Interim payment applications in clinical negligence and other personal injury cases are a prolific area of contested litigation. It is surprising how often an interim payment cannot be agreed. It is probably partly because applications need to be made urgently to meet the claimant’s injured needs but the evidence in support is not available in a disclosable form (or at all) in a time scale that meets these needs. The defendant is often met with an application when it has very limited expert evidence, (if any at all) and very little detail of the claimant’s prognosis and needs. At the stage the application is made the defendant will want to test the evidence unless it is really clear cut and carefully prepared. The case of Duffy v Central Beheer Achmea is another example of this situation. Significant work is required on the part of the claimant to provide schedules and supporting evidence for the items that make up the calculations for the interim payment. The more detail and support that can be provided the more likely an interim payment can be agreed or will be ordered by the judge. However the urgency of applications to meet the claimant’s needs always has to be balanced against the delay and costs that obtaining detailed evidence and a fully detailed schedule will involve. Negotiation with the defendant as to what they require in order to be able to agree interim payments should always be the starting point and compromise is usually better for both parties than a contested application.
The decision of HHJ Coe QC sitting as a High Court Judge does not set out any new approach but is a good practical example of the detail that is required to be provided to the court when making such applications. Although the case was heard after the Court of Appeal decision in Swift v Carpenter it does not include a claim for future accommodation. Therefore unfortunately it does not assist with how a court will make a conservative assessment of future accommodation costs where the accommodation claim is calculated on the basis set out by the Court of Appeal in Swift v Carpenter.
Further, although in the Duffy case there was a jurisdiction issue, as the Defendant was a Dutch motor insurer , this was only of limited relevance to the application. The judge explained the position in :
“In terms of the applicable law there is little if any dispute between the parties and so I can take this shortly. The claim is brought in the English Court against a Dutch motor insurer and it is agreed that the law of the Netherlands applies to this claim in tort. The claimant, as a result of Dutch law has a direct right of action against the insurer and, following the decision in FBTO v Odenbreit  C 463-06 , the jurisdiction of the English Court is not an issue. The law of the Netherlands applies (pursuant to Article 41(1) of the Rome II Regulation on applicable law in tort (Regulation 864/2007 )). Dutch law will govern limitation, breach of duty and causation as well as the existence of, the nature of and the assessment of damages to which the claimant might be entitled. Matters of procedure and evidence are nonetheless reserved to the forum court (see Article 15(c) of the Rome II Regulation and Article 1(3)). This is an application for an interim payment which is a procedural application and thus governed by English law. However, when it comes to any assessment of the damages to which the claimant might be entitled on which to base the interim payment decision, Dutch law has to be applied.”
The starting point for calculating the appropriate amount to be awarded by way of interim payment remains the principles set out by the Court of Appeal in Cobham Hire Services Ltd v Eeles  EWCA Civ 204. The Court of Appeal described how there are two possible criteria for making an interim payment. However the ordering of any interim payment at all remains within the discretion of the court.
Eeles – Limb 1
The first basis – referred to in subsequent cases as Limb 1 of Eeles is:
That on a conservative estimate the likely award of a lump sum at trial for general damages, past losses with interest and accommodation (including running costs) will exceed the total sum sought by way of interim payments. That is, that at trial these items cumulatively will exceed any sums already obtained by way of interim payment and the further sum requested at the application after any deduction is made for contributory negligence or liability compromise.
The interim payment can be a high proportion of the likely award of the lump sum provided the estimate is made on a conservative basis. For the purposes of making an award on this basis the Court need not have regard to how the lump sum is to be spent, that is a matter for the claimant. In the case of TTT v Kingston Hospital NHS Trust (25/11/2011) Mr Justice Owen confirmed that a proportion calculated at 90% of the likely capital to be awarded at trial was a reasonable approach. Subsequently in the case of FP v Taunton and Somerset NHS Trust (16/12/2011), Mr Justice Higginbottom awarded a further interim payment of £500,000 to a Claimant making total interim payments of £2.2 million in a case where he assessed the lump sum likely to be awarded at trial would be £2.3 million. This represents over 95% of the assessed lump sum. In the case of Duffy, HHJ Coe QC calculated the interim award on the basis of 90% of a conservative calculation.
