Divorce, Dissolution and Separation Bill – what it means and where it is at now
In the third of our annual updates on the post-Eeles landscape, it is apparent that the courts and practitioners continue to grapple with complex issues thrown up by large interim payment applications. In the text that follows, we summarise the seven cases reported since May 2011 in chronological order and identify some practical implications of these decisions.
Wilson v Dummett 
On 27 May 2011 HHJ Llewellyn QC gave judgment in Wilson v Dummett . The case arose from a road traffic accident in which the claimant was critically injured. She sustained fractures to C1 and C2, damage to her brain stem, dissection of her left vertebral artery and a concussive brain injury. She was tetraplegic and locked in. She had preserved consciousness and mental capacity, required ventilation through a tracheostomy tube for 12 hours a day, was doubly incontinent and totally dependent on others. The defendant admitted liability on a 70% basis.
Since sustaining her injuries the claimant had been an inpatient for five years at various hospitals. The only discharge from hospital, to rented accommodation near to her parents’ home, was cut short after four days due to the claimant contracting a chest infection which developed to such an extent that she had to return to hospital and spend three months substantially in intensive care.
The claimant had already received interim payments of £348,000 and her wish was to be discharged from hospital and cared for in her own property, by her own employed carers. Therefore, she applied for a further interim payment of £400,000 to meet the costs of a privately funded care regime outside the hospital setting.
Before carrying out the Eeles 1 assessment of general and special damages, HHJ Llewellyn QC was required to determine three matters of principle.
Upon undertaking an Eeles 1 assessment, HHJ Llewellyn QC calculated the lump sum element of the likely award to be £739,507, of which the claimant would recover 70% (£517,654). This figure was £169,654 above the total interim payment amounts previously paid to the claimant.
Turning to the Eeles 2 assessment, HHJ Llewellyn QC assessed the costs associated with the claimant’s proposed discharge from hospital. It was the claimant’s desire to be discharged, and the medical experts agreed that there was no medical reason why this should not occur. In light of evidence before him, HHJ Llewellyn QC felt able to take a confident view that the envisaged care regime would be capable of persisting to trial. Furthermore, he noted that, if discharge to a private care regime were to result in some crisis or curtailment of that regime, the trial judge would have the benefit of knowing how the claimant fared at home. On this basis, he was prepared to make an interim payment of £250,000 to cover the cost of privately funded careto trial.
Following judgment the defendant sought an order for their costs on the basis that the claimant only recovered a little over half of the amount sought. HHJ Llewellyn viewed this application in a broad way and concluded that the claimant had been successful in achieving ‘a very substantial payment for the purposes which it sought the interim payment’. Therefore, the claimant was entitled to her costs of the application on the standard basis to be assessed if not agreed.
Crispin v Webster 
The next case to be decided was on 4 November 2011. The claimant was injured in a road accident and rendered tetraplegic, with sensation being partially intact below the level of C6. Upon discharge from hospital, the claimant moved to rented accommodation. She had received £355,000 by way of interim payments ;and sought a further £1m: £250,000 for general expenses and £750,000 to purchase a permanent home.
Haddon-Cave J considered the first part of the application to be reasonable and allowed the sum of £250,000 to cover further expenses up to the date of trial (listed for 12 months after the interim payment application hearing).
The main issue between the parties was, however, accommodation. The claimant had identified a property in central Winchester with a purchase price of £835,000 and adaptation costs of £333,000. Haddon-Cave J held that it was not possible to conclude on an interim basis that the trial judge would grant accommodation costs based on the cost of the property identified by the claimant. He noted at para 15 that there was a distinction between: "… what a claimant might understandably want or desire and what, in law, the claimant’s reasonable needs might be, measured by all the appropriate criteria". In conclusion, he went on to say: "I can understand the desire for the perfect, but it will be a matter for the trial judge to decide what the yardstick should be."
