Interim Payments and Accommodation
Claims
1. In cases
of very serious personal injury a claim for the costs of suitable accommodation
is likely to form a prominent component of the Claimant's Schedule of Loss. Although
the Claimant will not be entitled to recover the full capital cost of such
accommodation (Roberts -v- Johnstone [1989] QB 878), he or his family
may wish to use a payment on account of his damages to buy what they consider
an appropriate property, to make adaptations to it and to establish there a
care regime. It may well be 2 years or more before the case is ready to come
to trial. Yet the purchase of particular accommodation at an early stage may
have a significant effect on the way the Court approaches what may be a
contested issue at trial. Put bluntly, it is likely to be a much more
difficult task to persuade the Court to dismantle an existing regime than to
opt for one of two putative options.
2. As is well
known, CPR Part 25.7 does not contain any provision which requires the Court to
consider the purpose for which an interim payment is to be used. The threshold
conditions are, in effect, designed to sift out those cases where liability is
a serious live issue(See CPR 25.7 (1)).
Once these criteria are satisfied
the only express restraints upon the Court's discretion are provided by CPR
25.7(4)
"The
Court must not order an interim payment of more than a reasonable proportion of
the likely amount of the final judgment."
and CPR 25.7.(5)
which requires the Court to take into account contributory negligence and any
relevant set-off or counterclaim.
But the restraining factor provided
by CPR 25.7.(4) is unlikely to be of much assistance to a Defendant facing a
claim for damages which runs into millions. Even in today's property market,
the cost of purchase is unlikely to exceed a reasonable proportion of the
claim's likely value. A Claimant can therefore assert that he should be paid
an advance payment on account of damages that he is bound to receive in due
course, to be used for whatever purpose he, or the Court of Protection, deems
appropriate.
3. Against
this, the Defendant's only recourse in most cases(i.e.leaving aside the
minority of cases in which there may be a realistic Sowden argument) is
to argue that an interim payment of the kind sought would not be just because
it would effectively pre-judge what might be an important disputed issue at
trial. This is a relevant consideration. In Campbell -v- Mylchreest [1999] PIQR Q17, Auld LJ, agreeing with Sir John Balcombe, said:
"A judge,
when considering an application for an interim payment, has a discretion in the
matter. The Court's decision in Stringman -v- McArdle [1994] 1 WLR 1653
has not changed that, as Butler-Sloss LJ emphasised at p. 16560. It is true
that, as a guide to the exercise of that discretion, it indicates that the
Court should normally order sought interim payments within the amount of the
likely recoverable damages without investigation or consideration of the
plaintiff's intended use of the money.
However,
there may be instances where there may be another matter or other matters
relevant to the exercise of the discretion ….
… where
the use to which the plaintiff intends to put money received by way of interim
payment might prejudice the fair conduct of the trial in some way, it is, in my
view a relevant factor for consideration by the judge, along with the Stringman
-v- McArdle starting point, when exercising his discretion whether to order
a payment. More particularly, where the use to which the plaintiff intends to
put the money might pre-empt in some way the outcome of an important issue in
the trial, that is a matter relevant to the exercise of the discretion."(@Q
24)
Sir John Balcombe himself had said of the
argument:
"It
can at best be a factor which the judge exercising his discretion should take
into account. The weight he gives to that factor is for him … But equally it
must be true … that, when the threshold conditions have been satisfied, prima
facie it is the plaintiff's money one is talking about … is also a factor which
the judge must take into account."(@Q 22)
4. In Campbell itself the Defendant's opposition to a substantial interim payment did
not succeed, largely because no great prejudice on the issue of accommodation
was shown.
5. Two recent
decisions in the High Court show the respective judges being much influenced by
the proportion of the likely final award which the claimed interim payment
represented. In Spillman (a person under disability) -v- Bradfield Riding
Centre [2007] EWHC 89 (QB) LTL 13.02.07, the Master had refused an
application for a substantial interim payment, to be applied, it was said, to
the purchase of new accommodation. He had done so on the basis that he could
not be satisfied, in view of the stark evidential dispute, that the
accommodation claim as formulated would succeed at trial. On appeal, Langley
J. agreed with the Master's view on this point. Nonetheless, he greatly
increased the modest interim payment which the Master had ordered so that the sum
payable was 75% of the figure which the Court could safely conclude was likely
to be received at trial. On the particular facts of this case, after allowing
for an agreed 30% deduction in respect of contributory negligence, the resulting
sum amounted to £136,500.00. Langley J. observed that CPR 25 "requires
the Court (granted the other [threshold] conditions are satisfied) to determine
first "the likely amount of the final judgment; second, what is a
reasonable proportion of that amount; and, third, to address any other matters
it considers material to the exercise of the overall discretion …"
In the
event, as the judge observed, the Claimant's family did not receive an order
"for the payment of funds sufficient to buy a new house", so that
other matters material to the discretion did not need to be addressed.
6. Wade (a
person under a disability) -v- Turfrey (LTL 22.03.07), a case decided in
the Leeds District Registry on 09.03.07 by John Behrens QC, sitting as a Deputy
High Court Judge, contains a detailed recital of the principles to be applied,
in the context of a claim for a very large interim payment (£850,000.00), to
which the Defendant objected on the grounds that the application was premature
and that the Defendant had had no proper opportunity to marshal its own expert
evidence. Neither of these objections succeeded. The Deputy Judge found that
a substantial accommodation claim was inevitable and that, on a very
conservative valuation, the claim in total was worth almost £1.25 million. He
ordered an interim payment of £850,000.00 which "should be sufficient to
purchase the house, adapt it, to purchase aids and to set up a care regime for
at least 2 years by which time the trial may well be imminent."
7. This
uncomplicated approach is likely to be very unwelcome to Defendants' insurers,
who may find themselves having to pay very substantial sums much earlier than
was hitherto the practice and without the benefit of their own expert evidence.
13 April
2007
WILLIAM
HOSKINS
1 TEMPLE GARDENS
