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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Preston v City Electrical Factors Ltd & Anor [2009] EWHC 2907 (QB) (13 November 2009) URL: http://www.bailii.org/ew/cases/EWHC/QB/2009/2907.html Cite as: [2009] EWHC 2907 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Chester Civil Justice Centre Trident House, Little St. John St, Chester
		13/11/2009

Mr Justice Walker :

Introduction

1. It is often assumed that an admission of liability for a significant proportion of a high value claim will mean that a substantial sum will be available for interim payments in advance of trial of the remaining issues. In the present case it was agreed in February 2007 that the defendants were liable to pay 50% of the damages which, in the absence of contributory negligence, would have been awarded to the claimant for injuries suffered by him in consequence of a road accident. Interim payments for the benefit of the claimant have already been made for amounts exceeding £100,000 of the likely recoverable damages. There is now an application for a further interim payment of £100,000. The application is strongly resisted by the defendants. Their principal ground of resistance is that payment now of £100,000 could detrimentally affect the ability of the trial judge to make what would otherwise be an appropriate order, namely a periodical payments order ("PPO") for future care and case management. For reasons which I explain below I shall grant the application. Nevertheless, what has happened in this case illustrates the potential dangers of making the assumption I have mentioned. In that regard this case should stand as a warning to those who act for personal injury claimants.
2. The claimant, Mr Marc Preston, spent the afternoon and evening of 30 August 2002 consuming at least 10 pints of lager and a substantial amount of whiskey. By 10.25 pm, when he was crossing a road as a pedestrian, he was undoubtedly drunk. Unfortunately he was hit by a van driven by the second defendant, an employee of the first defendant.
3. Mr Preston was born on 6 October 1983. At the date of the accident he was aged 18. He is now 26. It is accepted by the defendants that the accident caused a brain injury resulting in cognitive deficits and personality disorder. It follows that the accident has, to this extent, given rise to a need for case management and support. A major issue arises, however, as to both the actual extent of past and future case management and support needs, and as to the extent to which those needs have been caused by the accident as opposed to an alcohol dependence syndrome which the defendants contend is not accident related. That and other issues are due to be determined at a trial of causation and quantum in April 2010.
4. Mr Preston began this claim as a protected party proceeding by his father and litigation friend Peter Preston. A professional Deputy, Mr Niall David Baker, has conduct of his affairs. His case manager is Mr Mark Keogan of N-Able Services Ltd. The defendants question whether Mr Preston's cognitive deficits are so great as to make him a protected party. That is not a question which I have to decide for the purposes of the present application.
5. The problem in the present case is this. Mr Preston's advisors consider that the overall quantum of his claim, even on a 50% basis, is worth over £1 million. If so, there is no reason to think that a further interim payment of £100,000 now would prejudice the ability of the trial court to make a PPO for future care and case management. There is, however, a wide margin of contention between the parties. The defendants have provided a counter-schedule for the purposes of the present application. This sets out the minimum awards which, for the purposes of today's application, this court can assume will be made by the trial judge under appropriate heads of damage. Those advising the claimants have sensibly taken the view that for the purposes of today's application it would not be an efficient use of court time to argue that defendants' figures should be rejected as demonstrably too low. They say that on those figures the undisputed overall minimum value of the claim is such that an interim payment now of £100,000 would not exceed a reasonable proportion of the amount that will be recovered at trial. The defendants' principal response is that if the trial judge were to make an order for periodical payments, then a substantial part of the overall value of the claim could not be awarded as a lump sum, for it would need to be used to finance the periodical payments.
6. Both parties proceed, for the purposes of today, on the basis that Mr Preston will occupy rented accommodation, and that his rental costs can accordingly be treated as part of his monthly outgoings. The defendants do not, however, accept a liability for Mr Preston's rental costs. It is agreed that I can assume that any periodical payments order would be for care and case management from year 2 onwards, on the footing that a lump sum would be provided for the first year of care and case management following the trial. On this basis, a decision by the trial judge to make provision for future care and case management by way of a periodical payments order would result in a lump sum made up as follows:

Past losses to trial	£118,967
Generals	90,000
Future loss of earnings	92,817
1st year care and case management	27,954
Total at 100%	329,748
Total at 50%	164,874
Deduction for payments already made for Mr Preston's benefit	-108,259
Lump sum awarded at trial	£56,615

