Preston v City Electrical Factors Ltd & Anor

When assessing an application for an interim payment in a substantial personal injury claim, the court must consider whether the trial judge may make a periodical payments order. If so, the interim payment must not prejudice that decision. The court may include future losses in its assessment only where it can confidently predict that the trial judge will award a sufficient capital sum and there is a real, reasonably necessary need for the payment.

A split liability finding does not automatically prevent a periodical payments order. The court must consider the claimant’s preferences, the level and flexibility of the proposed periodical payments, life expectancy, future contingencies and the claimant’s actual needs. Where those matters make a periodical payments order unrealistic or too rigid, the court may grant a substantial interim payment on a conservative assessment of the likely award.

The claimant suffered a brain injury and personality disorder after being struck by a van. The defendants admitted liability for 50 per cent of the damages. More than £100,000 had already been paid, and the claimant applied for a further interim payment of £100,000 pending a trial on causation and quantum.

The defendants argued that the payment might reduce the capital available to the trial judge and prejudice a periodical payments order for future care and case management. The central issues were whether the trial judge might make such an order and, alternatively, whether the requested payment was reasonably necessary under the principles in Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204.

1. Application granted. The claimant was awarded a further interim payment of £100,000.
2. The court applied the approach in Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204. Ordinarily, the likely final judgment should be assessed conservatively by reference to capital losses, while excluding future losses which the trial judge might deal with by periodical payments. A larger assessment may be made only where the court can confidently predict that the trial judge will award a sufficient capital sum and there is a real need for the requested expenditure.
3. A 50 per cent liability split was not an absolute bar to a periodical payments order. However, it created practical difficulties. The likely annual payment on the defendants’ figures was only about £6,250, the claimant strongly preferred a lump sum, and the future care needs were uncertain because of possible alcohol-related relapses and uncertainty about the extent of accident-related care.
4. Those contingencies meant that a periodical payments order would be too rigid and would not provide the flexibility needed to meet substantial and fluctuating future needs. The court was satisfied that the trial judge would not wish to make such an order, whether or not the defendants were liable for the alcohol dependency syndrome.
5. Alternatively, if a periodical payments order remained possible, the court was satisfied to a high degree of confidence that the payment was reasonably necessary. The claimant had substantial current expenditure, an overdraft and outstanding liabilities, and continuation of the support package was considered important to his rehabilitation.
6. The Deputy’s conduct in allowing liabilities to accrue did not disentitle the claimant to the payment. Nevertheless, the court warned that debts incurred by a Deputy must not place a trial judge under pressure to make an order which would otherwise be inappropriate.