Interim payments

Interim Payments

Interim payments are sums of money that a defendant may be ordered to pay to a claimant before the final determination of the case. This mechanism is used to provide the claimant with access to funds during the litigation process, typically when there is a strong case for compensation and a clear need for immediate financial support. The rules governing interim payments are set out in Part 25 of the Civil Procedure Rules (CPR) in England and Wales.

Purpose of Interim Payments

The primary purposes of interim payments are:

• ★ Financial Relief: To provide the claimant with immediate financial relief, particularly in cases where they have suffered a loss and require funds for medical treatment, living expenses, or other essential needs.
• ★ Avoid Hardship: To prevent hardship to the claimant while awaiting the final resolution of the case, especially in situations where the claimant is unable to work or has incurred significant expenses as a result of the defendant's actions.
• ★ Encourage Settlement: Interim payments can also serve to encourage settlement discussions by providing a basis for negotiating the final amount of damages.

Criteria for Interim Payments

To grant an interim payment, the court must be satisfied that certain criteria are met:

• ★ Admitted Liability or Strong Case: There must be an admission of liability by the defendant or, alternatively, the claimant must show that they have a strong case with a high likelihood of success at trial.
• ★ Amount Due: The court must be persuaded that if the case went to trial, the claimant would receive a judgment for a substantial sum, likely to be at least as much as the interim payment sought.
• ★ Funds Held by Defendant: In some cases, it may be relevant whether the defendant holds funds or assets that can be used to make the interim payment.

Procedure for Applying for Interim Payments

The procedure for seeking an interim payment includes the following steps:

• ★ Application Notice: The claimant must file an application notice (Form N244) with the court, specifying the amount sought and the grounds for the application.
• ★ Supporting Evidence: The application must be accompanied by evidence, such as medical reports, loss of earnings calculations, and other documents demonstrating the claimant's need for the payment and the likely success of the claim.
• ★ Service: The application notice and supporting evidence must be served on the defendant, providing them with an opportunity to respond and contest the application.
• ★ Hearing: A court hearing will usually be held to consider the application, during which both parties can present their arguments and evidence.

Court's Consideration

The court will consider several factors when deciding whether to grant an interim payment, including:

• ★ Strength of the Claim: The court assesses the merits of the claimant's case and the likelihood of a successful outcome at trial.
• ★ Financial Need: The claimant's immediate financial needs and the potential hardship they may face without an interim payment.
• ★ Amount of Payment: The court determines the appropriate amount of the interim payment, ensuring it does not exceed what the claimant would likely recover at trial.
• ★ Security for the Payment: The defendant's ability to pay the interim amount and any implications for the defendant's financial position.

Possible Outcomes

The court may decide to:

• ★ Grant the Interim Payment: The court may order the defendant to pay a specified sum to the claimant, either in one lump sum or in instalments.
• ★ Refuse the Application: If the court is not satisfied with the criteria, it may refuse the application for an interim payment.
• ★ Vary the Amount: The court may grant an interim payment but for a different amount than requested, based on its assessment of the appropriate level of compensation.

Conclusion

Interim payments are a critical tool in civil litigation, providing claimants with necessary financial support while their case is pending. The procedure ensures that claimants are not unduly disadvantaged while waiting for a final judgment, especially when they face immediate financial pressures. The application for an interim payment must be well-supported by evidence and demonstrate a clear need, as well as a strong likelihood of eventual success. The court's role is to balance the needs of the claimant with the rights of the defendant, ensuring that any payment ordered is fair and justified.