He considered that to determine this issue at an interim payment stage would fetter the trial judge’s discretion; therefore, he rejected the second part of the application and awarded the claimant an interim payment limited to £250,000 to cover general expenses to trial.
TTT v Kingston Hospital NHS Trust 
Owen J gave judgment in TTT v Kingston Hospital NHS Trust , a clinical negligence case where, as a result of the defendant’s admitted negligence, the claimant suffered from spastic quadriplegia with a degree of ataxia, mental retardation and associated behavioural problems. The claimant had already received the sum of £1.1m by way of interim payments and sought a further £400,000 to cover property adaptation costs of £280,000 (the property had been acquired from previous interim payment funds), with the balance of £120,000, together with the interim payment funds already held, to beretained by the claimant’s professional deputy. This was to fund care for a further 18 months until April 2013, when the next case management conference was expected to take place.
On a matter of principle, Owen J accepted that it was appropriate to assess past losses to April 2014, the claimant’s ninth birthday. This was on the basis of the claimant’s expert’s view that an assessment of the claimant’s prognosis, including life expectancy, could not be given until he had reached the age of eight. Therefore, a trial on quantum was assumed to be taking place 12 months after this to allow the experts instructed by both parties to assess the claimant and meet to prepare joint statements in advance of trial.
Owen J carried out an Eeles 1 assessment and reached a conservative
figure of over £2m. The defendant sought to use the level-playing-field
argument stating that, if the claimant’s property was adapted and extended at this stage, it could render the playing field uneven at any subsequent trial. This argument was rejected by Owen J because on his Eeles 1 assessment the total value of the lump sum element that was likely to be awarded by the trial judge exceeded, by some margin, the total interim payments that would have been made. The proposed expenditure fell within a reasonable range. Even if the property adaptation costs were deducted from the assessment, the total of the interim payments would not exceed 90% of the capital sum likely to be awarded at trial. Therefore, the claimant’s application succeeded and he was awarded £400,000 by way of interim payment.
FP v Taunton & Somerset NHS Trust 
In December 2011 Hickinbottom J gave judgment in FP v Taunton &
Somerset NHS Trust , a case that already featured in the list of
post-Eeles case law. This case is a wrongful birth claim in which the claimant’s son suffers from profound multiple disabilities, including learning difficulties and lack of mobility, has difficulties breathing and is ventilated via a tracheostomy. The complexity of the claimant’s son’s condition and the difficulty of prognosis led to an application on behalf of the claimant in July 2009 for a stay of proceedings until September 2016.
In 2009 there was a contested application before Blair J who ordered a further interim payment of £1.2m, taking the aggregate of interim payments received to that date to £1.7m. The reason for the interim payment in 2009 was to fund the purchase and adaptation of suitable accommodation. Since that application, the claimant had benefited from a saving of over £60,000 on the purchase price of the identified property and relocation costs. However, unexpected works to the roof were required and alteration costs had increased by approximately 50%. Therefore, the claimant sought a further interim payment of £643,500 to fund additional expenditure for accommodation and on-going care and case management on the basis that there should be a case management conference in September 2012.
At the July 2009 application there was a great deal of uncertainty regarding the life expectancy of the claimant’s son. Blair J had adopted a cautious approach and advanced on the basis of taking a life expectancy figure of 20 years, the lowest life expectancy suggested by any of the experts. Since the July 2009 application, however, there had been a significant improvement in the claimant’s son’s health and he became less dependent on ventilation. The claimant’s expert had, therefore, revised his original opinion and had concluded that it was now likely that the claimant’s son would become completely ventilator-independent and, if so, his life expectancy would be at least 60 years. However, the expert also accepted that there was a real possibility that he would remain dependent at night. Even on that basis, he considered the claimant’s son’s minimum life expectancy to be 40 years.
