What are interim payments?
Cases involving serious injuries can take several years to conclude, usually because Claimants wish to wait to see how they recover before settling their case; in order to ensure that they recover all of the compensation to which they are entitled.
This does not mean however, that Claimants have to wait until the end of their case before receiving any of their compensation. The law recognises that Claimants need access to some of their compensation at an early stage and Claimants are therefore entitled to part payments of their damages which are referred to as interim payments.
What are they used for?
Common uses of interim payments include funding treatment and rehabilitation, specialist aids and equipment, the adaptation of accommodation and the setting up of a care and support regime; to ensure that recovery and the quality of life is maximised from the start. Importantly, interim payments are also used to provide Claimants with funds, who may otherwise be struggling financially as a result of their injury.
How are interim payments made?
Interim payments can be made in a variety of ways. Sometimes the Defendant will make payments to agreed rehabilitation agencies to fund treatment and rehabilitation directly and/or it can make general interim payments to the Claimant's solicitors to hold on account, to fund such things as treatment and rehabilitation, with the Claimant's agreement. Importantly, interim payments can also be made directly to Claimants to use as they wish.
Who is entitled to interim payments?
It is much easier to secure interim payments from the Defendant in cases where liability has been admitted. Defendants are asked to make interim payments voluntarily however, if there is any dispute, Claimants can also apply to the Court for an Order forcing the Defendant to pay the requested interim payment.
In cases where liability is in dispute the Defendant is unlikely to voluntarily make an interim payment. This does not stop the Claimant from applying to the Court for an interim payment, but the Court must be satisfied that the Claimant's claim will be successful before making an interim payment. This can only be done therefore, in cases which have very good prospects of success.
How much and how often?
The amount of interim payment will depend on the value of the case and what it is needed for, although the Court will not award more than a 'reasonable proportion' of the likely overall value of the claim. Claimants can ask for and apply for as many interim payments as they like throughout the case.
Will an interim payment affect my benefits?
It is common for seriously injured Claimants to be in receipt of benefits following their injury. Receiving interim payments can reduce or even stop the Claimant's entitlement to benefits after a year of receiving the first interim payment. Claimants are therefore advised to set up a Personal Injury Trust to pay interim payments into. Personal Injury Trusts stop interim payments from affecting their benefits. You can read more regarding Personal Injury Trusts via our dedicated Personal Injury site here.
How will interim payments affect the final award of compensation?
Any interim payments received will be deducted from the final award at the end of the case to avoid the Claimant being paid twice. It is important to realise however, that any treatment and rehabilitation funded by an interim payment will still be included in the claim. Therefore, money used for such things will not reduce the compensation for any of the Claimant's other losses, such as the compensation to which the Claimant is entitled for their pain and suffering.
For more information please contact Damian Horan or visit our dedicated personal injury site here.