7. Mr Douglas Herbert, who appeared on behalf of the defendants, observed that a likely lump sum award of £56,615 in April 2010 was manifestly insufficient to enable this court to direct an interim payment of £100,000 now. Ms Amanda Yip, who appeared on behalf of Mr Preston, advanced two responses. First, she submitted that this court could conclude that there was no prospect of a periodical payments order being made in April 2010. That, she submitted, was enough to dispose of the defendants' principal objection to an interim payment now. If she were wrong, however, then it was her contention that I could be satisfied, to a high degree of confidence, that expenditure of approximately £100,000 is reasonably necessary and that I would accordingly be justified in predicting that the trial judge would award a lump sum at such a level as will permit an interim payment of £100,000 now.

Relevant legal principles

8. Both sides agree that the leading case is Eeles v Cobham Hire Services Limited [2009] EWCA Civ 204. The judgment of the Court of Appeal was delivered by Smith LJ. The first four paragraphs of the judgment explained the context. The Damages Act 1996, as amended by the Courts Act 2003, provided for the court to make an award of damages which could include one or more PPOs. This made it necessary to examine what was the correct approach to the making of an interim payment where the damages, when finally assessed, could include such orders. Paragraphs 1-4 of the judgment are as follows:

1. This appeal raises the question of what is the correct approach to the making of an interim payment in a heavy personal injury claim where the damages, when finally assessed, are likely to include one or more periodical payments orders pursuant to section 2 of the Damages Act 1996 as amended by the Courts Act 2003.

2. CPR Part 25.6 makes general provision for applications for interim payment orders and CPR Part 25.7 specifies the conditions to be satisfied and matters to be taken into account when the court is considering whether to make such an order. The claimant must show first that he has obtained judgment or would, at trial, obtain judgment for a substantial amount of money against an insured defendant or public body. Then, at CPR 25.7(4), comes the provision which is important in the context of this appeal:

"The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment."

3. Prior to the amendment of the Damages Act, practice in this area of the law had become well-established. We can summarise the position by saying that the judge would usually make a conservative preliminary estimate of the likely final award. For that he would need both sides' schedules of loss, in so far as they could be provided at that stage. He would have to make a broad assessment of the merits of each side's contention and would err on the side of caution. He would order an interim payment which allowed a comfortable margin (or headroom) in case his preliminary estimate turned out to be too generous.

4. Before making an order, the court would not necessarily need to enquire as to what the claimant intended to do with the interim payment: Stringman v McArdle [1993] 1 WLR 1653. If of full age and capacity, the claimant would be entitled to do with it as he wished. If he was a minor or patient, control of the money would be exercised by the Court of Protection. Nonetheless, claimants often wished to explain why they wanted a particular sum at the time. Typically, a claimant might want to demonstrate the need to buy or adapt accommodation or to provide a care regime. He might wish to demonstrate the need for such a facility in order to show that the final award would be of sufficient size to warrant the making of an interim payment of the amount sought. Judges were warned against making an interim award which would have the effect of creating a status quo in the claimant's way of life which might have the effect of inhibiting the trial judge's freedom of decision; it was said that such an order might create 'an unlevel playing field': see Campbell v Mylchreest [1999] PIQR Q17

9. The Court of Appeal's judgment then explained the position following amendment of the Damages Act:

5. With the rise in the value of claims for severe injuries, it has become quite common for very substantial interim payments to be made, based upon a reasonable proportion of the likely amount of the final capital award. However, under the amended Damages Act it became possible for a judge to make a periodical payments order (PPO) in respect of some or all of the heads of future loss, index-linked to reflect future changes in the value of money and continuing for the whole of the claimant's actual life. Since this Court in Tameside & Glossop Acute Services NHS Trust v Thompstone [2008] EWCA Civ 5 affirmed that, when making a PPO, the court had the power to apply whatever index was most appropriate to the head of loss concerned, the benefits of a PPO have been generally recognised and such orders are now routinely made.

6. When considering how to allocate the various heads of future loss between a capital award and one or more PPOs, the trial judge has to consider what allocation will best meet the claimant's needs: see CPR Part 41.7 and paragraph 107 of Thompstone. The trial judge's task is to weigh the various aspects of the claimant's needs, in the light of the sums which are to be awarded under each head of loss and in the light of the available financial advice.

