Interim payment applications: the evidential burden

Articles | Wed 23rd Mar, 2016

Holly Tibbitts looks at the recent case of Sellar-Elliott v Howling [2016] EWHC 443 (QB), which considered the evidence to be considered and the burdens on the parties on an application for an interim payment, particularly in a clinical negligence context where causation is disputed.

The claim

The claim arose from the failure of the Defendant, a consultant radiologist, to report a mass on the left lobe of the Claimant’s liver in 2008.  In early 2012 the mass was identified as a malignant tumour, as a result of which the Claimant had to undergo extensive, distressing and debilitating treatment. 

Breach of duty was admitted but the parties disagreed about the extent of the injury that had been caused by the failure to report the mass.  The claim was pleaded on the basis that in 2008 the mass was benign and had it been identified it would have been surgically resected and would not have undergone a malignant transformation.  The defence asserted, in essence, that by 2008 the tumour had already become malignant and that the damages flowing from the breach were consequently much less than suggested by the Claimant. 

Application for an interim payment

The Claimant had applied to the Defendant for an interim payment pre-proceedings but this had been refused.  Following issue in January 2015 the Claimant made an application for an interim payment pursuant to CPR 25.7 (1)(c) which provides that:

“The court may only make an interim payment where any of the following conditions are satisfied – …

(c) it is satisfied that, if the claim went to trial, the Claimant would obtain judgment for a substantial amount of money (other than costs) against the Defendant from whom he is seeking an order for an interim payment whether or not that Defendant is the only Defendant or one of a number of Defendants to the claim…”

CPR 25.7(4) also provided that the Court must not order an interim payment of more than a  reasonable proportion of the likely amount of the final judgment. 

Initially a payment of £65,000 was sought. Shortly before the hearing the Defendant agreed to make an interim payment of £17,500 and the application was adjourned generally. 

On 23^rd September 2015 the Claimant served the report of her causation expert and on the following day she issued an application seeking restoration of her earlier application for an interim payment, now sought in the sum of £100,000.  The application was listed for 29 October 2015. 

In the meantime the Defendant sent the Claimant’s report to her own expert, who responded that the Claimant’s report had not changed her view but that expert evidence of a histopathologist was required.  Master Cook refused the application to rely on a histopathologist at a CMC on 15^th October 2015. 

At the hearing of the application for an interim payment on 29^th October 2015 the Claimant relied on her own witness statement, her expert report on causation and three statements from her solicitor.  She asserted that even on the Defendant’s best case she was entitled to significant damages on the basis of the additional pain, suffering and loss of amenity caused. 

In contrast, the Defendant relied only on two witness statements from her solicitor which indicated that the Defendant’s position was that the Claimant’s history was consistent with there being a differentiated tumour in 2008, the preliminary view of their expert was supportive of this position, the Defendant’s expert did not change her view having considered the Claimant’s causation report, the Defendant was not in a position to serve her causation report yet as it had not been finalised and that the damages the Claimant was likely to recover would be far less than the £100,000 requested.  

During the course of the hearing, Master Cook drew the attention of the parties to the decision in Smith v Bailey [2014] EWHC 2569 in which Popplewell J had decided, amongst other things, that on an interim payment application there was an evidential burden on the Defendant to put before the court material raising an issue of contributory negligence, and that the task of the court was to apply to relevant legal test to the evidence before it. 

In submissions it was accepted that before ordering an interim payment of this kind the court must have a high degree of certainty that the Claimant will succeed in recovering substantial damages.  In this respect the Claimant submitted that the Defendant had had plenty of time to investigate the core causation issue and must have pleaded her case on the basis of some expert evidence, the Claimant’s expert evidence was coherent, logical and powerful and in the absence of any evidence to the contrary the Court could be satisfied that the Claimant would receive substantial damages. 

In rebuttal the Defendant argued that it was not obliged to serve its causation evidence at that stage and the application could not be effectively used as a vehicle to force the Defendant into early production of her evidence. 

Master Cook was not persuaded by the Defendant’s submissions.  He noted that the Defendant’s solicitor’s witness statement simply restated the defence and that the Defendant’s submission was effectively that the court could be satisfied that in due course, evidence in support of the Defendant’s case would be forthcoming.  Master Cook considered that the approach of the judge to arguments of causation is comparable to that where there is an allegation of contributory negligence, such as in Smith.  He concluded that “a defendant must go further than simply saying:  we have pleaded it, it is there in the pleadings and verified by a statement of truth when faced with compelling evidence from the Claimant”.  On the evidence before him he was satisfied that the Claimant was going to succeed in obtaining a substantial award of damages and ordered the Defendant to make an interim payment of £100,000. 

The Appeal

Unsurprisingly, the Defendant appealed the order.  Amongst the arguments the Defendant averred that the Master had erred in applying Smith in the presence case as while in a road traffic accident the Defendant had both the legal and evidential burden of proving contributory negligence, the burden was entirely upon the Claimant to prove causation in this case.  It was also argued that the Master should have considered what the evidence would have been at trial, rather than what was before him at the time of the application. 

Refusing permission to appeal, Mr Justice Sweeney found that Master Cook was right to conclude that he had to decide the application on the evidence before him and was right to rely on Smith to the extent that he had:  he was doing no more than recognising the strength of the Claimant’s expert evidence before him and the consequent need for some reasoning from the Defendant’s expert for him not to be persuaded that the requisite test was met.  The mere fact that the Defendant’s case was supported by reputable expert opinion did not mean that the Claimant had failed to persuade the court that the requisite test for the making of an interim payment was met. 

Conclusion

This case is an important reminder of the test to be applied in applications for interim payments and the burdens on each party.  The judge must look at the evidence available at the time of the application. If the Claimant has an apparently strong case supported by expert evidence the Defendant must do more than simply reiterate its defence and inform the court that it has an expert supportive of that position. Defendants will need to carefully consider how to respond to applications made before they are obliged to serve their expert evidence. In many cases it will be necessary to serve something from the expert explaining their conclusions and reasoning, even if not the full report.  A Defendant who chooses to serve only limited evidence takes the risk that the Claimant’s evidence will be accepted and an interim payment made.