EF (Acting by his Litigation Friend, GH) v Annys Jane Darkwa

Hearing date: 25 March 2019

This a personal injury claim arising from a road traffic accident that took place on the 18 ^th of January 2014. The Claimant, who is now aged 45, was crossing the road when he was hit by a car being driven by the First Defendant. He suffered multiple injuries, including a brain injury. On the 17 ^th of October 2018 the Claimant accepted a Part 36 Offer from the Second Defendant to pay him 85% of the full value of his claim. That settlement was approved by the Court on 29 October 2018 but quantum remains in dispute.

On 8th October 2018 the Claimant issued an application for an interim payment of £500,000. The application was due to be dealt with at a hearing on 1 November 2018. However, shortly before the hearing, the Claimant and the Second Defendant reached an agreement whereby the Second Defendant would voluntarily make an interim payment of £225,000 with the claim for the balance of the £500,000 (i.e. £275,000) being adjourned to another date. The Second Defendant has made £900,000 in interim payments to date, including the £225,000 paid in November 2018. The £275,000 contended for now would take the total to £1,175,000.

This is the reserved judgment on that adjourned application. It follows a Costs and Case Management Conference where directions were ordered through to listing for a 10-day trial in March 2020.

The interim payment application is supported by a large amount of documentation, comprising from the Claimant two ring binders being those for the main CCMC, three further ring binders for the interim payment application and a further bundle provided on behalf of the Second Defendant. Both counsel provided me with detailed skeleton arguments reviewing that material.

I am told that the voluntary payment has primarily been used to fund accommodation costs, Case Manager, treatment/therapies, transport costs and the Claimant's “support worker regime”. The Claimant's current “monthly spend” is, according to his Solicitors witness statement, £33,182.78. Within that figure approximately £18,000 per month is being spent on case management and support worker costs (i.e. some £215,000 p.a.).

The Senior Courts Act 1981 s.32 allows rules of court to provide for interim payments, meaning payments on account of damages, debt or other sums (other than costs) which the defendant may be liable to pay. The discretionary power to order an interim payment is under CPR 25.6. The conditions that must be satisfied before that power is exercised are set out in CPR 25.7. Given the acceptance and approval of the Part 36 offer on liability, rule 25.7(1)(a) is satisfied: “the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant”.

CPR r.25.7(4) provides that ‘The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment.’ As the note at paragraph 25.7.1 of the 2018 edition of the White Book says, ‘The jurisdiction to order an interim payment is an exception to the general principle that a defendant has a right not to be held liable to pay until liability has been established by a final judgment’.

Rule 25.7(4) therefore contains two important limits:

(i) the court must have regard to what is ‘likely’ to be the final judgment; and

(ii) an interim payment may not be more than a ‘reasonable proportion’ of that likely final judgment.

The expression ‘reasonable proportion’ is not further elaborated in the Rules. In Cobham v Eeles [2009] EWCA Civ 204 Smith LJ said that, ‘A “reasonable proportion” may well be a high proportion provided the assessment has been a conservative one. The objective is not to keep the Claimant out of his money but to avoid the risk of over-payment.”

For reasons elaborated upon below, the issue in this application is whether the balance of the monies sought would risk either overpayment to the Claimant or constitute more than a “reasonable proportion”.

Although familiar to counsel and the court, and in respect of which there appears no material difference on their application as principles of procedure, it is worth summarising the two stages of analysis in Eeles.

In “Eeles I”, the first task is 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 way of a Periodical Payments Order (“PPO”). This assessment comprises special damages to date, general damages and accommodation costs. However, “Eeles II” recognises there are circumstances in which the judge will be entitled to include in their assessment of the likely amount of the final judgment additional elements of future loss. This can be done only when the judge hearing the interim application can confidently predict that the trial judge will wish to award a larger capital sum than that covered by general and special damages, interest and accommodation.

Focusing a little further on “Eeles II”, it is important to note all the heads of damage (future loss of earnings, costs of care, case management, therapies, equipment, increased holiday costs, and Court of Protection costs) that are potentially the subject of PPOs. For the purposes of an interim payment application, the judge should not normally begin to speculate about how the trial judge will allocate the damages. As a rule, he should stop at the figure which he is satisfied is likely to be awarded as a capital sum [Para 37]. The degree of confidence required to predict that the trial judge will capitalise additional elements of future loss so as to produce a greater lump sum must be high. The case for a larger interim payment arrived at by this approach is likely to reflect a case in which the claimant can demonstrate a need for an immediate capital sum [Para 38]. At Para 45 in Eeles, Lady Justice Smith went further to describe this as a mandatory consideration:

“Before taking such a course, the judge must be satisfied by evidence that there is a real need for the interim payment requested. For example, where the request is for money to buy a house, he 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…… But the judge must not make an interim payment order without first deciding whether expenditure of approximately the amount he proposes to award is reasonably necessary”.

The Claimant's application

The Claimant's application summarises the background of the Claimant having suffered a severe traumatic brain injury, together with multiple fractures from his left shoulder to his ribs, his right arm, the lumbar vertebral bodies from 2 ^nd to 5 ^th, his pelvis and his left leg. He had a prolonged inpatient stay first in hospital and then in a rehabilitation centre. He was not discharged home until 2 years and 8 months post-accident. Even when he was discharged home he required a 24-hour support package. He has been left with ongoing physical and cognitive difficulties, which will be permanent. He continues to require 24-hour support.

Counsel for the Claimant Miss Mortimer referred me to the report from Ms Clark-Wilson, the Claimant's care and rehabilitation expert, dated 11 ^th March 2019, and her updating letter dated 19.03.19.

The Claimant is confirmed to have, and need, support workers 24 hours a day “ in the event he needs any physical interventions to manage his care and support to prevent him from harming himself in the future”. Whilst he (and his fiancée) participate in social activities and musical events, he is said to require “ backup support to enable them to manage”. A Team Leader is employed along with another three support workers. They have noted unpredictable changes in the Claimant's mood with no particular triggers.

A list of examples illustrates a wide range of circumstances and responses. Some of the responses have involved expressions to the effect that the Claimant wished he was dead.

Whilst such expressions are described in the report as “suicidal ideation”, at least from this list of examples the distinction between genuine intent and frustrated expression depending upon the particular moment is not entirely clear. For example, on 14 ^th September 2018 the support workers record how the Claimant's mood was “ up and down all day” in response to his brother dying yet, three days later on 17 ^th September 2018, the Claimant said he was going to starve himself until he died when low in mood and frustrated about doing exercise that he did not like doing. Similarly, the entry 17 ^th October 2018 describes the Claimant as having become “ very angry and shaking when he wanted a soft drink after a concert but most of the shops were closed, and it was suggested to return home”.

This not being a mini-trial and the court at this application not having the benefit of oral assistance from medical experts in evidence as it would at trial, it is accordingly not only very difficult but inappropriate to try to interpret the relationship between cause and effect of these recorded episodes, save to note that the Second Defendant's case is that the Claimant has become overly dependent upon his intensive care regime and, according to its experts, that regime is proving counter-productive to him resuming reasonable independence.

Ms Clark-Wilson addresses the need for...