Eeles – Limb 2
The second basis – referred to in subsequent cases as Limb 2 of Eeles is:
If the claimant cannot satisfy the test in limb 1 of Eeles 1 that the lump sum is likely to exceed interim payment sought together with any interim payments already received when damages that might be made by periodical payments are excluded, then the claimant must show that the trial judge is likely to need to capitalise other heads of loss to provide a lump sum to meet the claimant’s needs. That is the claimant will need to satisfy the test set out in the case of Braithwaite v Homerton University Hospitals NHS Foundation Trust  EWHC 353 (QB) and endorsed by the Court of Appeal in the Eeles case.
In the Braithwaite case Stanley Burnton J (as he then was) summarised the position as follows:
“Indubitably on the basis of the interpretation I have arrived at on Part 25, there is a degree, perhaps a high degree, of prediction involved. I accept the submission that at this stage the court should not make a decision which is liable to close the door on decisions which may be made by the trial judge. However, the crucial words in 25.7(4) are ‘’the likely amount of the final judgment’’ and it seems to me that if the court now is able to say that it is likely or indeed more than likely that a capital award will be made at trial significantly in excess of £850,000 there is jurisdiction to make an interim payment.
Should or can the court so predict? Were the discretion available to me it is one I should unhesitatingly exercise. The need of the claimant for professional care and for suitable accommodation is evident on the evidence before me. It is not suggested, as I understand it, that the accommodation that is presently occupied by the claimant, her mother and her sister, is in any way suitable. The object of the jurisdiction to award an interim payment is in part so that a claimant who is in such need may have those needs satisfied out of monies she is likely to receive in due course. The need is enhanced in the present case because the ability of the claimant to access professional care is itself limited by her present accommodation. It is only if she can obtain suitable accommodation that there will be any possibility of her accessing professional care.
Is the court at this stage, therefore, able to say that it is likely that there will be at trial an award of a capital sum of the kind of figure which is necessary for this interim payment to be made? If the court cannot say what is likely to occur then there is no jurisdiction under Part 25.7(4). If, on the other hand, the court is in a position to make a reliable prediction as to what the judge at trial will do then the position is different.
Again, in my judgment, even on the evidence presently available I can confidently predict that at trial the judge will make an order for a capital payment significantly in excess of £850,000. I say that because unless such an award is made the claimant’s needs simply cannot adequately be satisfied, as I have already indicated the accommodation is unsuitable and she cannot access professional care. If that means there will have to be some discount to or postponement of periodical payments, in my judgment, the judge is bound so to order.”
In the case of Duffy, HHJ Coe QCset out the principles to be applied with reference to the summary by Popplewell J in Smith v Bailey  EWHC 2569:
“19. It is convenient to set out the principles which I take to be established by Eeles and the previous authorities which it sought to summarise:
(1) CPR r. 25.7(4) places a cap on the maximum amount which it is open to the Court to order by way of interim payment, being no more than a reasonable proportion of the likely amount of the final judgment (para 30).
(2) In determining the likely amount of the final judgment, the Court should make its assessment on a conservative basis; having done so, the reasonable proportion awarded may be a high proportion of that figure (paras 37, 43).
(3) This reflects the objective of an award of an interim payment, which is to ensure that the claimant is not kept out of money to which he is entitled, whilst avoiding any risk of an overpayment (para 43).
(4) The likely amount of a final judgment is that which will be awarded as a capital sum, not the capitalised value of a periodical payment order (”PPO”) (para 31).
(5) The Court must be careful not to fetter the discretion of the trial judge to deal with future losses by way of periodical payments rather than a capital award (para 32).
(6) The Court must also be careful not to establish a status quo in the claimant’s way of life which might have the effect of inhibiting the trial judge’s freedom of decision, a danger described in Campbell v Mylchreest as creating “an unlevel playing field” (paras 4, 39).
