What Are Interim Payments?

mariam-abu-hussein
Mariam Abu HusseinLegal Assessment Specialist @ Lawhive
Updated on 20th December 2023

If you’re thinking about seeking compensation for a personal injury, you might have heard about “interim payments” but not been sure what it means.

interim-payments

In this article, we’ll help you understand what interim payments are, how you can get them in the course of a personal injury claim, and how they may be able to make things a bit easier for you financially during your claim.

What is an interim payment?

An interim payment is a sum of money given upfront to someone making a personal injury claim to cover urgent needs while waiting for a final decision. 

Interim payments are taken from the total compensation amount the claimant will eventually get for their claim. These payments are more common in complicated cases involving significant damages, like severe injuries or medical negligence, where the outcome is still uncertain. 

What is the purpose of an interim payment? 

An interim payment is intended to help the claimant with immediate needs while the case is ongoing. This could include things like medical treatment, care, lost earnings, or any necessary adaptations required for daily living. 

In some cases, it can take a long time - sometimes years - for a case to be settled. Interim payments offer financial support, making sure the claimant can cover important expenses during this time. Interim payments can allow someone to fully pursue a personal injury claim without feeling pressured to settle for less compensation than they deserve due to financial hardship.

When can interim payments be requested?

In the course of a personal injury claim, if the defendant admits responsibility for the injury, it may be possible to arrange for an interim payment to be made. 

Alternatively, after legal proceedings have started (but not before the deadline for filing an Acknowledgment of Service), an application can be submitted to the court to request an interim payment. 

Claimants can make multiple applications for interim payments, and there are no restrictions on the number of applications or payments that can be made.

Voluntary interim payments concerning a child or protected party require the court's approval before being made. 

When will the court make an order for an interim payment? 

For the court to make an order for an interim payment, any of the following conditions should be met: 

  • The defendant has admitted they’re responsible for paying damages;

  • The claimant has secured a judgment against the defendant, and the extent of the damage is yet to be determined; 

  • The court is convinced that, if the case were to go to trial, the claimant would likely win a significant amount of money from the defendant; 

  • In the case of multiple defendants, the court is satisfied that the claimant would likely win a significant amount against at least one of them, even if it’s unclear which one. (Note: This is applicable as long as all defendants are insured or represented by a public body). 

How do you apply for an interim payment? 

To make an application for an interim payment, the claimant has to provide supporting evidence showing: 

  1. The amount of money requested for the interim payment; 

  2. The specific items or matters for which the interim payment is requested; 

  3. The anticipated final judgment amount; 

  4. The reasons supporting the belief that the conditions for an interim payment have been met;

  5. Details of special damages and past and future losses (for personal injury claims); 

  6. Details of the person(s) on whose behalf the claim is made and the nature of the claim (for Fatal Accident claims). 

Claimants may be required to provide documentation to support their application, including medical reports in the course of a personal injury claim. 

How do interim payments impact the final compensation amount?

Interim payments are upfront partial payments of the eventual compensation amount. This means they are not additional payments. Rather, they are considered part of the final compensation.

When the final compensation amount is determined, any interim payments already made will be subtracted from the overall figure. 

For example, if your final settlement is £170,000 and you took interim payments of £15,000, your final settlement fee will be £155,000.

Like all personal injury compensation, interim payments are tax-free. 

How much could I receive as an interim payment?

There used to be a common belief that a claimant could request almost any amount from the total compensation they would eventually receive as an interim payment. However, this approach has been revised in recent years, particularly regarding the amount of interim payments in personal injury claims. 

In deciding the amount of an interim payment, the judge will evaluate the probable amount of the final judgment, considering only general and special damages up to the application date. They then decide on a ‘reasonable proportion’ of that likely final amount, balancing the risk of overpayment with the entitlement of the claimant. The judge does not, at this stage, consider what the claimant plans to do with the money. Providing they are of full age and capacity, they are free to use it as they wish. 

However, the judge can include in their assessment of the likely final amount additional elements of future loss, particularly those that the trial judge might address through a periodical payment order. 

This is done only when the judge is confident that the trial judge will likely be aware of a larger capital sum than covered by general and special damages. 

Before taking this step, the judge must be convinced, based on evidence, that there is a genuine need for the requested interim payment and that the need is immediate. The judge must also be satisfied that the amount requested is reasonable. 

Can interim payments be made in instalments? 

Yes, the court can order an interim payment to be made in instalments. When this happens they should clearly outline: 

  • The overall sum of the interim payment; 

  • The amount allocated to each instalment; 

  • The total number of instalments and the specific date on which each instalment is due: 

  • To whom each instalment payment should be made. 

Can interim payments be ordered if all parties don’t agree? 

In a personal injury claim, if there’s a request for an interim payment and it’s not by consent (meaning all parties don’t agree), then the defendant has to get a certificate from the Secretary of State. This certificate should be filed at the hearing of the application for an interim payment and the court order will specify the deductible amount.

Tips for applying for an interim payment 

When applying for interim payments in a personal injury case, it’s important to prepare a strong case. Therefore you should start thinking about interim payments early in the case, if possible well before your needs become desperate. 

You and your solicitor may also consider whether seeking a substantial interim payment is the right strategy for your case. If you decide an interim payment request is appropriate, you might engage with the defendant to discuss what evidence will be necessary to address any concerns that might arise. 

Why claim interim payments for serious injuries?

Claiming interim payments can make a significant difference to the lives of people who have been seriously injured through no fault of their own.

They can cover the cost of medical bills, which you would have to pay yourself, leaving you further out of pocket and compounding your lost earnings from not being able to work.

Interim payments can be used to adapt your home to make life easier, such as adding a stairlift to your home, adding access ramps, or improving the accessibility of your shower and bath.

No win, no fee personal injury claims

When you have been the victim of a personal injury that is not your fault and you need legal support quickly, a traditional law firm might not be your best option. At Lawhive we offer specialist case assessments and our expert personal injury lawyers are thoroughly experienced in securing personal injury compensation on a no-win, no-fee basis.

For help and advice relating to personal injury claims, get a free case assessment from our legal assessment team today.

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