7. If a PPO is made, the capital sum ordered at the final hearing will obviously be less (probably much less) than the capitalised full value of the claim. CPR 25.7(4) has not been amended in the light of the PPO provisions so, on applications for an interim payment, judges have been left to apply that provision to a case in which a PPO might be made.

10. The judgment at paragraphs 11 and 12 summarised a first instance decision in another case:

11. In Braithwaite v Homerton University Hospitals NHS Foundation Trust [2008] EWHC 353 (QB), Stanley Burnton J (as he then was) made an interim award of £850,000 to a badly injured claimant who urgently needed money to provide suitable accommodation. The full capitalised value of the claim was of the order of £3.6 million and, as Stanley Burnton J observed, if the final order were to be simply a lump sum, there would be no difficulty in ordering an interim payment of £850,000. However, it was clear that the trial judge might wish to make one or more PPOs. Stanley Burnton J's approach was to calculate which parts of the claim were bound to be awarded as a lump sum. These were past losses and damages for pain and suffering with interest on both. Prima facie, that was the sum which was available to him for consideration of CPR Part 25.7(4). He concluded that those heads might not even amount to £850,000 and, taken alone, were plainly not enough to permit an interim payment of £850,000.

12. However, he considered that, in deciding the likely amount of the final judgment, he was entitled to predict what allocation as between capital and PPO the trial judge would make. On the facts of that case, there was really no dispute that the claimant had an urgent need for accommodation. So, Stanley Burnton J concluded that he could confidently predict that the trial judge would eventually allocate a sufficient capital sum to enable the claimant to buy a suitable property. That sum would be significantly in excess of £850,000. Accordingly, he had jurisdiction to order an interim payment of that sum and he exercised his discretion so to do.

11. The Court of Appeal in Eeles allowed the defendant's appeal against an order for an interim payment. In paragraph 32 of its judgment the court stressed the importance of the trial judge's freedom to make an appropriate PPO, continuing:

… Of course, there will be a tension between the claimant's need for an immediate capital sum and the desirability of the security of a substantial PPO. That tension cannot usually be properly resolved until the trial judge knows what sums are actually to be awarded under each head of damage and has financial advice available to him. At the interim payment stage, the judge does not have those materials. If the judge makes too large an interim payment, that sum is lost for all time for the purposes of founding a PPO. It cannot be put back into the pot from which the trial judge will allocate the damages.

12. The proper approach was summarised by the Court of Appeal in paragraphs 42 to 45 of its judgment:

42. Before leaving this case, we wish to summarise the approach which a judge should take when considering whether to make an interim payment in a case in which the trial judge may wish to make a PPO. …

43. The judge's first task is to assess the likely amount of the final judgment, leaving out of account the heads of future loss which the trial judge might wish to deal with by PPO. Strictly speaking, the assessment should comprise only special damages to date and damages for pain, suffering and loss of amenity, with interest on both. However, we consider that the practice of awarding accommodation costs (including future running costs) as a lump sum is sufficiently well established that it will usually be appropriate to include accommodation costs in the expected capital award. The assessment should be carried out on a conservative basis. Save in the circumstances discussed below, the interim payment will be a reasonable proportion of that assessment. A reasonable proportion may well be a high proportion, provided that the assessment has been conservative. The objective is not to keep the claimant out of his money but to avoid any risk of over-payment.

44. For this part of the process, the judge need have no regard as to what the claimant intends to do with the money. If he is of full age and capacity, he may spend it as he will; if not, expenditure will be controlled by the Court of Protection.

45. We turn to the circumstances in which the judge will be entitled to include in his assessment of the likely amount of the final judgment additional elements of future loss. That can be done when the judge can confidently predict that the trial judge will wish to award a larger capital sum than that covered by general and special damages, interest and accommodation costs alone. We endorse the approach of Stanley Burnton J in Braithwaite. Before taking such a course, the judge must be satisfied by evidence that there is a real need for the interim payment requested. For example, where the request is for money to buy a house, he must be satisfied that there is a real need for accommodation now (as opposed to after the trial) and that the amount of money requested is reasonable. He does not need to decide whether the particular house proposed is suitable; that is a matter for the Court of Protection. But the judge must not make an interim payment order without first deciding whether expenditure of approximately the amount he proposes to award is reasonably necessary. If the judge is satisfied of that, to a high degree of confidence, then he will be justified in predicting that the trial judge would take that course and he will be justified in assessing the likely amount of the final award at such a level as will permit the making of the necessary interim award.

