Interim Payments
Louise Hill (A protected party, by her sister and litigation friend, Naomi Chapman)
-v-
East Kent Hospitals University NHS Foundation Trust
The issue of what constitutes a ‘fair and reasonable amount’ for the purposes of an interim payment award, is a matter to which the courts have previously tried to lay down guidelines. Whilst these guidelines have assisted in avoiding contested hearings, issues still remain between parties as to what a reasonable amount can be, this is often dependent upon the factual matrix of a particular case.
Background
In Louise Hill (A protected party, by her sister and litigation friend, Naomi Chapman) v East Kent Hospitals University NHS Foundation Trust [2025] EWHC 1241 (KB), the High Court had to to determine the appropriate level of a further interim payment, where various payments totalling a seven figure amount had already been paid in the case.
The decision relates to a clinical negligence claim where liability had been admitted. The claimant had applied for an interim payment of £500,000, having received interim payments of £1,566,000 at various stages in the claim previously.
The claimant made an application seeking a further payment in relation to issues around PSLA, past losses and accommodation costs. The defendant contended that a further payment should not exceed £155,250. It was held by Annabel Darlow KC, sitting as a Deputy High Court Judge, that a further payment of £353,168 was justifiable at this stage.
Framework
The framework for interim payments is set out in Section V of CPR 25. The claimant must satisfy the court that one of the requirements of CPR 25.23 is met, and that evidence required by CPR 25.22 is available for the court to consider. Should the claimant do so, then the starting point is that court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment (CPR 25.20(1)). It is over this ground and the concept of a ‘reasonable proportion’ that most applications fall to be contested.
In Cobham Hire Services v Benjamin Eeles (By His Mother and Litigation Friend Julie Eeles) [2009] EWCA Civ 204, the Court of Appeal set out at paragraphs 43 to 45 inc. of its judgment, the two stage test that is applied to interim payment applications. The first stage of the test requires the interim judge to assess the likely amount of the final judgment, leaving out the heads of future loss which the trial judge might wish to deal with by way of a PPO. The first stage assessment should only comprise of damages for PSLA and past financial expenses, with interest being awarded on both. Accommodation costs may also be awarded as a lump sum in the first limb assessment.
The second stage of the test allows the court to include in their assessment some elements of future loss. In this second stage though, the court can only do this when they can confidently predict that the trial judge will wish to award a larger capital sum than covered by PSLA, past financial expenses, and accommodation costs. In this second stage the claimant also has to show that there is a real need for the payment now.
As can be seen the second stage may be more challenging to satisfy. Courts can be wary of fettering the trial judge’s ability to assess those future loss damages, and impinging upon the ability to address damages by way of a PPO.
In trying to determine the essential factors of the limb one test, Master Stevens in XSI (A Child Proceeding by her Mother and Litigation Friend XS2) v West Hertfordshire Hospitals NHS Trust [2024] EWHC 1865 considered that the essential factors were:
“ (1) CPR Rule 25.7(4) places a cap on the maximum amount which it is open to the Court to order by way of interim payment, being no more than a reasonable proportion of the likely amount of the final judgment.
(2) In determining the likely amount of the final judgement, the Court should make its assessment on a conservative basis; having done so, the reasonable proportion awarded may be a high proportion of the figure.
(3) This reflects the objective of an award of an interim payment, which is to ensure that the Claimant is not kept out of money to which he is entitled, whilst avoiding any risk of an overpayment.
(4) The likely amount of a final judgement is that which will be awarded as a capital sum, not the capitalised value of a periodical payment order (‘PPO’).
(5) The Court must be careful not to fetter the discretion of the trial judge to deal with future losses by way of periodical payments rather than a capital award.
(6) The Court must also be careful not to establish a status quo in the claimant’s way of life which might have the effect of inhibiting the trial judge’s freedom of decision, a danger described in Campbell v Mylchreest as creating “an unlevel playing field”.
(7) Accordingly the first stage is to make the assessment in relation to heads of loss which the trial judge is bound to award as a capital sum, leaving out of accounts heads of future loss which the trial judge might wish to deal with by a PPO. These are, strictly speaking:
Discussion
In Hill the court made its decision based exclusively upon the first limb of the Eeles test. It has to be remembered that it is not the job of the court to conduct a mini trial (PAL v Davison and others [2021] EWHC 1108 (QB)), and the judge at the interim stage must be careful not to determine matters properly left to the trial judge.
Whilst taking a conservative approach to the assessment of damages does not necessarily mean adopting the defendant’s figures, the court recognised that it must keep in mind the possibility that the defendant’s assertions may be accepted at trial. As such the court has to bear in mind the risks of awarding a high level of damages as a lump sum payment, as this may fetter the freedom of the trial judge to allocate damages having heard all of the evidence at trial.
The principle of conservative assessment has to be balanced with the clear principles expounded by the Court of Appeal in Eeles and Master Stevens in XSI. The courts have recognised that, whilst there is a need to avoid the risk of overpayment, and of fettering the trial judge’s freedom to make an appropriate periodical payment order, it is the court’s task to estimate the likely amount of the lump sum element of final judgment, not to keep the claimant out of their money.
Having concluded that a conservative figure was over £2.1m, the court applied a 90% proportion of that figure to its limb one calculation, which gave a figure of £1,912,500. With interim payments of £1,566,000 having already been made, an appropriate figure for a further interim payment was £353,168.
Conclusion
The decision is a helpful reminder that, even though a conservative approach is to be taken in reaching the interim figure under the limb one Eeles test, the court should should not shy away from awarding a high proportion of that conservative approach once it has been arrived at. An amount of 90% of that conservative figure is well within the court’s powers to award following the decision in AC v St George’s Healthcare NHS Trust (2015) EWHC 3644 (QB).
Andrew Cousins
iii.vi.xxv