Comment
Following on the heels of Brown v Guy’s and St Thomas’ NHS Foundation Trust [2011], this case confirms that the approach in Eeles v Cobham Hire Services Ltd [2009] remains appropriate when considering applications for interim payments. The court must take into account the likely amount of the final judgment, which in substantial cases is likely to consist of both capital sum and periodical payments.
It is concerning however, that the decision appears to indicate a willingness by the court to include heads of loss unsupported by expert evidence and a readiness to apply a large proportion of the retained capital sum, up to 90 per cent, in the calculation. Clearly decisions turn on the facts of each case but it is important that defendants ensure no erosion of the principle in Eeles that a trial judge’s discretion must not be fettered.
Background
The six year old applicant suffered from spastic quadriplegia, mental retardation and associated behavioural difficulties. Liability for his injuries had been admitted and interim payments of £300,000 and £800,000 had already been made. The second interim payment had been made to enable the applicant’s parents to purchase suitable accommodation for him. His parents had sold their property and moved into rented accommodation, pending purchase of a suitable alternative property.
The purchase having been completed, the applicant applied (by his father and litigation friend) for a third interim payment of £400,000: £280,000 to adapt and extend the new property and £120,000 for his care and therapy regime until a case management conference fixed for October 2014. The Trust opposed the interim payment on the grounds that:
- It was disproportionate
- Payment of the building costs would render the playing field unlevel
- There was no reasonable need
The Trust argued that the only work required to be done immediately was the conversion of the garage. To provide funds to allow the other proposed works would distort the claim against them.
Held
Referring to CPR 25.7(4), Mr Justice Owen held that for the application to be successful the court had to be satisfied that, on a conservative approach, the total of the interim payments made would not exceed 90 per cent of the amount the applicant was likely to be awarded at trial as a capital sum.
Based on schedules completed by the parties, and adopting the approach that the trial would not take place before the applicant was eight years old, the court assessed that the conservative value for the likely capital sum was in excess of £2 million.
The figure claimed for care would be adjusted downwards to reflect the fact that some care costs would have been incurred in any event because the applicant’s parents were highly qualified professionals who worked full-time. Despite the absence of expert evidence, a sum for assisted behaviour therapy would be taken into account.
Owen J held it had been reasonable for the applicant’s parents to sell their home when a buyer was found and move into rented accommodation whilst looking for an alternative property to purchase. Rental costs claimed would therefore, be taken into account and amounts for property conversion and extension were allowed. A provisional figure of £170,000 was taken for general damages. A broad brush approach was taken to other claimed damages. Even if the extension costs were deducted, the total of the interim payments would not exceed 90 per cent of the capital sum likely to be awarded at trial.