Court orders emergency interim payment

Posted by Malcolm Johnson on

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In the case of Hayes v Kingston Hospital NHS Trust [2014] EWHC 2321 (QB) the Claimant made an application under CPR rule 25.7 for an interim payment of £1.6 million.

She was an eight-year-old girl with profound disabilities, caused by the Defendants' admitted negligence in the management of her mother's labour and in her delivery.

Judgment on liability was entered on 3 August 2012. The proceedings were at an advanced stage, with service of a detailed schedule and counter schedule and the exchange of expert evidence from a variety of medical and non-medical experts. A settlement meeting took place on 13 May 2014 at which the issues were narrowed. The claims for general damages, past losses, and interest had since been agreed. Trial of the remaining issues was fixed for 20 October 2014.

The Defendant had already made substantial interim payments in the total sum of £700,000. These had been used to meet the Claimant's ongoing needs, including the appointment of a case manager, recruitment of professional carers, and provision of temporary accommodation and specialist equipment.

The interim payment now sought arose out of the Claimant's requirement for suitable accommodation. It was common ground between the parties, that there was an urgent need for the Claimant's family to move from their present address. Furthermore the family had to live within the London Borough of Kingston upon Thames.

That was because the Claimant had a specialist school since September 2012 and she was likely to stay there until the end of her education. Were she to reside outside the borough, there would be funding difficulties. The Claimant's family had identified what they regarded as a suitable house to purchase, and their offer of £1.6 million had been accepted but the house might go to someone else.

His Honour Judge Richard Parkes allowed the application. He referred to the case of Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204.

The first task of the judge (Eeles stage 1) was to assess the likely amount of the final judgment, leaving out of account the heads of future loss which the trial judge might wish to deal with by periodical payment order. Strictly speaking, the assessment should comprise only special damages to date and damages for pain, suffering and loss of amenity, with interest on both.

However it would usually be appropriate to include accommodation costs in the expected capital award. That assessment should be carried out on a conservative basis, and the interim payment should be a reasonable proportion of that assessment. A reasonable proportion might be a high proportion, as long as the assessment was conservative. The judge need have no regard to what the Claimant intended to do with the money, which in this case would be determined by the Court of Protection. The objective was not to keep the claimant out of his money but to avoid any risk of over-payment.

The second stage of the test (Eeles stage 2) concerned the circumstances in which the judge was entitled to include in his assessment of the likely amount of the final judgment additional elements of future loss. That could be done when the judge could confidently predict that the trial judge would wish to award a larger capital sum than that covered by general and special damages, interest and accommodation costs alone. Before taking such a course, the judge had to be satisfied by evidence that there was a real need for the interim payment requested.

Judge Parkes weighed up the risks of losing the Claimant’s present accommodation and the new accommodation. It seemed to him that it was not desirable to take risks in a situation like this. The claimant's housing position was currently very insecure and that there was a real need to secure new accommodation for her and her family now, rather than in October or November of this year.

He would therefore order the further interim payment sought, namely £1.6 million.

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About the Author

Malcolm is an Senior Associate in our London office, with nearly twenty years' experience.

Malcolm Johnson
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