How to obtain interim payments in personal injury and medical negligence claims

Interim payments can provide vital financial support when someone has been seriously injured and cannot wait for their claim to settle. Understanding how these payments are secured, whether by agreement or through a court application, is crucial for anyone navigating a personal injury or medical negligence claim.  

In this blog, we explain the legal routes available, the evidence required, and how the courts approach interim payment requests. 

If you have not yet read our overview of what interim payments are and how they can be used, you may find our previous article helpful. It explains the purpose of interim payments and the types of costs they can cover. 

How can interim payments be obtained?

There are two ways in which you can obtain interim payments. 

1. By agreement 

The usual way in which interim payments are obtained is by making a request to the defendant or their insurers. These requests can be made at any point during the claims process, including before the case is issued at court. Where it is obvious that a client will require an early interim payment (such as the example given above of a self-employed claimant not being paid whilst they are unable to work), we can and will ask for an interim payment right from the outset in our letter of claim to the Defendant.  

Whilst there is no obligation on the defendant to agree an interim payment, they will often do so where they have already admitted fault in full or part of the claim, or where they believe it likely that they will eventually do so.

2. By applying to the court 

If the defendant refuses to make an interim payment, an application can be made to the court to order the defendant to do so. However, an application may only be made to the court if the claim has already been issued and proceedings served on the defendant. 

Before ordering that an interim payment be made, the court will need to be satisfied that one of the following conditions has been met: 

• the defendant has admitted liability for the injuries and payment of damages; 

• a judgment has been obtained against the other side for damages to be assessed; 

• the court is satisfied that the claim would be successful if it went to trial, and that a substantial amount of money would be awarded; 

• in cases where there are multiple defendants, the court must be satisfied that (a) a substantial amount of money would be awarded from at least one of the defendants (even is not known which one will be liable) and (b) all the defendants are public bodies or have insurance cover which will satisfy the claim. 

How much will an interim payment be?

Interim payment amounts are decided based on the overall likely compensation and must not be more than a “reasonable proportion” of the overall amount. They are therefore assessed on a case-by-case basis and will depend on the injured person’s situation and the seriousness of the injuries. Injury related expenditure to date and anticipated expenditure until trial will be taken into consideration. 

In a case whereby a claimant is not being paid whilst unable to work, production of payslips, bank statements or any other evidence to show what they were earning prior to the accident will support an informal request or formal application for an interim payment. If the documentary evidence provided supports a loss of a certain amount over a certain period of time, this should suffice in determining the amount of the interim payment required to cover a loss of earnings over a set period of time.   

If needed, multiple requests for interim payments (whether to the defendant or to the court) can be made, although the total of these must not be more than the reasonable proportion of the likely final compensation. It is vital to keep in mind, however, that the claimant must give credit for the total sum released throughout the lifetime of the claim in interim payments, as they will already have had the benefit of those funds (see below).  

Again, all expenditure reasonably incurred because of the injuries can be claimed as damages and taken into account when considering interim payment requests, so it is important to keep a record of how the money has been spent and retain documentary evidence of this. The more that can be proven with documentary evidence, the better chance the claimant will have of recovering those sums.  

Effect on final compensation

As explained above, interim payments are advance part-payments of the final award of compensation. They are not made in addition. As such, when the claim settles, any amounts received in interim payments will have to be considered when calculating the final amount due. For example, if the claim settles for £300,000 and throughout the claim there have been three interim payments of £10,000 each, the final settlement amount received will be £270,000. 

It is also worth noting that all compensation is tax-free, including interim payments. 

Interim payments and benefits

Interim payments may affect eligibility for benefits, and the rules on this are complicated and depend on the type of benefits, the amount of the interim payment and the date on which the first interim payment was received. We always signpost our clients to advice in this area if required. 

If the compensation is placed in a personal injury trust, then eligibility for benefits will not be affected. 

Conclusion

It is important to remember that although the ultimate outcome of an injury claim is a financial payment, the aim is for the injured person to regain, as far as possible, their independence and be restored to the position they would have been if they had not suffered their injuries. Interim payments can help to achieve this aim sooner rather than later. Further, it can be more beneficial to receive compensation in this way rather than as one big lump sum. Many of our clients depend on the help an interim payment can give as they can spread their compensation out and cover costs when most needed.