LAT v East Somerset NHS Trust (Now Yeovil District Hospital NHS Foundation Trust)

On an application for an interim payment where judgment has been entered for damages to be assessed, the court must not order more than a reasonable proportion of the likely final judgment under CPR 25.7(4). Where future losses may be met by a periodical payments order, the likely judgment is assessed by reference to the capital sum likely to be awarded, not the capitalised value of those periodical payments.

The assessment must be conservative. The court should first include heads of loss which will probably be awarded as capital, including general damages, past losses, interest and ordinarily accommodation costs. Future-loss elements may be included only where there is a high degree of confidence that they will be awarded as capital and there is a real need for payment before trial. The court must avoid creating an unlevel playing field or fettering the trial judge’s discretion.

The claimant, a child with serious neurological injuries caused by the defendant’s admitted negligence during the neonatal period, applied under CPR 25.7 for a further interim payment of £1.75 million. Judgment had already been entered for damages to be assessed, and £250,000 had previously been paid.

The assessment of damages was deferred because the claimant’s future care needs depended significantly on the development of behavioural problems. The defendant did not oppose a further payment but limited its offer to £1 million. The central issue was the reasonable proportion of the likely capital judgment which could safely be paid before final assessment.

1. Applicable approach. CPR 25.7(4) imposed a ceiling of no more than a reasonable proportion of the likely final judgment. Applying the principles in Eeles v Cobham Hire Services Ltd [2010] 1 WLR 409, the court assessed the likely capital award conservatively. It did not treat the capitalised value of possible periodical payments as part of the likely final judgment.
2. Eeles Stage 1. The court included general damages, past losses to the predicted trial date, interest and accommodation costs. Accommodation costs were properly included because there was a high degree of confidence that they would be awarded as a capital sum. The court adopted a conservative figure for each head rather than applying a blanket percentage reduction.
3. Eeles Stage 2. Future loss of earnings and other future losses could be included only if there was a high degree of confidence that the trial judge would award them as capital and there was a real need for payment in advance of trial. Neither condition was satisfied. The court therefore excluded those future-loss elements.
4. Accommodation. The claimant could reasonably purchase and adapt a suitable permanent home immediately. There was no precedent requiring a severely injured claimant to rent instead. The court applied the approach in Roberts v Johnstone [1989] QB 878, making the relevant credits and adopting a conservative valuation.
5. The likely capital award was assessed at £1,656,195. After taking account of the £250,000 already paid, a further payment of £1.1 million represented approximately 81% of that estimate and would not fetter the trial judge’s discretion or create an unlevel playing field. The application for £1.75 million was refused, but a further interim payment of £1.1 million was ordered.