13. I turn to the legal principles which a court will apply when deciding whether to make a PPO. These are very briefly summarised in paragraph 6 of the Court of Appeal's judgment in Eeles, by reference to the judgment reported as Thompstone v Tameside & Glossop Acute Services NHS Trust [2008] EWCA Civ 5. In fact this judgment of the Court of Appeal dealt with four different cases. None of them involved a split of liability. Later in 2008, however, in Rowe v Dolman [2008] EWCA Civ 1040 the Court of Appeal had to consider a contention by a defendant that the trial judge ought to have made a PPO in a case where the defendant was responsible on an 80% basis for the claimant's injuries. The point arose by way of a second appeal from the trial judge, and was dealt with briefly by the Court of Appeal. I set out in full the relevant passage from the judgment of May LJ, with whom Lord Phillips MR and Hallett LJ agreed:

19 The second appeal says that the judge should have ordered periodical payments, not a lump sum. Here the point is a short one. The judge's short judgment of 11 December 2007 may be found at [2007] EWHC 2799 . The judge correctly directed himself as to Section 2(1) of the Damages Act 2003 and Rule 47 of the Civil Procedure Rules . The latter provides that one of the factors to which the court is to have regard is the scale of the annual payments, taking into account any deduction for contributory negligence. Other factors are the respective preferences of the claimant and the defendant, their reasons and, in the case of the claimant, any financial advice received.

20 Mr Rowe's main reason for preferring a lump sum which was supported as to calculation by financial advice was that since he was to receive only 80% of his damages a periodical payments order reduced on that account would not fully cover his annual continuing care and other needs. The judge gave as the defendant's main reason for wanting a periodical payments order uncertainty about Mr Rowe's life expectancy. An independent financial advisor, Miss Ellis, supported the view that this might result in over- or undercompensation, but the life expectancy question was one which the judge had already determined and should not of itself necessarily suggest periodical payments.

21 The judge considered the scale of the annual payments to be the first consideration and he said in paragraph 9 of his short judgment:

"It seems to me that if this were a case where the claimant were to receive 100% of his damages the decision might be more finely balanced but he will not. If there is an order for periodical payments he will never be able to live his life as he wishes to live it and with the significant improvements noted by the experts, whereas if a conventional lump sum is ordered he will be able to do so for a substantial part of his life."

22 This seems to me to be a solid reason justifying the judge's discretionary decision, which did not proceed on any error of law. What is said in support of this appeal is that the judge ignored, or failed to have due regard to, financial evidence about equity release schemes. There are disadvantages in such schemes, which the appellant's skeleton argument recognises: see paragraph 6(c) of the judgment — but Mr Horlock says that none of these apply to Mr Rowe. It is said that if the judge had properly considered this, he would have ordered periodical payments. The point is made in a more cautious and measured way by Mr Horlock in his oral submissions, that the judge did not have sufficient regard to the possibility of an equity release scheme and that, in a finely balanced case, if he had, the decision may have gone the other way.

23 Miss Gumbel submits that the claimant's preference, guided by the Court of Protection is, she would say, the precedent consideration. Certainly it is important. She says, secondly, that with an entirely solvent insured defendant, the question is mainly one for the claimant. She then says that an equity release scheme is fraught with uncertainty. The Ellis report outlines the concept of an equity release scheme but no more. It gives no details of how the capital would be released over 15 years.

24 In my judgment, the comparative figures here are illuminating. The base figures are that the claimant's total annual need is £363,750. He is entitled to 80% of this, so that the initial annual periodical payment would be £291,000 if there were no model with a capital element in it. Of the £363,750, the component representing his care needs is £295,000, so a periodical payments order would not even cover the care costs, let alone his other living costs. Mathematically, £291,000 would be about £72,000 short of his full annual need. The 2007 purchase price of the house was £285,000. No figures were produced for the immediate capital value of the house upon a sale, with possession deferred for 15 years, but it would not, I suppose, and Mr Horlock broadly agreed, cover more than perhaps three years of an annual shortfall of £72,000.

