The judgment in Eeles has prompted discussion on what the future holds for seriously injured claimants seeking substantial interim payments to purchase and adapt accommodation. Stephen Hazelton joins the debate
Some have interpreted the judgment in Eeles v Cobham Hire Ltd [2009] EWCA Civ 204 as an authority for the proposition that an interim payment must not exceed a reasonable proportion of the lump sum element of an award at trial and that only general damages, past loss and accommodation (including adaptations) can be taken into account in assessing that lump sum. As a result of this it has been argued that severely physically injured claimants in need of adapted accommodation will be prevented from obtaining it (see ‘Upsetting the apple cart’ Solicitors Journal, 153/16, 28 April 2009). I question this interpretation.
The claimant in Eeles had only limited physical disability. He lived in a five-bedroom house which had already been adapted to provide a therapy room. He did not need alternative adapted accommodation. However, the Court of Appeal was acutely aware that other claimants will have such a need and it allowed for this need in its judgment.
At para.38 of her judgment Lady Justice Smith said: “There will be cases (Braithwaite was one such) in which the judge at the interim payment stage will be able confidently to predict that the trial judge will capitalise additional elements of the future loss so as to produce a greater lump sum. In such a case a larger interim payment can be justified. Those would be cases in which the claimant can clearly demonstrate a need for an immediate capital sum, probably to fund the purchase of accommodation. In our view, before a judge at the interim stage encroaches on the trial judge’s freedom to allocate (periodical payments), he should have a high degree of confidence that such a course is appropriate and that the trial judge will endorse the capitalisation undertaken.”
Proving the need for alternative accommodation
The Court of Appeal expressly endorsed the approach which had been taken by Mr Justice Stanley Burnton in Braithwaite v Homerton University Hospitals NHS Foundation Trust [2008] EWHC 353. The claimant in that case was a three-year-old boy with severe quadriplegic cerebral palsy. He lived with his mother in unsuitable local authority housing accommodation which was insufficient for the employment of professional carers. He sought an interim payment of £850,000 to purchase and adapt a property. The claim was estimated to be worth £3.6m, but of that only £200,000 related to general damages and past loss. Stanley Burnton J awarded the interim payment sought. He did so because the accommodation was clearly needed and therefore he could predict confidently that the trial judge would endorse his capitalisation of future loss.
So, the claimant who needs alternative accommodation is still able to secure an interim payment to purchase and adapt that accommodation, but following Eeles he/she is now going to have to satisfy the court that there is a real need for the accommodation now (as oppose to after trial) and that the amount of money requested is reasonable.
When making an application for a substantial interim payment, claimants will now need to produce medical evidence to prove the need for alternative accommodation and expert accommodation evidence to demonstrate expenditure of the amount sought is reasonably necessary.
Also, when hearing the appeal in Eeles, the court made it clear the claimant’s solicitor will need to produce a schedule setting out the likely value of the claim; as will a defendant who opposes an application. This is not to say that financial advisers’ reports are needed. On the contrary, in her judgment in Eeles, Lady Justice Smith said that only in exceptional cases would there be a need for such a report at the interim payment stage.
Clear guidance
It has also been argued that Part 25 of the Civil Procedure Rules (CPR) needs to be amended to reflect the impact of periodical payments and that there will possibly be a lot of satellite litigation as a result of Eeles. However, I believe that is unlikely. The Eeles case is the first time the Court of Appeal has considered interim payment awards since the Damages Act 1996 was amended by the Courts Act 2003 to give the court the power to order periodical payments regardless of whether one or both parties object (indeed Part 41.7 CPR provides that the court must make whatever order is in the claimant’s best interest).
The Court of Appeal took the opportunity to give guidance as to the approach that should be adopted when interim payments applications are made by or on behalf of severely injured claimants. The guidelines set out by the court are clear such that an amendment to Part 25 seems unnecessary and satellite litigation should be avoided.
Stephen Hazelton is a partner at Berrymans Lace Mawer LLP, which acted for Allianz, the insurer of the defendant/appellant in Eeles.
This article first appeared online at http://www.solicitorsjournal.com/ on 26 May 2009. The article is not a substitute for specific legal advice and should not be relied upon as such. http://www.solicitorsjournal.com/