EF v Darkwa & Anor

On an interim payment application, the court must make a conservative assessment of the likely final judgment and may order no more than a reasonable proportion of it. The assessment must take account of a sustainable argument that significant past or future losses may not be recoverable, including where the claimant’s care regime is arguably excessive or has failed to mitigate loss. A claimant’s right to seek damages instead of publicly funded care does not necessarily exclude a separate mitigation argument. Where there is a real risk of overpayment and the claimant cannot realistically repay it, the court should refuse a further interim payment.

The claimant suffered severe injuries, including a brain injury, in a road traffic accident. Liability had been compromised at 85% of the full value of the claim, but quantum remained in dispute. After receiving £900,000 in interim payments, he sought a further £275,000 pending a trial listed for March 2020.

The claimant relied on ongoing accommodation, care, case management and rehabilitation needs. The second defendant disputed the necessity and appropriateness of the current care regime, relied on possible failures to mitigate loss, and argued that further payment would risk overpayment. The central issues were the likely value of the final judgment, the proper application of the two-stage approach in Cobham v Eeles, and whether the claimant had established a sufficient need for the payment.

1. Application refused. The court declined to order any further interim payment pending trial.
2. Under Senior Courts Act 1981, s.32 and CPR 25.6, the power to order an interim payment is discretionary. CPR 25.7 requires the conditions for exercising that power to be satisfied. Liability had been admitted for the purposes of CPR 25.7(1)(a).
3. CPR 25.7(4) required the court to assess the likely amount of the final judgment conservatively and to ensure that the payment did not exceed a reasonable proportion of that amount. The objective was to avoid overpayment, while recognising that a reasonable proportion could be high if the assessment was conservative.
4. The court applied the two-stage approach in Cobham v Eeles. Under the first stage, the likely capital judgment was assessed without normally including future losses which might be dealt with by a periodical payments order. The second stage permitted additional future losses to be included only where the court could confidently predict that the trial judge would capitalise them and there was evidence of a real need for the immediate capital sum.
5. The claimant’s case was affected by two substantial and arguable issues. First, Peters v East Midlands SHA did not make it obviously impermissible to consider mitigation where a claimant rejected a specific, appropriate offer of public accommodation or care. Secondly, the defendant’s evidence provided an arguable basis for concluding that the existing care regime had created or prolonged unnecessary dependency and that significant past care and accommodation losses might be reduced. The principle in Loughlin v Singh showed that a reduction could be made where care and case management fell materially below a reasonable standard.
6. The conservative approach was flexible and depended on the facts and issues. The court was entitled to take account of a sustainable argument that the final award might be materially closer to the defendant’s valuation. The claimant therefore failed to establish sufficient need for the payment.
7. Because the proposed payment would fund care and accommodation and could not realistically be recovered if overpaid, the risk would probably have to be addressed by crediting the overpayment against future loss. That reinforced the conclusion that no further payment should be made.

This was a first-instance interim payment application. The claim arose from a road traffic accident, and liability had previously been compromised by acceptance and court approval of a Part 36 offer. Quantum remained for trial.