25 Miss Ellis's appendix 3 calculates that a lump sum payment would cover the care costs, initially £295,000 a year for about 14 years, but not the other living costs. Her appendices 7 and 8 calculate that each of two variants of a part-capital and part-periodical payments model would cover the care costs but, again, not the other expenses for about eleven-and-a-half and twelve-and-a-half years respectively, so with a lump sum payment the claimant is somewhat better off with periodical payments but without the benefit of equity release. What is plain is that, on all these figures, release of the equity in a house worth £285,000 in 2007 would only supplement annual shortfalls in Mr Rowe's total needs for a small handful of years.

26 There is no calculation which I have seen showing how long a lump-sum-only payment would cover the full £363,750 annual costs, but a straight division of the available lump sum by the annual need produces a period of rather over ten years if you ignore both interest on the remaining capital and inflation in the costs. No doubt the interest after tax would be less than the inflation so the result would be something under ten years. No-one has considered 'lump sum, plus equity release at some stage.' The brutal fact is that by definition 80% of the total need will not cover the total need, and the shortfall is in the order of £72,000 a year. It is contended on behalf of Mr Rowe that if he receives only £291,000 a year he will have to leave his own home straight away because he will not afford the costs of staying there. Mr Horlock did not gainsay this. Supplementing the £291,000 by equity release could cover the shortfall but only for about three years. In these circumstances it is, in my view, entirely rational and understandable for those advising Mr Rowe and managing his affairs to opt for a lump sum payment which has the prospect of keeping him in his home for up to ten years and for them to judge that this is preferable to reduced periodical payments which will not keep him in his own home for more than about three years. There are no strong countervailing reasons suggesting that the judge should have reached a different discretionary conclusion.

27 In my judgment, for these reasons the judge's conclusion is not shown to have been erroneous and I would dismiss this appeal too.

Events since the accident

14. The view taken by those responsible for Mr Preston's care has been that an intensive care package is required. That view has undoubtedly been influenced by Mr Preston's recurrent alcohol problems. This care package has at times involved support for more than 100 hours per week. Mr Keogan states that the last alcohol-related hospital admission was in late March 2009. Since then Mr Preston has abstained completely from alcohol. Mr Keogan's account of how this came about is that an April 2009 multi-disciplinary team meeting led to increased support of 119 hours per week being provided. Mr Keogan describes an "awakening" in Mr Preston's awareness and a desire to engage with therapists and support staff to assist him to confront his difficulties. He considers that Mr Preston remains highly vulnerable and remains of the opinion that he will continue to require substantial support to maintain this progress. Nevertheless, the progress made by 9 October 2009 led Mr Keogan to express the opinion that a reduced level of support for 70 hours per week will suffice.
15. Mr Keogan's statement noted that some support was currently being financed by Warrington Borough Council pursuant to their social services functions. That support had been withdrawn in the past and it was possible that it might be withdrawn at any time in the future. At paragraph 9 of his statement Mr Keogan said this:

It is… with some concern that I have recently been made aware that there is very limited funding to continue with the process of [Mr Preston's] community rehabilitation. I have always had the opinion that Marc has the potential to improve his situation and have consistently strived to achieve this with him. The previous 6 months have demonstrated and evidenced that with the "right" people around him, this is feasible. If this support were to cease at this critical point I consider that there will be catastrophic consequences for Marc and for his family. The fabric of his current behaviour is being held together by the consistency of his therapeutic clinicians and support team.

16. Without objection on the part of the defendants, Ms Yip on instructions provided information about the current position. First, she submitted some financial calculations prepared by Mr Baker's team. This showed that Mr Preston has monthly income from Disability Living Allowance, Incapacity Benefit and Housing Benefit of £1,136 per month. In addition the Local Authority was providing £1,167 as a contribution to the costs of care. Thus the total monthly income is £2,303. As against that, there is monthly expenditure of more than £5,500 on case management, support workers and support expenses, along with nearly £300 for occupational therapy. When one allowed for a contingency for the cognitive behavioural therapist and neuro-psychologist a further £500 was needed. Other expenses included a daily allowance amounting to £585 in total each month, along with amounts for gas, electricity, telephone and miscellaneous sums. The total before allowing for Deputy's fees came to £7,458.74. There was thus a monthly shortfall of £5,155.14 before allowing for Deputy's fees.
17. These financial calculations recorded that as at 5 November 2009 payments on behalf of Mr Preston had resulted in an overdraft of £23,386. On top of this there were outstanding invoices for support workers, case management, Deputyship and rent amounting to a further £39,000. These items had fallen due for payment but had not yet been paid.
18. Ms Yip also provided information as to the latest assessment of the amount of support needed by Mr Preston. Mr Keogan was now of the view that in the light of further progress the amount of support could, within 3 months, be safely reduced to 50 hours per week.

