Interim damages - Change is necessary: Murphy v Dunbia (UK) t/a Highland Meats [2022] CSOH 65

Published 10 October 2022

Introduction

This somewhat unusual decision follows the pursuer’s Motion for further interim damages in a personal injury claim. The pursuer sought £30,000 by way of interim damages. He had already received interim damages of £40,000 on a voluntary basis and, in April 2022, the Court awarded him a further £10,000.

The Opinion is limited to the subject matter of the Motion so the details of the claim are not known. However, it seems that the accident in which the pursuer was injured had serious consequences for him and the pursuer’s legal team valued the claim at over £680,000.

Having heard parties, Lord Lake refused the pursuer’s Motion for further interim damages.

Relevant Rules

In terms of the relevant Court rules, a court can order any defender who has admitted liability in a personal injury action, or any defender against whom the court is satisfied that liability would be likely to attach without a substantial finding of contributory negligence, to make an interim payment of such amount as the court sees fit, “…so long as it does not exceed a reasonable proportion of the damages which, in the opinion of the court, are likely to be recovered by the pursuer”. 

Once a Motion for interim damages has been dealt with by the Court, a subsequent motion for interim damages can only be made where there has been a “change of circumstances”.

Issues

Accordingly, the main issues before the court in the Murphy case were:

1. Did the total of interim damages sought exceed a reasonable proportion of the damages that the pursuer might eventually recover?

The pursuer’s Counsel contended that, as the claim was valued by the pursuer at £683,701, the sum sought would not result in the total interim damages paid exceeding a reasonable proportion of the damages that the purser might eventually recover.

The defenders’ Counsel valued the claim at £134,000. Their position was that the value of the interim damages already paid of £50,000 together with the recoverable benefits of £38,000, taking the total interim payments to £88,000, meant that the pursuer had already received a reasonable proportion of the damages he could expect to recover.

Lord Lake considered it appropriate to rely on the pursuer’s valuation given that he had not been provided with a copy of the defender’s valuation nor any details as to how the figures had been arrived at. On the basis of the pursuer’s valuation, the Lord Ordinary found that the total interims and CRU would not exceed a reasonable proportion of likely damages. 

In support of this position, he noted that, in a previous case, a sum of 75% of the likely damages awarded had been held not to exceed a reasonable proportion of the likely damages. The total sum of £118,000 effectively being sought in the Murphy case would not exceed 75% of the likely damages and would therefore not exceed a reasonable proportion of the damages that the pursuer might expect to recover.

2. Had there been a change in the pursuer’s circumstances since the date of the previous award in April pursuant to Chapter 43.11(6) of the Rules of the Court of Session?

The second strand to the defenders’ opposition was that there had been no material change to the pursuer’s circumstances since the previous interim damages payment was awarded by the court.

The pursuer’s contention was that there had been such a change. CBT had been recommended at a cost of £2,000. Further, the case had been transferred to Chapter 42A, the special procedure for certain personal injuries actions, and this meant that no proof date had been fixed.

Lord Lake noted that the test for whether or not there had been a change of circumstances was the same both in a case where an earlier motion had been refused and in a case like this where an earlier motion had been granted. He recognised that the intention of the rule was to place a limit on the ability of a pursuer to make repeated motions for interim damages.

Lord Lake considered that whether or not there had been a change of circumstances would have to relate to “something that bears on the issues that have to be decided such that a different outcome might be expected to result”.

On this basis, Lord Lake considered that the recommendation to undergo the CBT did not meet the test. The pursuer had CBT in the past and the cost of the CBT would have been something relevant to the earlier award and was not a change of circumstances. The moving of the case to Chapter 42A procedure was likewise not relevant. The rule requires consideration of how much is likely to be recovered after a proof and not when the proof will take place.

There had not been any change in circumstances and, therefore, Lord Lake refused the pursuer’s motion.

The CRU problem

Lord Lake noted an important issue regarding the CRU position which had been raised during submissions. He had been referred by the defenders’ Counsel to the fact that in accordance with s15(2) of the Social Security (Recovery of Benefits) Act 1997, a defenders’ CRU liability had to be taken into account in assessing whether the sums already paid amounted to a reasonable proportion of the sum that the pursuer would likely receive. This Act provides that:

“The court must, in the case of each head of compensation listed in column 1 of Schedule 2 to which any of the compensation payment is attributable, specify in the order the amount of the compensation payment which is attributable to that head.”

No evidence had been led that would have enabled the court to ascribe any part of the interim damages sought to the heads specified in the schedule. As such, Lord Lake found that he would have been unable to grant the motion even if he had agreed with the pursuer on the question of the change of circumstances.

“Take home” points

1. The valuations presented by the pursuer and defender were far apart: the pursuer’s was over £680,000 whilst the defenders’ was £134,000. The Lord Ordinary favoured the pursuer’s valuation but this appears to have been largely due to the fact that he had not been provided with any meaningful breakdown of the defenders’ figures. As such, if opposing any motion for interim damages in the future, it is important that a meaningful valuation is provided to the court if the argument is that the sums sought will exceed a reasonable proportion of the damages which are likely to be recovered by the pursuer. 
2. Whist the case does not purport to lay down any “rules” about what would constitute a “reasonable proportion” of the damages which are likely to be recovered by the pursuer, it is of note that the Judge hearing the case referred to an earlier decision in which a sum of 75% of the likely damages awarded had been held not to exceed a reasonable proportion. As such, pursuers may be awarded a significant level of interim damages in the context of their case and it may be worth looking to negotiate the total figure to be paid rather than having the court determine the level to award if there is a desire to restrict the interim payments made.
3. The judge refused the motion on the basis that the pursuer’s circumstances had not changed at all or sufficiently enough to overcome the hurdle in Chapter 43.11(6). A change in circumstances must be a change that is “material and directly relevant to the key issues”. Tactically, if interim damages are going to be paid on a voluntary basis and there is a concern that there may be a subsequent Motion to the court for additional interim damages, it might be sensible to make the interim damages payment conditional on the pursuer enrolling a Motion for the agreed amount so as to limit the chances of them seeking to return to the court. That Motion would then proceed as unopposed resulting in there being a court decree for the agreed sum. This tactic would not be likely to work if the pursuer was seeking a relatively modest interim payment as they would be unlikely to agree to proceed on that basis. However, it might be worth considering when larger sums are involved.
4. The Lord Ordinary’s remarks regarding the CRU benefits are interesting. Nothing was put to him which would have enabled him to link any of the interim damages to the heads set out in Schedule 2 to the 1997 Act. This would have had an effect on the eventual net award. Pursuers will require to provide the court with sufficient material to ascribe the sums sought to the various heads of claim to enable the court to consider their Motion.
5. Finally, bear in mind that leave to reclaim was granted by Lord Lake, so it is likely that this is not the end of the matter. We will keep you up-to-date on any developments.

Our Complex Injury Team deals with cases like this on a regular basis. For more information or advice, please contact one of our experts.