The value of interim payments in life changing injury claims

Compensation claims for serious injuries can take years to settle. Often, claimants who have themselves been seriously injured or have been bereaved will need financial assistance before then. Interim payments can be that lifeline an injured person needs whilst waiting for their claim to conclude.

At Anthony Gold we represent people who have suffered life changing injuries, as a result of an incident caused by someone else’s negligent actions. We understand that injuries not only have an impact on physical and mental wellbeing, but they can also cause significant financial difficulties. We aim to get our clients’ lives back on track as soon as possible by arranging early rehabilitation and securing early interim payments to assist with any financial difficulties.

What is an interim payment?

An “interim payment” is the legal term for a payment made by the defendant prior to the conclusion of the claim. It is essentially an advance on the final compensation amount received at the end of a case.

Interim payments are intended to help claimants by providing financial relief so that claimants can start to get their life back on track after their injury without waiting for the case to come to a final resolution. The objective being to put them in the position they would have been in had the incident not occurred, or as close to that as possible.

Receiving an interim payment can also allow a claimant to pursue a claim fully and ultimately obtain the proper compensation they are entitled to for their injuries, rather than feel pressured, due to financial constraints, to accept an early low settlement.

How can interim payments be used?

Interim payments can be used by the claimant for whatever is needed. Every claim is different, and the needs of a claimant will depend on their individual circumstances. Although there is no obligation to explain how the money will be spent, it is more likely that an interim payment request will be successful if it is.

Examples of common uses for interim payments include:-

• Private medical treatment/therapy.

Although this may be available on the NHS, it is often quicker to be treated privately. Alternatively, supplementary private treatment may be needed if NHS treatment is limited or likely to involve long delays. Insurers will often be happy to discuss paying for private treatment if it means that the individual will recover faster.

• Rehabilitation support and equipment.

A seriously injured person may need extensive rehabilitation or special equipment to assist their recovery.

• Care costs.

If an injured person requires assistance with daily tasks, they may need to hire a carer. These costs can be expensive.

• Home adaptations.

If changes to the home are needed (eg. installing ramps or handrails) to make life easier, an interim payment could enable the work to begin sooner.

• Supplement lost earnings.

If the injured person is no longer able to work, an interim payment could help with bills, mortgage repayments and daily living expenses.

Whether you’ve sustained a brain injury and require urgent intensive neurorehabilitation, or have lost a loved one to a fatal injury and are struggling financially as a result, our team of experienced solicitors will be able to review your individual claim and advise you as to whether an interim payment can be made and how this could be spent.

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.

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.

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.

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.

Effect on final compensation

As explained above, interim payments are advance part-payments of the final compensation. They are not made in addition. Instead, when the claim settles, any amount received in interim payments will 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.