Hickinbottom J noted that Blair J had made findings in relation to the Eeles 1 assessment after two days of submissions. He followed those findings and only departed from them where there was good cause to do so:
Therefore, Blair J’s assessment of the likely capital sum to be awarded at trial (£1.m) was increased to £2.3m. The claimant’s interim payment request of £643,500 would have taken interim payments to over £2.3m. On this basis, Hickinbottom J ordered a further payment of £500,000 to cover the additional amount that the court considered a trial judge would award as a capital sum over and above that identified by Blair J.
Oxborrow v West Suffolk Hospitals NHS Trust 
Oxborrow v West Suffolk Hospitals NHS Trust , heard by Tugendhat J, was the first of three cases to be decided within a week in April 2012, all of which concerned the issue of future accommodation. The case related to injuries sustained at the claimant’s birth, resulting in him suffering from quadriplegic cerebral palsy. The defendant admitted liability and interim payments of £100,000 had been made by consent. The claimant sought a further interim payment of £740,000 to fund suitable accommodation. The NHS Litigation Authority’s position, expressed through their solicitors, was that a rental property could be acquired and adapted to meet the claimant’s needs. The claimant’s position was that rental was not an option.
The claimant advanced alternative cases. The first calculated the likely lump sum to include the full purchase cost of suitable accommodation; in the second case, the accommodation claim was advanced on the conventional Roberts v Johnstone  basis. The defendant chose not to serve any evidence in defence of the application because the counter schedule was due to be served in April 2012, with experts’ meetings taking place in July 2012.
Tugendhat J noted at para 30: In the absence of any support from a decided authority, or any commentator, and in the absence of any evidence, I see no likelihood of the final judgment including an assessment of damages based on continually renting accommodation for the claimant.
He went on to note that, if the final judgment included provision of accommodation in accordance with the Roberts v Johnstone principles, then there would be a shortfall between the sum sought and the Eeles 1 assessment. It was necessary, therefore, to move on to the Eeles 2 assessment. Tugendhat J noted that the court could have a high degree of confidence that the trial judge would allocate, by way of damages in the form of a lump sum, sufficient capital to enable the claimant to be accommodated in accordance with the requirements set out in the experts’ reports that were before the court. It was common ground between the parties that the claimant’s existing accommodation was inadequate and for these reasons Tugendhat J ordered the sum of £740,000 by way of interim payment.
In relation to the submissions advanced by the claimant in respect of the suitability of the Roberts v Johnstone principles, Tugendhat J held at para 47: I recognise that the approach to the issue of accommodation is now so well established that a court, at least in the first instance, and especially on an interim application such as the present, should not depart from it, or more precisely should not proceed on the footing that the trial judge is likely to depart from it. In these circumstances I prefer to express no view.
Szatmari v Oxford Radcliffe Hospitals NHS Trust 
Four days after the decision in Oxborrow, Cooke J handed down his decision in Szatmari v Oxford Radcliffe Hospitals NHS Trust  on 24 April. This case concerned an application for an interim payment of a little short of £1m to purchase and adapt suitable accommodation for the claimant. The trial on quantum was scheduled for 21 January 2013, some nine months after the interim payment application. The claimant had already received interim payments totalling £411,000. The issue between the parties was the cost of suitable accommodation. Both parties agreed that the current accommodation in which the claimant lived was unsuitable, but there was a major difference between them as to the appropriate criteria and the cost required to obtain a suitable property.
Although Cooke J noted that the claimant would be able to manage in his current accommodation until trial, there was a sufficiently pressing need for suitable accommodation within the meaning of the test in Eeles. In relation to the Roberts v Johnstone calculation, the claimant valued the claim at £791,000 whereas the defendant’s figure of £391,000 was put forward by reference to the evidence of the defendant’s solicitor. While Cooke J accepted that the likelihood must be that the sum ultimately recovered would be somewhere between the defendant and claimant’s figures, he was not, however, able to take a view as to the amount in excess of the figure that the defendant put forward.
