Plexus successfully resisted an application for a substantial interim payment. The Court accepted the Defendant can still raise mitigation arguments where the Claimant has rejected statutory funding. Paul Phillips who acted for the Defendant looks at the implications of the case.
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Plexus represented the MIB (Second Defendant) on an application by the Claimant for a further interim payment. The Claimant, a man in his forties, suffered multiple injuries including a brain injury as a result of a road traffic accident in January 2014 when crossing the road at a pedestrian crossing. He was cared for by the NHS initially in intensive care in hospital before being transferred to a rehabilitation facility and most latterly to a residential care home. During this time, he made what most experts treating him described as a “remarkable” recovery such that he regained the ability to walk, albeit slowly with aids and for short periods, to effectively communicate and a considerable degree of independence. His recovery was such that his appointed case manager and those responsible for his welfare at the care home, when NHS funding finally came to an end in September 2016 opined that, once he had settled into independent living, the 24 hours care regime, particularly in terms of overnight care could gradually be withdrawn (although he would still need some care). The Claimant was offered local authority funded two bedroomed accommodation and direct payments to provide the few hours of support work required, all of which was turned down in favour of privately funded accommodation with 24 hours support provided initially by an agency, but more latterly by a team of privately recruited support workers.
The Claimant immediately sought interim funding and whilst the Second Defendant provided funds on a general basis, it did so having stated on unequivocal terms that it considered the care regime unreasonable and unsupported by those who had initially treated him; and that it would be challenged at final assessment. It was also pointed out to the Claimant that contributory negligence was still a major issue and that the Claimant was likely to find himself funding part of the care package in any event.
With the benefit of interim funding, the care and support regime nonetheless continued to run at a rate fluctuating between circa £35,000 to £33,300 per month.
In late 2018, the court approved a liability settlement in the proportion 85:15 in the Claimant’s favour. Although the Claimant had by this stage already received £675,000 in interim payments, he indicated that he needed a further substantial payment to fund the rehabilitation regime going forward. He promptly made an application for a further interim payment of £500,000.
Shortly before the hearing of the application the Second Defendant agreed to make a further interim payment of £225,000. The balance of the application was adjourned to a future hearing following the exchange of the parties’ medical and non-medical expert evidence.
Reports served by the Claimant broadly supported the ongoing rehabilitation regime. The experts instructed by the Second Defendant however considered the regime to be excessive “resulting in an extended period of unnecessary dependency…(and that the Claimant had) missed out on the positive benefits of greater levels of independence and self-determination.” It was suggested that “…(the Claimant’s) present team seem more concerned with potential risks, and less concerned with positive risk taking in order to improve his quality of life…”
The adjourned application was relisted for 25 March 2019. The Second Defendant indicated that no further funding was on offer and expressed the view that the Claimant had exhausted his entitlement to interim payments; and that had a more reasonable care regime been put in place, the interim payments paid already would have been sufficient to last through to trial.
In his judgment, the Master drew reference to CPR 25.7(4), which contains two important limits:
- The court must have regard to what is “likely” to be the final judgment; and
- An interim payment may not be more than a “reasonable proportion” of that likely final judgment.
Whilst “reasonable proportion” is not further elaborated in the rules, the Master cited the judgment of Smith LJ in Cobham Hire v Eeles  EWCA Civ 204 where the judge said that it “..may well be a high proportion provided the assessment has been a conservative one. The objective is not to keep the Claimant out of his money, but to avoid the risk of overpayment.”
The Master then went on to consider how the “likely” final judgment is to be assessed with reference to the two stages principle as set out in Eeles; and that under “Eeles I”, this would include special damages to date, general damages and accommodation costs, but leaving out of account the heads of future loss which the trial judge might wish to deal with by way of a Periodical Payments Order (“PPO”).
Under “Eeles II” however, the Master noted there are circumstances in which the court will be entitled to include in the assessment additional elements of future loss when it can confidently predict that the trial judge will wish to award a larger capital sum than that covered under “Eeles 1”; but that as a rule, the court should stop at a figure, which it is satisfied is likely to be awarded as a capital sum. The degree of confidence required to predict that the trial judge will capitalise additional elements of future loss so as to produce a greater sum must be high.
