The Future For Interim Payments In Catastrophic Injury Cases

Part 25 of the Civil Procedure Rules (CPR) allows a court to make an order for an interim payment when the defendant is insured or is a public body and where the claimant has obtained judgment or can show that it is likely that if the case went to trial, he would secure judgment for a substantial figure.

CPR 25.7 provides that the interim payment should be for a sum no more than "a reasonable proportion of the likely amount of the final judgment".

Prior to the amendment of the Damages Act 1996 by the Courts Act 2003, the usual practice of judges hearing applications for interim payments was to consider both parties schedules of loss and then make a conservative preliminary estimate of the likely total final award. The judge would then order an interim payment which allowed a comfortable margin in case his estimate turned out to be too generous.

Since 2003, a trial judge has had the power to make an order for periodical payments, regardless of the wishes of the parties to an action. Consequently, awarding large interim payments can affect the trial judge's freedom to order periodical payments.

In Cobham Hire Services Limited v Benjamin Eeles [2009] EWCA Civ 204, the Court of Appeal gave guidance on the approach which a judge should take when considering an application for an interim payment in a high value personal injury case where the trial judge may wish to make a periodical payments order (PPO).

Benjamin Eeles suffered a serious head injury in a car accident when he was nine months old. Liability was not disputed and judgment was entered with damages to be assessed at a later date when it was possible to properly quantify the claim as Benjamin was still developing.

Interim payments amounting to £450,000 were made and used, in part, to extend the five bedroom family home and provide a therapy room.

When Benjamin was 11, his parents, with the agreement of some of their medical advisers, concluded that the current family home would not meet his increasing needs. Brightlingsea Hall, a house with 9 bedrooms and a bungalow in the grounds, came on to the market in 2008 and an application was made for a further interim payment of £1.2 million to allow the purchase and refurbishment of this property.

Foskett J approached the application by making a conservative valuation of the overall capital value of the claim at £3.5million. He observed that an interim payment of £1.2million would, if granted, bring the total sum of interim payments to just...