The Keys to the House – Interim Payments for Accommodation

October 11, 2016

by Amanda Yip QC

Obtaining a substantial interim payment to allow for the purchase and adaptation of a new home is often one of the most important parts of a catastrophic injury claim.  Since the Court of Appeal handed down its decision in Eeles v Cobham Hire Services Limited [2009] EWCA Civ 204, claimants have had to work harder to secure large interim payments.   However, recent cases have demonstrated that, with the right evidence, the hurdles can be overcome. The key to success is having a strategic and analytical approach.

The Eeles two-stage approach

The correct approach “in a case in which the trial judge may wish to make a PPO” is summarised very succinctly at paragraphs 43 to 45 of Janet Smith LJ’s judgment.  The statement in support of an application should refer to those paragraphs and the evidence should be directed towards them.  Any evidential gaps should be plugged before it is too late.  An easy to read guide to the two-stage approach is to be found in the judgment of MacDuff J in Chrissie Johnson v Compton-Cooke  [2009] EWHC 2582 (QB), at paragraph 23:

  • Assess the likely amount of the final judgment leaving out of account those heads of damage which the trial judge might want to deal with by a periodical payments order.  This should comprise special damages to date, damages for pain, suffering and loss of amenity, and (usually) an estimated award for accommodation costs to include future running costs.  This assessment should be carried out on a conservative basis.
  • Save in circumstances set out below, the interim award would be a reasonable proportion of that assessment – even a high proportion if the assessment had been truly conservative ….  For this part of the process there was no need to have regard to what the Claimant wished to do with the money ….
  • There could be a second phase to the exercise.  Where the Court could “confidently predict” that the trial judge would wish to award a larger capital sum than that covered by general damages, special damages, interest and accommodation costs, those additional capital elements could be brought into the assessment.
  • However, before taking into account these “second phase” heads of damage the court should be satisfied to a high degree of confidence that there was a real need for the interim payment requested.  The court would then be justified in predicting that the trial judge would make those additional capital awards, and the assessment could then take account of those anticipated awards, so as to permit the making of the necessary interim award.

The difficulty in managing an accommodation claim at the interim stage

Post-Eeles, there is far greater scrutiny of the claimant’s choice of property when an interim payment is sought for accommodation.  The Roberts v Johnstone method means that there will always be a shortfall between the sum recovered and the true cost of property.  If there is also a dispute about the reasonable cost of a property, the judge at the interim stage may be persuaded to use the defendants’ figures for the purpose of a conservative estimate.  The probability is that there will not be enough in the “pot” at the first stage to meet the cost of a chosen property.  The judge then has to enter the second stage of Eeles.  Generally, where there is a need for accommodation, the judge will accept that a capital sum will be allowed for purchase and adaptation of a property.  How much should that capital sum be?  The judge can be highly confident that it will not be less than the sum based on the defendants’ evidence but it may be difficult at the interim stage for the judge to be confident that the claimant’s evidence will prevail.  The risk is that claimants will be faced with a choice of buying a property deemed to be suitable by the defence expert or sitting it out in wholly unsuitable accommodation until trial.

In Griffin v Ponsonby [2013] EWHC 3410 (QB), the defendant produced a draft accommodation report the day before the hearing proposing cheaper alternatives to the claimant’s expert’s proposals.  It is clear from the judgment that the judge (Mrs Justice Andrews) took a very cautious approach generally and was concerned about the risk of over-compensating the claimant at the interim stage.  She said at paragraph 19:

“Taking into account what the Court of Appeal has said, which is that the objective is not to keep the claimant out of his money but to avoid any risk of overpayment, it seems to me that the only appropriate approach in a case such as this, imperfect as it is, is to take as the starting point the bottom line figure of the defendant’s expert….”

However, good evidence may allow the judge hearing the interim payment to confidently predict that the sum sought by the claimant is the amount a trial judge would allow, notwithstanding that the defendant puts forward expert evidence to suggest a cheaper property would be appropriate.  An example is the decision of Mr Justice Kenneth Parker in Farrell v Salford Royal Foundation NHS Trust, 12th December 2014 (unreported but a copy of the judgment can be supplied on request).

In that case, the defendants suggested that the judge should take the mid-point of their expert’s range as the reasonable sum for the purpose of a conservative assessment.  However, the claimant produced evidence detailing the real efforts that had been made to find a suitable property over a period of 18 months and gave specific reasons why other cheaper properties had been rejected.  The judge agreed that the claimant should have the funds to purchase the property she wished to.  The reality was that there were no suitable properties currently available in the price range identified by the defendant’s expert, whom the judge described in the course of the hearing as an “armchair expert” as he had expressed a view on the likely purchase price without taking steps to properly research what was currently available.  The case demonstrates that defendants will not be able to defeat proper applications simply by putting forward unsupported alternative figures.  Judges will be prepared to look behind defendants’ figures provided there is a sufficient evidential basis for them to do so.

The current climate: is the tide turning?

