England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		23 April 2015

His Honour Judge Robinson:

1. By this application the Claimant, who is of full age and capacity, seeks a further interim payment on account of damages. She has been represented by Mr Matthew Phillips. Mr David Heaton QC has appeared for the Defendant.
2. The Claimant was born on 23 April 1990. She suffered extremely serious injuries on 24 April 2012 when she was thrown from the motorcycle she was riding as a pillion passenger. Liability was not in dispute and judgment with damages to be assessed was entered on 31 July 2013.
3. Unless the case settles, damages will be assessed at a trial due to start in January 2016 with a time estimate of 7 days. The most serious injury sustained by the Claimant was a spinal cord injury resulting in paraplegia classified by the American Spinal Injury Association as T6 A complete. The Claimant's cognitive functions are certainly largely intact, although very recently epilepsy has been diagnosed. It is too early to say if this is accident-related. The Claimant is able to mobilise with a wheelchair and has some upper limb mobility. On any view this is a very substantial claim. At trial the judge will certainly wish to consider if at least some heads of future loss should be dealt with by way of an order for periodical payments. The Claimant wishes at least some heads of future loss to be dealt with in this way.
4. There have been previous interim payments. The total amount paid to the Claimant, including a sum of £75,000 due to be paid imminently, is £970,000. In addition, the Defendant has re-paid to the CRU benefits paid to the Claimant totalling £32,367.99. By the time of trial, the amount due to the CRU will have risen to £41,763.09. Thus the total amount, for which credit will have to be given at trial, is £1,011,763.09.
5. By Application Notice dated 6 February 2015 (sealed on 12 February 2015) the Claimant seeks a further payment of £700,000 to fund the purchase of a suitable property and perform works of adaptation. Mr Phillips opened this application by saying he sought a total of £500,000 which included the £75,000 due to be paid imminently. Thus the net amount sought is £425,000.
6. Applications such as this one fall to be determined in accordance with CPR Part 25.6 and 25.7 and also in accordance with the guidance provided by the Court of Appeal in Cobham Hire Services Limited v Benjamin Eeles [2009] EWCA 204.
7. The starting point is CPR Part 25.7(4): "the court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment".
8. The Eeles case is widely regarded as comprising two stages. Under the first stage, dealt with by Smith LJ in paragraph 43 of her judgment, the judge must assess the likely amount of the final judgment leaving out of account the heads of future loss which the trial judge might wish to deal with by way of PPO. The allowable heads of loss may comprise:

General damages for pain suffering and loss of amenity;

Special damages to date;

Interest on those heads;

Capitalised accommodation costs, including future running costs.

9. The assessment should be carried out on a conservative basis. Provided that is done, a reasonable proportion may be a high proportion. Proportions as high as 90% have been awarded in the past.
10. Where, however, the interim payment requested exceeds a reasonable proportion of the likely award thus assessed, recourse may be had to the second stage of Eeles. Under this stage, the judge may include in the assessment of the likely amount of a final judgment the capitalised amounts of future losses. However, he can only do this if he "can confidently predict that the trial judge will wish to award a larger capital sum that that covered by" the items falling within the first stage of Eeles – see paragraph 45 of the judgment of Smith LJ.
11. Furthermore, the judge must be satisfied by evidence that there is a real need for the interim payment requested. As Smith LJ pointed out (see para 45):

"For example, where the request is for money to buy a house, he must be satisfied that there is a real need for accommodation now as opposed to after the trial and that the amount of money requested is reasonable. He does not need to decide whether the particular house proposed is suitable, that is a matter for the Court of Protection, but the judge must not make an interim payment order without first deciding whether the expenditure of approximately the amount of money he proposes to award is reasonably necessary. If the judge is satisfied of that to a high degree of confidence then he will be justified in predicting that the trial judge would take that course and he will be justified in assessing the likely amount of the final award at such a level as will permit the making of the necessary interim award" (emphasis added).