(7) Accordingly the first stage is to make the assessment in relation to heads of loss which the trial judge is bound to award as a capital sum (para 36, 43), leaving out of account heads of future loss which the trial judge might wish to deal with by a PPO. These are, strictly speaking (para 43):
general damages for pain, suffering and loss of amenity;
past losses (taken at the predicted date of the trial rather than the interim payment hearing);
interest on these sums.
(8) For this part of the process the Court need not normally have regard to what the claimant intends to do with the money. If he is of full age and capacity, he may spend it as he will; if not, expenditure will be controlled by the Court of Protection (para 44). Nevertheless, if the use to which the interim payment is to be put would or might have the effect of inhibiting the trial judge’s freedom of decision by creating an unlevel playing field, that remains a relevant consideration (para 4). It is not, however, a conclusive consideration: it is a factor in the discretion, and may be outweighed by the consideration that the Claimant is free to spend his damages awarded at trial as he wishes, and the amount here being considered is simply payment at the earliest reasonable opportunity of damages to which the Claimant is entitled: Campbell v Mylchreest  PIQR Q17.
(9) The Court may in addition include elements of future loss in its assessment of the likely amount of the final judgment if but only if it has a high degree of confidence that the trial judge will award them by way of a capital sum, and (b) there is a real need for the interim payment requested in advance of trial (para 38, 45).
(10) Accommodation costs are “usually” to be included within the assessment at stage one because it is “very common indeed” for accommodation costs to be awarded as a lump sum, even including those elements which relate to future running costs (paras 36, 43).”
In looking at reasonable proportion the cases now consistently allow a high proportion and between 90 and 95% is not unusual. HHJ Coe QC allowed 90% on the Eeles 1 calculation.
The case of Duffy emphasises how important it is to provide detailed and up to date figures to the judge when making an interim payment application. If the trial is still some years ahead then details of all the likely expenditure to trial need to be provided with expert support where possible. In respect of the position as to the losses to trial in the case of CR v West Hertfordshire NHS Trust  EWHC 1123 Spencer J explained how the anticipated losses in the 18 months between the application in that case and the trial should be added to the past losses when making the Eeles calculation. He set out in  how:
“It is important to emphasise as Popplewell J made clear in Smith v Bailey that “past losses” means losses taken at the predicted date of trial, rather than the interim payment hearing.”
HHJ Coe QC pointed out in the Duffy case that:
“A particular difficulty in this case is that the defendants’ figures set out in the written submissions are formulated in the context of the 2019 schedule to which I have already referred. The claimant’s submissions are based on the Immediate Needs Assessment of Elizabeth Edwards which is not currently incorporated into an updated schedule. The figures and the methods of calculation are by no means the same. Therefore, any meaningful valuation table in accordance with the practice recommended in Grainger v Cooper  EWHC 1132 is not properly achievable given that one would not be comparing like with like.”
A detailed up to date schedule setting out all the costs to date and projected costs to trial is ideally needed to support such applications. However this is not always feasible at this stage in the litigation and there is a balance to be struck as to what can be achieved by way of detail and the urgency of the application. In the event the judge went through each figure suggested by the Claimant and each figure offered by the Defendant and arrived at her own conservative valuation. The Claimant obtained significantly less than requested, a sum of £400,000 was sought and £116,000 awarded.
These applications when contested are never straightforward. As suggested above, negotiation with the defendant and even a round table meeting to discuss an application for an interim payment should always be the starting point. If the defendant requires expert evidence before being prepared to make such payments then the costs need to be taken into consideration. Striking a balance between what is reasonably required and what is reasonably necessary and proportionate should be a matter of negotiation rather than driving the parties to contested litigation. It is almost inconceivable that the defendant will pay more than the final capitalised award by way of interim payments but the need for the defendant to understand the basis of the application is also understandable. As with most aspects of litigation the interests of both parties are usually best met by sensible negotiation and compromise. Too often the result of such contested litigation is that the claimant obtains less then they hope from the application and the defendant pays more than they hope and pays the costs of the application.