As the impact of Eeles was felt, it appeared that judges were perhaps less inclined to order substantial interim payments than before.  However, a number of recent cases suggest that judges are not being blinded by attempts by defendants to defeat proper applications with unsubstantiated assertions.  In Moore v Plymouth NHS Trust [2013] EWHC 3193 (QB), Mr Justice Stuart-Smith appears to have been fairly unimpressed with the defendant’s late service of medical evidence.  Although prepared to accept that the evidence raised issues for trial, the judge took a sensible view looking behind the defendant’s evidence and concluding that the figures put forward by the defendant at the interim stage were to be treated as an “irreducible minimum”.  On that basis, he ordered the interim payment sought since it could (just) be accommodated within the defendant’s figures.

Likewise, Mrs Justice Whipple was not impressed by the defendant’s position in AC v St George’s Healthcare NHS Trust, where it is clear strong evidence had been presented by the claimant.  It was argued that the defendant was disadvantaged as it had not had time or permission to obtain much quantum evidence.  The judge rejected this, saying that the issue was a narrow one going to the claimant’s reasonable accommodation needs and, given that the defendant had been alerted to the application eight months earlier, there had been a reasonable amount of time for the defendant to put in hand its own investigation of the accommodation issues.

In Smith v Bailey [2014] EWHC 2569 (QB) Popplewell J upheld an interim award made by a Master.  The defendant had raised contributory negligence and suggested that at the interim payment stage the burden was on the claimant to establish the amount he was likely to recover after taking account of the possibility of contributory negligence.  Upholding the Master, the judge held that the evidential burden was on the defendant to put before the court material raising an issue of contributory negligence.  In other words, defendants will not be able to defeat applications simply by asserting that there might be a finding of contributory negligence without a proper evidential basis for that.

A similar approach was taken in relation to causation issues in Sellar-Elliott v Howling [2016] EWHC 443 (QB).  Mr Justice Sweeney dismissed an appeal against an interim payment order.  In doing so, he considered the position where a defendant was advancing a positive case on causation but had not served evidence in support of her case in advance of the interim payment hearing.  The judge held that CPR 25.6 made it clear that there was no obligation on either party to file supporting evidence; there was simply an option to do so. The patient had served supporting evidence and the doctor, as was her right, had chosen only to serve limited evidence in response. The master had been right to find that he should decide the application on the evidence before him. It was also clear that, on that evidence and in the absence of anything to the contrary from the doctor, the master had been entitled to find the patient’s expert evidence compelling and sufficient to satisfy CPR 25.7(1)(c).

In Barrett v East and North Hertfordshire NHS Trust [2014] EWHC 416, Mrs Justice Swift had to consider defence arguments that the purchase of a property should not be allowed at the interim stage.  It was contended that there was an issue as to whether it was in the claimant’s best interests to move out of a care home into his own property.  Swift J examined the evidence carefully, placing particular reliance on the evidence of those who knew the claimant well and who had seen his reactions to his current regime and the idea of an alternative arrangement.  This is another illustration of how judges can be persuaded to enter into a proper consideration of the evidence rather than simply accepting that arguments raised by defendants must be put off to the trial judge.

What is clear from the cases decided since 2009 is that it is necessary to grasp all the issues relevant to an accommodation claim at the interim stage.  Good evidence is required.  Statements may detail the huge difficulties faced in the existing accommodation, how the search for property has been approached and why the particular property is reasonable.  Expert evidence must be firmed up.  It may be necessary to demonstrate that the defendants’ expert has taken an unreasonable view.

Practical tips for interim payment applications

(i) Think of the interim payment stage as a case within a case.  As with any case, the quality of the preparation and the evidence determine the outcome.

(ii) Start thinking about an interim payment at an early stage, well before needs become desperate.  Put accommodation on the agenda right from the start.

(iii) Consider the qualifying conditions. Have they been met?  Is liability in dispute? Primary liability must be resolved or at least clear before an application can be made. What could be done to deal with liability promptly? Might settlement discussions about liability and an interim prove fruitful for both sides?

(iv) Is seeking a substantial interim payment the right strategy for the particular case?  In most catastrophic injury cases it will be but there are some cases (perhaps those with a real dispute about how accommodation should be managed or where there is split liability) where the better strategy might be to expedite trial.

(v) Engage with defendants as to what evidence would need to be produced to allay their concerns about making an interim payment.  When real cooperation exists between the parties, dealing with an interim payment application can offer an opportunity to scrutinise expenditure in a balanced way to ensure both sides are getting cost effective solutions.

(vi) Think about timing of the application and the time it will take to list it.  Do not delay but ensure there is sufficient time to gather the necessary evidence.  Think of the hearing as a “mini-trial”.

(vii) It undoubtedly helps to have as full a Schedule as possible.  Consider also producing another Schedule demonstrating a conservative estimate. The court will largely ignore the claimant’s “best case” Schedule.  Putting a conservative assessment before the court, with reference to both sides’ evidence gives the court something other than the Counter-Schedule to work from.

(viii) The statement in support of the application is important and pays close attention.

(ix) Test the evidence as you would if preparing for trial.

(x) Ensure there is good clear evidence of real need if the application seeks any more than sums that will clearly be met from past loss and general damages.

(xi) Appreciate that how an interim payment application is handled can set the tone for the litigation.  Eeles has reinforced the need for proper and careful preparation at the interim stage.  Taking that approach will not only affect the application itself but will also get preparation in the case as a whole off to a good start.