12. In this application it is common ground that an interim payment of £425,000 cannot be made without recourse to the second stage of Eeles.
13. The current accommodation position can be shortly stated. Before the accident, the Claimant was living with her fiancé in private rented accommodation. Regrettably that relationship has since broken down. Following treatment and rehabilitation she returned to her parent's house at [ an address] in July 2012. That house was not suitable for her needs. She began by living in what Mr Maxwell (solicitor for the Claimant) describes in his witness statement in support of this application as "a makeshift bedroom converted from the family dining room". A scheme of adaptation was devised. Works were performed between January and March 2013, during which time the Claimant and her parents lived in rented accommodation.
14. The anticipated costs of the scheme of adaptation, as first devised, was around £113,000. In the event a more extensive scheme of works was devised. The final overall cost, including fees, was £279,735.
15. Thus the present position is that the Claimant is living with her parents in their house which has been adapted for her current needs.
16. This application arises because the Claimant has seen a property in the nearby village of Thurnscoe. The full address is [an address]. It is described by Mr Maxwell as "a part constructed dormer bungalow, having external walls, internal flooring, a second story and roof. It has not been fully fitted out and the Claimant and her advisors will have a 'blank canvas' when considering appropriate alterations for the property".
17. The Claimant learned of this property in January 2014 and visited it on 3 March 2014.
18. On 19 May 2014 the Claimant's father put in an offer to buy the property for £252,000, which offer was accepted, on 21 May 2014. I assume that both offer and acceptance are on the usual "subject to contract" basis. On 29 July 2014 Mr Maxwell says he wrote to the Defendant's solicitor asking for an interim payment of £710,000. Mr Maxwell also refers to alternative requests for a sum of £300,000 to allow the property in its current state to be purchased. The Claimant is fearful that unless she moves promptly, the vendors will take steps to market the property elsewhere. Whether they are in reality likely to do so is something which Mr Heaton doubts, for reasons he advanced in argument, but it is not something I am really in a position to assess. What is clear from the Claimant's most recent witness statement dated 5 March 2015 is that the Claimant has become extremely emotionally attached to the notion of buying [an address]t – see paragraphs 256 to 273 of her statement.
19. I propose at this stage to consider the figures. I have been very much assisted by an extremely helpful schedule titled "Valuation Table" prepared by Mr Phillips. In it he sets out the various heads of loss relevant for the purposes of Eeles stage one. He gives the rival figures taken from the Claimant's schedule of loss and the Defendant's counter schedule. Then, in a column headed "Conservative Valuation" he gives his proposed figure to be used for the purposes of assessing the likely value of the sum to be awarded by way of lump sum at trial. In the final column headed "Comment" he explains how he has arrived at his conservative valuation figure. He submits that I can safely work on the assumption that the figures he proposes will not be more than the trial judge will award. In the main, he has arrived at his conservative valuation figures by splitting the difference between those proposed by the parties on the basis of 2:1 in favour of the Defendant.
20. With the exception of the proposed conservative valuation for damages for pain suffering and loss of amenity which, for present purposes only, Mr Heaton concedes in the sum of £200,000, Mr Heaton takes issue with the approach proposed. He submits that it is unsafe in an application such as this for the interim payment judge to work on anything other than the figures in the counter schedule. Mr Phillips responds that interim payment judges frequently form their own assessment of the relevant figures.
21. In an application for an interim payment where the only figures available are those provided by the Claimant, the interim payment judge will indeed have to form an assessment of conservative valuation based upon whatever material there is available. In this case there is a fully reasoned counter schedule prepared by Leading Counsel with vast experience of this type of work. There is simply not the opportunity for the interim judge to make a reasoned assessment of the strength or otherwise of the rival contentions. Nor, in my judgment is it, in general, appropriate to do so. That is the task of the trial judge who will hear the evidence.
22. That said, it is right to observe that, just as it is the rare case indeed that the Claimant in a case such as this succeeds in recovering every penny claimed, so is it the rare case that, absent gross exaggeration or deceit, every argument deployed by the Defendant succeeds. I should make it clear that there is no suggestion of such adverse factors in this case.
23. I think there is force in the submission of Mr Heaton, but I think I can sensibly round up the figures provided by the Defendant to the nearest £500. Thus, following the format of the table prepared by Mr Phillips, I will work on the basis of the following figures.