Upon undertaking an Eeles 1 assessment, Cooke J concluded that the capital element of the award was likely to be in the sum of £890,771, from which interim payments received previously of £411,186 had to be deducted. The net figure, therefore, amounted to £479,585. On the claimant’s evidence, he required £600,000 to purchase a home and over £300,000 for adaptations. Therefore, the Eeles 1 figure fell well short of that required. On the defendant’s evidence, £400,000 to £440,000 was required to purchase suitable accommodation with adaptation costs in the order of £300,000. Cooke J held that the claimant would be awarded substantial sums at trial including some element of further capital apart from periodical payments. With a sum of £479,000 in hand, the claimant could start to look for a suitable property and purchase it with a view to adapting it at the earliest point when funding became available, in all likelihood immediately after trial. In the period beforehand, the claimant would be able to look for suitable properties in circumstances where the court could be confident that the claimant would, one way or another, carry out the necessary adaptations.
Sedge v Prime 
The third case to be decided was Sedge v Prime , heard by Leighton Williams J on 25 April. The case arose from a road traffic accident in which the claimant sustained catastrophic injuries resulting in wheelchair dependency, double incontinence, an inability to speak and reasonably well controlled epilepsy. He required 24-hour care. His cognitive and intellectual functions were significantly limited, but the full extent of the limitations was not clear at the time of the interim payment application. Since sustaining his injuries, the claimant had resided in a community residential care home called ‘Little Oyster’ run by his local authority.
Following a contested trial on liability in January 2011, the defendant was held liable to the claimant, but with a finding of 25% contributory negligence. An interim payment of £175,000 was ordered by Master Kay in April 2011. That interim payment was required to instruct a case manager and to fund a support worker and various other care needs. Also in April 2012, a best interests meeting took place under the Mental Capacity Act 2005, which was attended by an independent mental capacity advocate and the professionals involved in the claimant’s care. Those present at that meeting considered that it would be in the claimant’s best interests to move to a bungalow and receive his own care within the community.
Within the litigation context, the medical evidence was divided over whether or not the claimant should remain at Little Oyster or move into his own accommodation. The claimant’s experts positively supported a move to his own accommodation; the defendant’s experts were, at least on balance, against it. Therefore, the claimant was required to issue an application for an interim payment of £300,000 to enable a bungalow to be rented and a trial of community living to take place in advance of the quantum trial expected to be listed for October 2013.
One of the issues between the parties was whether a trial of care in his own accommodation would create an uneven playing field. The defendant criticised the best interests meeting: put simply, they stated that the third option of continued care at Little Oyster supplemented by hired-in care and therapies had not been considered at all. The defendant also suggested that the meeting was ‘engineered’ to pre-date the hearing of the interim payment application, noting that no clinician had attended, and that some of those who had attended would be active in the claimant’s community rehabilitation package and had a financial interest in the claimant being accommodated in the community as opposed to at Little Oyster. Furthermore, the defendant claimed that the outcome of the best interests meeting was irrelevant to the decision the court had to make, stating that it did not even offer guidance to the court.
Leighton-Williams J noted that it was not his function to decide whether or not residential accommodation in a care home or independent living in the community was appropriate for the claimant, as that was an issue for the trial judge applying the test of what was necessary to meet the claimant’s reasonable needs, not what was in his best interests. Leighton-Williams J was referred to two previous interim payment decisions (Brown v Emery  and Mabiriizi v HSBC Insurance Ltd ) where the issue of the appropriateness of the claimant leaving residential care to move to privately-funded domiciliary care was considered. However, Leighton-Williams J distinguished the present case from both Brown and Mabiriizi: in that in the current case the claimant was not seeking to fund the purchase of accommodation indefinitely, but instead to rent accommodation and implement a trial period of care. Applying the level-playing-field argument to the facts of this case, Leighton-Williams J noted, at para 47: In the present case insofar as there is a risk that the alleged level playing field will be altered by making an interim payment, I am satisfied that it would not be plainly wrong to make an award of a reasonable proportion of the final award. Those responsible for the claimant’s care and welfare have a statutory obligation to keep his best interests at heart. Should the proposed trial fail residential care will be resumed. I conclude therefore that allowing monies to be spent on such a trial will not alter the level playing field to such an extent that the defendant will be unfairly prejudiced. By contrast, not to allow such a trial might well unfairly prejudice the claimant.
