Mabiriizi v HSBC Insurance (UK) Ltd

An interim payment must represent no more than a reasonable proportion of the likely final judgment. Where a periodical payments order may be made, the court should generally calculate the likely capital award without capitalising future losses, except where accommodation costs are sufficiently certain to be awarded as a lump sum. Additional future losses may be capitalised only where the court can confidently predict that the trial judge will make a larger capital award and there is a real, immediate and reasonable need for the expenditure. The court must also consider whether making the payment would create an unlevel playing field by effectively determining an issue reserved for trial.

The claimant suffered catastrophic brain injuries in a road accident. Primary liability was admitted, subject to an agreed 25 per cent reduction for contributory negligence arising from failure to wear a seatbelt. He lived with his mother in unsuitable accommodation and sought an interim payment of approximately £670,000 to purchase suitable accommodation and meet other future losses.

The application required the court to assess the likely capital award, including whether accommodation and other future losses could be capitalised before trial, while a dispute remained about whether the claimant’s long-term needs should be met at home or in residential care.

1. The application for an interim payment of approximately £670,000 was refused. The court assessed the likely capital award conservatively and applied the approach in Cobham Hire Services Ltd v Eeles [2009] EWCA Civ 204.

2. Under Civil Procedure Rules 1998, Part 25.7, the discretion to order an interim payment is constrained. The payment must not exceed a reasonable proportion of the likely amount of the final judgment. Where a periodical payments order may be made, the notional capitalised value of that order is excluded from the calculation.

3. The court should normally stop at general damages, special damages, interest and any accommodation award which can confidently be predicted to be made as a lump sum. The assessment must be conservative, but that does not require acceptance of the defendant’s figures.

4. Accommodation costs were excluded. Although the existing home was unsuitable, the trial judge would have to decide whether the claimant should live in adapted accommodation or residential care. Providing funds to purchase a home would effectively determine that issue in advance and create an unlevel playing field. The defendant’s residential-care argument was not plainly wrong, and the court lacked the requisite degree of confidence to include the accommodation costs.

5. Capitalising other future losses was also inappropriate. Even if those losses were capitalised, the resulting sum would not achieve the purpose for which the payment was sought and would risk tying the hands of the trial judge.

6. After allowing £150,000 for pain, suffering and loss of amenity, interest, past losses and associated costs, and applying the agreed deductions, the likely capital award for the relevant purpose was approximately £130,312.50. After credit for the £30,000 already paid, about £100,312.50 could have been justified, but that was not the sum sought. The parties were encouraged to progress the claim to trial promptly and to consider suitable voluntary interim arrangements.