Reports of financial advisors

19. Prior to the hearing Mr Preston's team produced a report of Mr Ian Gunn. Mr Gunn acknowledges that until quantum is known, it is virtually impossible to assess Mr Preston's needs, prioritise them, and make an assessment as to whether one form of award or another best allows for the need to be met. He nevertheless states that there are "clear indications that prima facie periodical payments would not be a suitable form of award."
20. For their part the defendants relied upon a preliminary report by Mr Stephen Ashcroft. He noted that a PPO would have advantages of security, certainty and indexation. There were significant differences between the party's medical experts regarding Mr Preston's life expectancy. An award by way of periodical payments would remove the uncertainty inherent in an arbitrary choice of multiplier, for the payments would be made throughout the lifetime of Mr Preston, however long or short that may be. Mr Ashcroft also noted that under s 731 of the Income Tax (Trading and Other Income) Act 2005 payments made under a PPO would be tax free. This contrasted with the position in relation to the lump sum award, where income derived from investment of the award would be taxed in the normal manner, at both basic and higher rates. The main disadvantage of periodical payments was that once the order is made, the payments are fixed, and cannot be varied thereafter. Mr Ashcroft suggested that the 50% liability split made it "arguably even more important" that payments for future losses be made under a PPO. His reasoning was that in the absence of a PPO the receipt of only a 50% award would very much increase the likelihood that funds would be exhausted within Mr Preston's lifetime.

