High Court Provides Further Guidance in Relation to Interim Payments

In AL (by her Mother and Litigation Friend, S) v Collingwood Insurance Company Ltd [2021] EWHC 1761 (QB), a catastrophic brain injury case, Robin Knowles J provided further guidance to practitioners as to the application of the established principles previously laid down in Eeles v Cobham Hire Services Ltd [2010] 1 WLR 409.

In a seemingly bad-tempered piece of litigation relating to a very severe brain injury suffered by a young girl, the High Court was asked to determine the Claimant’s application for a further £½M interim payment, sought to fund an accommodation purchase, and made against the background of previous interim payments totaling some £400,000. This was being opposed by the Defendant on the basis that the court had no jurisdiction to make the interim payment and alternatively that the evidence didn’t support it.

A link to the full judgment can be found here.

The court was referred by both parties to CPR 25 and to the Court of Appeal’s guidance in Eeles. This sets out the now well established two stage approach to such applications.

The Defendant’s jurisdictional argument was based on the fact that the Claimant was seeking to rely on aspects of her future loss claim, that she said were likely to be capitalized by the trial judge as opposed to being awarded as part of a PPO. This argument was rejected by the court. Robin Knowles J stated that “the jurisdictional limit is that set by CPR 25.7(4)” namely a reasonable proportion (which may sometimes be a high proportion) of the likely amount of final damages. He said that neither the CPR nor the guidance in Eeles precluded consideration at an interim payment application of likely capitalized future losses in appropriate circumstances. On the evidence presented he was satisfied that the Claimant’s need for the interim payment sought was “real” and “to a high degree of confidence, that expenditure of approximately the amount proposed to be awarded was reasonably necessary”. He therefore included some future losses to the extent that he was satisfied they would be awarded as a lump sum at trial.

In dismissing the Defendant’s arguments that the evidence didn’t support the additional amount claimed, and having considered all available evidence put before him, Robin Knowles J found that general damages for PSLA, past losses and the likely capitalized element of accommodation and future running costs were conservatively to be assessed at £850,000. He was also prepared to consider, in accordance with Eeles, other likely future loss items such as loss of future earnings and future care. In the end he was satisfied that the further interim payment sought, resulting in interim payment totaling £900,000 was “modest” and that future losses may run into “many millions of pounds”.

It appears the Defendant significantly misjudged their response to the Claimant’s application, their litigation lens perhaps obscured by the confrontational stance adopted by the parties.  In addition to encouraging the parties to “work to a sensible conclusion”, Robin Knowles J emphasized that the Court of Appeal’s guidance requires a principled exercise of discretion, such as will meet the needs of the particular case.

Whilst it is clear that considerations that apply in any particular case will be fact sensitive, he rightly made clear that the interim payment process needs to be flexible enough to support even a young and catastrophically injured Claimant’s reasonable rehabilitation requirements from early in the litigation process and at a time when final prognoses are still awaited.

This confirmation of the correct approach to such applications and how to interpret the Eeles guidance must be correct and is to be welcomed.