Citing the judgment of LJ Smith in Eeles, the Master noted that “Before taking such a course, the judge must be satisfied by evidence that there is a real need for the interim payment requested.”
Against this background the Master invited the parties’ counsel to each prepare a tabulated summary of their respective valuations of the “likely” final judgment under “Eeles 1”. Claimant’s counsel submitted that even on a conservative basis, the Claimant was likely to recover a lump sum substantially higher than the level of interim payments already made. However, counsel for the Second Defendant maintained that a further interim payment would result in an overpayment or something so close to its maximum valuation as to be negligible and hence in excess of a reasonable proportion, based on the Second Defendant’s “conservative” basis assessment.
The Second Defendant also maintained that the Claimant had failed to mitigate his loss by not accepting the accommodation and statutory funding offered by the Local Authority; and had he accepted it, the benefit could have been over £68,000 by the date of trial.
In terms of the deduction to reflect the inappropriate care regime, the Second Defendant relied on Loughlin v Singh  EWHC 1641 where the court reduced a Claimant’s past care regime by 20% and in the case at hand submitted that the appropriate reduction here would be at least 25% to reflect the value of night care unnecessarily provided.
The Master gave some consideration to whether the conservative approach should apply to the Claimant’s or the Defendant’s valuation, but stated that this would depend on the facts and issues of a particular case and that the court should have regard to whether there is a sustainable argument that not all aspects of loss should be recoverable. The question is whether the award at trial may well be sufficiently closer to the Defendant’s figures as to result in either overpayment or something uncomfortably beyond a “reasonable proportion”.
The Master also considered the Second Defendant’s mitigation argument both important and arguable. Whilst acknowledging that the Peters principle was well established that a tortfeasor cannot displace a loss if the victim chose not to apply for publicly funded assistance, he drew a distinction between a case where the Claimant had simply not applied for assistance with one where he had rejected a specific offer in circumstances where it would be unreasonable to do so; particularly in a case such as this where 15% of his damages were irrecoverable from the Defendant. Mention was made of the judgment of Lord Dyson in Peters where he stated: “There is much to be said for the view that it is reasonable for a claimant to prefer self-funding….rather than provision at the public expense… In other words, it is not open to a defendant to say that a claimant who does not wish to rely on the State cannot recover damages because he or she has acted unreasonably….We heard no argument on this approach to the mitigation issue and we express no concluded view about it”.
Consequently, the Master considered the mitigation point to be entirely arguable and one that he could take account of when assessing what realistic minimum value the claim has.
Following his review of the evidence the Master was satisfied that the Second Defendant’s medical evidence presented a very different and equally plausible contrary case to that of the Claimant’s evidence and that he could not disregard that and yield to an implied threat, even if wholly unintended, that the denial of further funding could result in dire consequences for the Claimant, and that he would run out of funds to support his care needs through to trial. The Master thus found that the Second Defendant had an arguable and fundamental point that the current care regime was open to question and that there was a real risk that the Claimant’s past losses for care an accommodation stand to be reduced by significant margins.
In the light of the above, the Master was thus not satisfied as to need for the purposes of the application.
The Master then went onto consider the consequences of overpayment by way of interim payment at this stage and that it would presumably have to be reflected as a credit against the Claimant’s future loss award and could potentially impact on the adequacy of it in terms of the funds available to support the Claimant in the future.
In conclusion, the Master was not persuaded that it would be appropriate to make a further interim payment pending trial and refused the Claimant’s application.
This case provides not only a useful recap of the principles set out in Eeles, but also emphasises that even in circumstances where a care regime is firmly established the court will not necessarily be satisfied as to the reasonableness of it; and that the award in respect of it may stand to be significantly reduced on final reckoning.
Furthermore, the decision potentially reopens the state funding argument in partial recovery cases the court may entertain an argument that the Claimant has failed to mitigate his loss in refusing state funding over private funding. It will be interesting to see how that develops and any further decisions on the point are eagerly awaited. Those advising Claimants will have to think carefully if they refuse an offer by the Defendant for a funding expert if they are not going to recover 100 per cent of their damages.
If you would like to know more about this matter, please speak to your contact at Plexus:
Paul Phillips, Partner
T: 020 7469 6258 | M: 07989 196 490 | E: firstname.lastname@example.org