Interim Payments - Life After Eeles

CPR Part 25 provides that interim payments may be awarded where the claimant can show that he has obtained judgment or would, at trial, obtain judgment for a substantial amount of money against an insured defendant or public body. The rules provide that the court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment.

In Eeles v Cobham Hire Services Ltd CA 13/3/09, the question arose whether an interim payment should be a reasonable proportion of the overall lump sum value of the claim or, alternatively, of only the capital sum that the claimant is likely to be awarded by the trial judge. The court determined that, "In a case in which a periodical payments order is made, the amount of the final judgment is the actual capital sum awarded. It does not include the notional capitalised value of the periodical payments order, which sum is irrelevant for the purposes of determining an interim payment in a case of this kind." The court then gave guidance as to the approach that should be adopted when interim payment applications are made in cases where a PPO may be awarded at trial, which can be summarised as follows:

Assess, on a conservative basis, what is likely to be awarded for the heads of damage which are bound to be ordered as lump sums The court may award a reasonable proportion of that lump sum figure, and the court may allow a high proportion, provided that the estimate has been a conservative one Where the judge is able to predict with a high level of confidence that the trial judge will capitalise additional elements of the future loss to produce a greater lump sum award, he may then make a larger interim payment. These will be cases where the claimant can clearly demonstrate the need for an immediate capital payment, probably to fund the purchase of accommodation The judge need have no regard as to what the claimant will actually do with the interim payment Where the interim payment is requested to purchase a house, the judge must be satisfied that there is a real need for accommodation now (as opposed to after the trial) and that the amount of money requested is reasonable. He does not need to decide whether the particular house proposed is suitable but he must not make an interim payment order without first deciding whether expenditure of approximately the amount he proposes to award is reasonably necessary. That approach has since been argued before, and adopted by, the...