Turning to the Eeles 1 assessment, Leighton-Williams J estimated the likely value of the lump sum award to be in the region of £508,214 after a 25% reduction for contributory negligence. After deducting the £175,000 of interim payments already received, the net figure amounted to £333,214. Leighton-Williams J then turned to the Eeles 2 assessment and was satisfied that it was reasonable for a trial of community care to take place. On the evidence before him, he saw no point in deferring that trial; the sooner it took place, the sooner the trial judge would be able to decide what form of future care needs would meet the claimant’s reasonable needs. However, Leighton-Williams J was not satisfied that the £300,000 requested was a sum reasonably required before trial. He was concerned that he should not award a sum that would encourage the trial rental period to run for longerthan necessary. He considered that by December 2012 (eight months after the interim payment application hearing), the claimant’s advisers should be in a position to know whether or not community care was in the claimant’s best interests. Therefore, he ordered an interim payment of £150,000, which, together with the balance of £85,000 left from the previous interim payment, should be adequate to fund the claimant’s needs to December 2012. If the way forward was privately funded care in his own accommodation, then consideration could be given at that stage to a further application for an interim payment.
In concluding his judgment Leighton-Williams J gave a warning for claimants in future cases. At para 60, he stated: "I would like to stress that I have reached my decision on the facts of this case, in particular on the improvements the claimant has recently demonstrated, and that what is proposed is not the purchase of accommodation but rental for a trial care regime. Claimant’s solicitors should not regard my decision as in any way encouraging trial runs of community care at insurers’ expense. Each case will depend on its own facts."
What practical points have developed from this latest tranche of cases applying the Eeles’ principles? It appears the issue causing the most contention between the parties and difficulty for the court is the need for an interim payment to fund the purchase and adaptation of a property. In the list that follows, we set out points that personal injury practitioners should consider, and be aware of, while making an interim payment application.
The cases summarised above provide cautionary tales for claimants and defendants, and it is becoming clear what the court expects by way of evidence at an interim payment application. The parties to litigation should heed the principles emerging from the case law and depart from the courts’ guidance at their peril. We cannot summarise the recent case law any better than Hickinbottom J at para 18 in FP: Eeles requires a disciplined and structured approach to interim payments that ensures that awards are made in a principled way, avoiding the twin risks of over compensating a claimant and keeping him out of damages at a time when he is likely particularly to require the money to enable him to cope with the injuries caused by the defendant…
Further, the structured approach in Eeles is equally appropriate to a case in which a partial award is made or where the eventual capital award may otherwise be reduced below the actual needs of the claimant. Indeed, where cases are marginal… it is even more important that there is adherence to that approach, to avoid error and potential embarrassment for the trial judge.
Richard Lodge and Dr Jock Mackenzie
Brown v Emery  EWHC 388 (QB)
Cobham Hire services Ltd v Eeles  EWCA Civ 204
Crispin v Webster  EWHC 3871
FP v Taunton & Somerset NHS Trust  EWHC 3380 (QB)
Kirby v Ashford & St Peter’s Hospital  EWHC 1320 (QB)
Kirby v Ashford and St Peter’s Hospital NHS Trust (No 2)  EWHC 624 (QB)
Mabiriizi v HSBC Insurance (UK) Ltd  EWHC 1280 (QB)
Oxborrow (A Minor) v West Suffolk Hospitals NHS Trust  EWHC 1010 (QB)
Roberts v Johnstone (1989) QB 878
Sedge v Prime  MHLO 66 (QB)
Szatmari v Oxford Radcliffe Hospitals NHS Trust  EWHC 1339 (QB)
TTT v Kingston Hospital NHS Trust  EWHC 3917 (QB)
Wilson v Dummett & anor (Unreported 25 November 2011)
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