The arguments

21. Ms Yip stressed that the figures adopted for the purposes of the application were highly conservative. Until now relevant experts instructed on behalf of Mr Preston had been of the view that a prognosis was premature. Now that a stage had been reached where a long term view must be taken, the experts were re-examining Mr Preston with a view to final reports. It was simply because the court hearing the application must take a conservative view that the application proceeded by reference to the defendants' figures.
22. At my request Ms Yip sought instructions in relation to the financing of Mr Preston's expenses by means of an overdraft. The shortfall between Mr Preston's monthly expenditure and monthly income had until recently been financed by previous interim payments. There had not been a deliberate decision to go into overdraft: the overdraft had arisen because of delays in getting the present application before the court. The overdraft had been provided by the bank on terms which were limited both as to time and as to amount. It would not be possible to continue overdraft funding up to the time of trial in April 2010.
23. Ms Yip submitted that if all Mr Preston's current medical problems were caused by the accident then even after the interim payment now sought there would be ample to fund a PPO. However, even if the defendant were right and only a reduced proportion of Mr Preston's current care costs were recovered, the quantification of damages at trial would comfortably exceed the amount necessary to cover the interim payment now sought. This was because if the defendants' approach were right then there would be no question of a PPO. The sensible course was that rehabilitation, while it was working, should continue.
24. As to the defendants' point that life expectancy was uncertain, Ms Yip identified two answers. The first was that any under-compensation arising as a result of the use of a lump sum format should not trouble the defendant. The second was that in Rowe v Dolman May LJ had observed that life expectancy was determined by the trial judge and should not of itself necessarily suggest periodical payments.
25. More generally, Ms Yip drew attention to the stress placed in Rowe v Dolman on the fact that even with an 80% split a PPO would mean that the claimant could never live his life as he would wish. Ms Yip added that in the present case the periodical payment, on the defendants' figures, on a 50% basis would be in the region of £6,250 per annum. This sum was so low that it was difficult to see how one could justify the administrative costs that went with it.
26. Moreover, the preferences of the claimant were important, and had to be seen in the context of the circumstances of the case. It was inconceivable that a court would say that the overdraft must be maintained. For all these reasons on the basis of the defendants' figures there was no likelihood that the court in April 2010 would make a PPO.
27. However if there were a possibility of a PPO then, submitted Ms Yip, the first need for Mr Preston was to discharge his existing liabilities. The sooner that happened the better. Mr Preston's next need was the continuation of the existing regime, for the reasons given by Mr Keogan. The Deputy when deciding on levels of case management and support was not concerned with causation. Even if it were clear that the need to spend money on care now is not caused by the accident, it was perfectly reasonable to say that Mr Preston needed the money nonetheless. Accordingly even if the trial judge thought some form of PPO would be appropriate, the court on the present application could have a high degree of confidence that the judge at trial would award a lump sum sufficient to enable the debts incurred to be paid off and to ensure that the support package would not break down.
28. Mr Herbert stressed that whether or not to make a PPO, and at what level, must be matters for the trial judge. It was enough for the purposes of today's application that Mr Ashcroft had identified reasons why a PPO might be suitable. Mr Ashcroft's point about the uncertainty of life expectancy remained valid despite what was said by the Court of Appeal in Rowe v Dolman. The first appeal in that case had involved the judge's determination of life expectancy. Having upheld that determination, the Court of Appeal was thus in a position to say that any uncertainties did not point towards a need for a PPO.
29. Mr Herbert rejected the suggestion that a figure of £6,000 per annum would be too low to warrant a PPO. It would give a guarantee of some support and would be supplemented by the contribution to care from Warrington Borough Council. Mr Herbert added that the defendants' figures had been prepared on the basis of a life expectancy to age 50. In fact, Mr Herbert contended, the medical evidence supported a lower life expectancy of 41 years of age.
30. Accordingly Mr Herbert submitted that the case was one in which the court at trial might wish to make a PPO. The agreed figures showed that the PPO might well mean that the remaining lump sum damages would not permit any interim payment at all. In those circumstances the principles in the final paragraph of Eeles came into play. Mr Herbert strongly contested the assertion that the court at trial would regard the interim payment as reasonably necessary. The course taken by the Deputy had put the defendants at a disadvantage: there was not a level playing field. The Deputy's conduct had enabled Mr Preston to come to court and say that he was s £60,000 in debt and needed the money. However Mr Preston might well be entitled to say that the Deputy should not have incurred these debts. The contention on the part of the defendants was that at least between now and the end of April Mr Preston should be limited to the amount of care and other expenditure that his monthly income could fund. What the Deputy chose to do should not tie the hands of the trial judge.
31. Even if a PPO at trial was not a real possibility, Mr Herbert submitted that the court should not award an interim payment at the level sought. The defendants' figures indicated that if no PPO were made the overall value of the claim at 50% would be £260,000. Taken with payments previously made for Mr Preston's benefit, the £100,000 now sought would amount to 80% of this. That would be wrong in a difficult case where the claimant's pre-accident history showed that the defendants' points on causation had some force. Further, added Mr Herbert, the need to maintain a level playing field was relevant here too. The judge at trial would have to decide whether Mr Preston was right to say that his alcohol dependent syndrome was caused by the accident, and also the extent to which he reasonably required care and case management to enable him to abstain from alcohol. A natural anxiety on the part of the judge to ensure that money spent was recovered might affect the court's mind on both those questions, especially the second.