Head of Loss	Claim	Counter Schedule	Cons Value	Judge
PSLA	250,000	190,000	200,000	200,000
Past Earnings	39,909	36,434	37,581	36,500
Past Care etc	463,629	366,121	391,906	366,500
Past Aids etc	31,882	30,936	31,248	31,000
Past Household costs	36,828	6,379	9,306	6,500
Past Medical costs	109,295	100,835	103,627	101,000
Past Accommodation	707,819	47,570	113,000	48,000
Future Accommodation	439,643	448,445	475,507	448,500
Past Travel & Transport	50,015	18,231	25,000	18,500
Past Holidays	21,817	4,231	5,000	4,500
Interest on PSLA damages			11,400	11,400
Total				1,272,400

24. In relation to past accommodation costs, there is a clear argument concerning the nature and extent of the works proposed by the Claimant's accommodation expert. Given that the works, even as originally devised, were intended only to be a short term solution to the accommodation problem, there is certainly a prospect that the trial judge will be attracted to the argument of the Defendant's accommodation expert that works involving extending the conservatory and adding what in effect was an annex to the garage were not reasonable. Thus I have used the figure proposed by the Defendant, rounded up to the nearest £500.
25. In relation to future accommodation costs I have again used the Defendant's figures, rounded up, acknowledging that the Defendant's expert appears to have altered a view he has held in the past. That is classically a matter to be explored in cross examination at trial.
26. Given the concession (for these purposes only) on damages for pain suffering and loss of amenity, it follows that the figure for interest is also agreed in the sum shown.
27. If one were to take 90% of £1,272,400, one gets £1,145,160. From that must be deducted the sum of £1,011,764 to leave £133,396 available to be awarded under Eeles stage one. This is not enough to permit purchase of [an address] even in its present state of construction. Thus I move to consider the second stage of Eeles.
28. The function of the judge hearing an application for interim payments such as this, is not to usurp the function, nor to fetter the discretion, of the trial judge, save in the limited circumstances identified in Eeles. To adopt the language of Smith LJ from paragraph 45 of her judgment, the interim payment judge must not make an order which will mean that future heads of loss will have to be capitalised "without first deciding whether the expenditure of approximately the amount of money which he proposes to award is reasonably necessary". Only if the judge is satisfied of that matter to a "high degree of confidence" can the interim payment judge be justified in "predicting" that the trial judge will also take that course.
29. The compelling problem for the Claimant in this application is that it is manifestly obvious that there is, as is submitted by Mr Heaton, no immediate "reasonable necessity" for the Claimant to purchase another property before the trial in January 2016. Of course the Claimant wishes to commence living independently of her parents and in her own property. It is plainly in her best interests to set about that as soon as possible. Even if completion of the property and adaptations were not completed by the time of trial, the Claimant would still be able to move into the house 9 months earlier than if she has to wait for the trial judge to determine the amount of damages to be awarded. It is also worth repeating the fact that the Claimant has become extremely emotionally attached to the notion of buying and adapting this particular property. I take account of the submission that suitable properties are in scarce supply in the area where the Claimant wishes to live.
30. However, the fact is that at present she is adequately accommodated in a house that has been adapted to cater for her needs at a cost of over £279,000 as recently as March 2013, just 13 months ago. The trial is now just 9 months away. There is clearly an emotional pull in favour of [an address] which any judge reading paragraphs 256 to 273 of the Claimant's most recent statement must feel. This grievously injured Claimant deserves to be allowed to get on with her much altered life as soon as possible. However, I am driven to conclude that there is no reasonable necessity for the Claimant to spend any money at all in respect of alternative accommodation before the conclusion of the trial of this matter.
31. In any event, this is not a case where I feel I can "confidently predict" that the trial judge will necessarily wish to capitalise heads of future loss other than care and case management. The Claimant is a young woman with a normal or near normal life expectancy. She was in work at the time of the accident. Capitalising loss of future earnings and other recurring future losses may be the decision that the trial judge ultimately reaches, but I am by no means confident of that, and I am certainly not satisfied to a high degree of confidence.
