Interim payments of damages in pending cases – the latest developments

The issue of interim payments arises in many clinical negligence and bodily injury claims involving serious injury. This is usually a situation where the claim will not be settled for some time – either because quantification and settlement is not possible and / or because the parties cannot reach an agreement, leaving the claimant short of funds due to injury and / or the need for funds for specific expenses.

In cases where liability is admitted or likely to be admitted and where moderate down payments are intended to reimburse reasonable losses or for rehabilitation purposes, the parties generally agree on an amount to be paid by the defendant (s). (s) to the claimant because of their damage. These interim payments could be deducted from the final amount of damages to be obtained or from specific expenses such as treatment for the claimant.

However, larger interim payments can be more contentious. An applicant often seeks a large sum to finance needs such as the purchase of a house or a care package and cannot move them forward without a substantial interim payment. Defendants will fear that by providing such large funds, they will end up committing to indemnifying the plaintiff for whatever it is used for and losing arguments over what should be recovered. They will also fear that the interim damages awarded will be so high that they could affect the final price awarded by a court.

As a result, larger interim payments often cannot be agreed between the parties and force the court to hear the respective arguments and make an appropriate order.

Recent case

The most recent case in this regard has been PAL (One Child) vs. Davison & Ors [2021] EWHC 1108 (QB) in which Judge Yip considered an interim payment in the case of a seriously injured 13 year old child for whom responsibility for her injuries had been recognized and she was awarded another interim payment of £ 2million so that the housing could be purchased and adapted. This was in addition to interim payments of £ 1,025,000 which had already been made.

The defendant agreed to make another interim payment but only offered an additional £ 1,250,000 which was sufficient to purchase the property the plaintiff wished to buy, but not to cover any other costs that would be incurred to tailor the property to their needs. The hearing therefore had to determine the level of an appropriate compensation rather than focusing on whether another interim payment should be ordered.

The Claimant’s injuries meant that she had not been able to return to her family home as she did not meet her needs and, at the time of the hearing, was living in rented accommodation which was not considered an option. appropriate in the long term.

Judgment of Judge Yip

In considering her judgment, Judge Yip reviewed the previous important case on this issue, Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204, where the Court of Appeal provided guidance on the principles to be considered in an interim payment request, particularly where the final settlement could include a periodic payment order and effectively establish a two-step test.

Eeles had defined the following orientations:

“The judge’s first task is to assess the probable amount of the final judgment, without considering any counts of future losses that the trial judge might wish to deal with through the OPP. Strictly speaking, the assessment should only include special damages to date and damages for pain, suffering and loss of pleasure, with interest on both. However, we consider that the practice of allocating accommodation costs (including future running costs) as a lump sum is sufficiently well established that it is generally appropriate to include costs of accommodation. accommodation in the expected capital allocation. The assessment should be carried out on a prudent basis. Except in the circumstances described below, the interim payment will represent a reasonable proportion of such valuation. A reasonable proportion may well be a high proportion, provided the assessment has been careful. The objective is not to deprive the applicant of his money but to avoid any risk of overpayment.

“For this part of the process, the judge doesn’t need to worry about what the plaintiff intends to do with the money. If he is of age and capable, he can spend it as he wishes; otherwise, the expenditure will be controlled by the Court of Protection.

Madam Justice Yip underscored the need to balance the fact that a judge hearing a request for interim payment should not determine the issues that fall to the trial judge in deciding what to grant. However, a judge must also take into account the implications of compensation which could be greater than the final lump sum that a trial judge might have deemed appropriate, thereby affecting the nature of the compensation to be paid.

She clarified that interim payments reflecting losses already suffered and proven are less likely to be contentious, but that: “when considering a request for interim payment to cover the plaintiff’s needs before trial, it is It may be reasonable to include costs that have yet to be incurred but that will accumulate prior to trial in the Step 1 assessment.

Madam Justice Yip held here that an indemnity which only covered past general damages and the capitalized accommodation claim was the best way forward, as no other loss counts were affected by the decision. However, she admitted that, according to the defendant’s figures, a sum of £ 2million was more than a reasonable proportion of the sum which could be awarded.

She then turned to the second part of the “test” set out in the Eeles the case and his view that it was for the court to be satisfied that there was a real need for the requested interim payment and that the requested amount was reasonable and reasonably necessary. Although this strayed into the territory of the trial judge, the court of Eeles considered that, if this test were applied, it would be a reasonable measure of what a trial judge would be likely to grant and therefore a reasonable basis for allowing an interim payment at that level.

Regarding the rationale for an interim payment for accommodation, Madam Justice Yip said: “I am satisfied from the evidence available to me that there is a real need for accommodation now rather than ‘after the trial. Indeed, I am convinced that there is an urgent need to find suitable accommodation.

This case may have been simplified to the extent that the defendants agreed that there was an urgent need and that buying a property was the way to go. The issue then was not whether the particular property proposed was appropriate, but whether the expenses proposed to be covered by the provisional allocation were “reasonably necessary”.

The evidence presented to the court was that the property proposed to be purchased was, at that time, the only reasonable option. Reiterating that it was not for her to determine whether the property itself was appropriate, but only the proposed expenses, Madam Justice Yip said: “This price is within the range initially identified as appropriate by Mr. Wethers, well than the upper end of the range. I do not decide that the plaintiff should buy this property, nor do I decide that the plaintiff will ultimately be entitled to damages assessed on the basis of this property. I consider, however, that in looking at the viable options today, it is reasonably necessary to incur the proposed expenses in order to secure what appears to be the only property available to meet the needs of the applicant.

This decision then represented an award of £ 1,190,000. The plaintiff had requested a sum of £ 2,000,000. In this regard, Judge Yip said: “It makes sense that the interim payment that I give for housing is sufficient to cover the full cost of buying, adapting and moving into the property. . There is no benefit in leaving work half-done so that the claimant cannot take a job …

“There can be no question for the plaintiff to anticipate the full recovery of the costs from the defendants without having taken care to ensure that the expenses do not exceed what is reasonable … I do not decide precisely how much should be spent in total for housing, but only expenses of approximately the amount I intend to grant are reasonably required. Proceeding on this basis, I have a high degree of confidence that the sum of £ 2 million is reasonably required. This will cover the purchase and ancillary costs, adaptations and moving costs. There should be a surplus that can be applied to the equipment and assistive technology that will be needed once the new home is available. A careful report will undoubtedly be kept by the Professional Deputy. I anticipate that further interim payments will be required in due course. Any excess after accommodation costs are covered can be charged to other immediate needs that will become special damages before trial. I am satisfied that making an interim payment at this level will not interfere with the freedom of the trial judge to award future loss as he or she sees fit.

Judge Yip declined the plaintiff’s suggestion to exercise the jurisdiction of the Protection Court and authorize the purchase of the property and made it clear that this decision should remain under the auspices of the Protection Court.

Case summary points

  • The importance for a claimant to have clear evidence to support why they are proposing to use these interim funds and why assist the court in concluding that the expense is reasonably necessary.
  • The ability to request an interim payment to cover all costs associated with the purchase of the property and work rather than having to request multiple payments.
  • That it is not for the court to determine the suitability of a particular good that a plaintiff wishes to purchase, but to consider the necessity of the purchase and the reasonableness of the proposed expenditure.
  • That despite the lingering uncertainties about certain aspects of accommodation requests, where there is an urgent need for suitable accommodation, the court is likely to order a substantial interim payment to facilitate a purchase during the life of the request if necessary .

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John McTaggart

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