Notwithstanding anything in section 62, where a claim is made against a person who is insured in respect of a liability alleged in that claim and the claim is not paid by the insurer by reason of its being set off in full against a sum owed to the insured by the person making such claim, the insured or any person representing or deriving title under him shall be entitled to recover from the insurers the amount of such claim.]