32. Thus it seems to me that I can properly direct payment of an interim payment of £133,000 under the Eeles stage one principle. This is in addition to the £75,000 shortly to be received in any event. However, Mr Heaton submits that I should not even do that if to do so may enable the Claimant to buy the property at [an address]. It is clear that, from the perspective of the Defendant, whether it is appropriate that this property be bought and adapted for the Claimant's use is highly controversial. In such a case Mr Heaton submits that if the Claimant did manage to buy [an address], the Defendant would not be playing on a level playing field at trial. It is common ground that the Claimant requires a capital sum sufficient to buy and adapt a property. The amount of money required to achieve that result is the subject of substantial dispute. Mr Heaton submits that the reality is that the trial judge would be faced with a de facto situation which the trial judge would feel obliged to sanction and thus factor in to the conclusion concerning what sum was reasonably required to provide for the Claimant's reasonable needs. Mr Heaton says that the trial judge should feel free to approach this issue unfettered by having to deal with what has actually occurred.
33. The general rule is that in respect of an interim payment assessed by reference only to stage one of Eeles the court is not concerned with what the Claimant does with the money. However, I am prepared to accept that even within the confines of stage one of Eeles the interim payment judge can take into account the level playing field argument. It is more typically brought into play where the Claimant proposes to use the interim payment to effect a fundamental change in the existing care or accommodation regime.
34. Thus, for example, in Campbell v Mylchreest [1999] PIQR Q17 the Court of Appeal upheld a decision of Blofeld J directing payment of £100,000 to the Plaintiff out of monies in court. The Plaintiff was then currently being cared for in a long term NHS unit for severely disabled people. It was proposed to use the money to enable the Plaintiff to move out of that unit and live with his parents. The appropriate accommodation and care regime was a hotly contested issue. The Court of Appeal held that what was described as the level playing field factor was to be taken into account when deciding whether to make an interim payment, but in that case held that the payment was justified and that the trial judge would still be able to determine the issue of appropriate care regime dispassionately.
35. There is no doubt that the Claimant will, if she can, buy the property in advance of the trial. If that will result in the creation of an unlevel playing field, I am prepared to accept that the Court has discretion not to direct an Eeles stage one payment.
36. I accept that it is just possible that the Claimant might be able to buy [an address]. If I direct payment of £133,000 and she shortly receives £75,000, she will have £208,000. Although that is £54,000 short of the purchase price, it is possible she can arrange finance or negotiate a deferment of the payment of the balance of the purchase price until January 2016. Of course, this leaves out of account any associated costs of purchase and leaves open the question how the Claimant will fund her care regime until trial if she utilises some or all of the soon to be received £75,000. However, it is possible she might buy the property. If she did, would that result in an unlevel playing field? In this instance I am confident that the answer is "no". If the Claimant bought the property, she knows she is doing so in the teeth of fierce opposition by the Defendant on the issue whether this is an appropriate property. There will be no scope to argue that she bought the property in ignorance of any dispute on that issue. However, the reality is that, if the Claimant does buy the property, she will not be in a position to do anything to it before trial. There will be no money. Thus if the trial judge concludes that the property is unsuitable, the Claimant will simply have to sell it in exactly the same state as when she bought it. There may well be wasted expenditure in the form of costs of purchase and sale which the Claimant will have to bear herself, but in the context of the value of the claim as whole, they will surely be considered insignificant.
37. Thus I conclude that I should direct the payment of a further interim payment in the sum of £133,000.
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