Analysis

32. Two of Mr Herbert's points can be disposed of at the outset. First, having provided figures prepared on the basis of a life expectancy to age 50, the defendants' contention in oral submissions was that I should recognise that the medical evidence supported a lower life expectancy of 41 years of age. This was a contention that came far too late. The application had gone forward on the figures lodged by the defendant, and any attempt to go back on them would cause yet further – and wholly unjustifiable – delay. I reject the contention.
33. The second point I can dispose of at the outset concerns an aspect of the defendants' contentions that a further interim payment would deprive them of a level playing field. I do not consider that there is any real risk that a judge will allow the type or level of care to date, and between now and trial, to influence the determination of the questions of causation and quantum which Mr Herbert refers to. Isolating out the appropriate elements of causation, and assessing the quantum of those elements, are matters which are commonly determined by judges in circumstances where a claimant has already incurred the expense in question.
34. I turn to Ms Yip's main submission that this is not a case where the judge at trial "may wish to make a PPO", and thus is not a case to which the Eeles principles apply (see paragraph 42 of the judgment in Eeles). She relied strongly on the decision in Rowe v Dolman. In Rowe v Dolman Simon J attached particular importance to the 80% split of liability. The claimant's inability to fund the remaining 20% led him to conclude that a PPO would be inappropriate. The Court of Appeal rejected a contention that Simon J had erred in this approach. One might expect that the reasoning in a case where 80% of liability was admitted would apply with added force in a case where only 50% of liability was admitted. Mr Herbert is fully entitled to say that the case does not demonstrate that a split of liability is an absolute bar to a PPO. It is nevertheless a reminder that a split of liability poses potential problems for a PPO, and the claimant's own wishes are of importance. It also demonstrates that uncertainties about life expectancy are not necessarily determinative in favour of a PPO. I am not persuaded by Mr Herbert's argument that this was in some way related to the decision in the first appeal. The observations of May LJ at paragraph 20 were made in a context where the trial judge had had a difficult decision to make about life expectancy. The same would be true about a decision as to life expectancy in the present case – the judge's decision might not be easy, but that is not in itself a determinative factor pointing to a PPO.
35. Further, there is considerable force in Ms Yip's submission that on the defendants' figures an annual amount of £6,250 would be so low that, combined with all the other circumstances of the case including the claimant's strong preference for a lump sum, this court could say that a PPO would not be a realistic possibility.
36. Thus on the figures advanced by the defendant I would conclude for these reasons alone that this is not a case in which the trial judge may wish to make a PPO. I add that to my mind it is important to have regard to what the position would be if the court were to conclude that the defendants' contentions were not wholly successful. Might the court in those circumstances wish to make a PPO? In many cases it might be impossible to rule this out. In the unusual circumstances of Mr Preston, however, I see no room for a PPO. The major uncertainty is how great Mr Preston's care needs may be in future years, in particular depending upon the extent to which he will be able to continue to abstain from alcohol. There might be one or more relapses in the future. When these might occur, and what care needs would be associated with them, are difficult to predict. This gives rise to major question marks not only about life expectancy but also, and more fundamentally for present purposes, about the extent of his need for care. If the court were to conclude that all Mr Preston's care needs were attributable to the accident, then a PPO would be too rigid to provide compensation given the way in which those care needs could vary. The court might however conclude that the degree of injury and personality disorder brought about by the accident did not include care needs arising from alcohol dependency syndrome. In that event too a PPO would be too rigid. This is a case where the future involves contingencies which could give rise to very substantial needs, and the claimant says on advice that a lump sum rather than a PPO is needed so as to have funds which can be deployed either to guard against those contingencies or to be able to meet needs arising from them. The court must have regard to all the circumstances. In the circumstances of the present case it appears, on the evidence before me, to be plainly in the best interests of Mr Preston to have the maximum flexibility to make use of his damages in countering the problems of alcohol dependency disorder, even if the defendants are not responsible for that particular disorder. Accordingly whether or not the defendants are responsible for Mr Preston's alcohol related problems I am satisfied that this is not a case where a court may wish to make a PPO.
37. It follows that I find in favour of Ms Yip's primary contention, with the consequence that the Eeles principles do not come into play. Nor does Mr Herbert's complaint that the Deputy's conduct has deprived the defendants of a level playing field because it prevents the court from making a PPO – for on my findings the court would not wish to make a PPO irrespective of that conduct. That leaves only the suggestion that 80% of the defendants' own figures would constitute more than a reasonable proportion of the overall value of the claim. I do not accept this. The further interim payment would leave one-fifth of the defendants' estimate as a cushion. Mr Herbert said this was a difficult case where the claimant's pre-accident history showed that the defendants' points on causation had some force. I have no reason to think, however, that the defendants' figures do not fully allow for relevant difficulties. On causation those figures effectively assume that the defendants' arguments succeed.
38. I turn now to an alternative analysis. What if I am wrong to think that this is not a case in which the court may wish to make a PPO? If there were to be one or more potential PPOs, then depending on their scope, and the amount otherwise available by way of lump sum, a further interim payment might adversely affect the court's ability to make such a potential PPO. In such circumstances the governing principle is set out at paragraph 45 of the Court of Appeal's judgment in Eeles. I must be satisfied to a high degree of confidence that there is a real need for the interim payment requested. Mr Herbert queries Ms Yip's assertion that it is irrelevant whether the need is one for which the defendant is liable. In considering that question I gain assistance from the concluding sentence of paragraph 45. The reason for asking whether there is a real need is in order to assist in predicting what course the trial judge would take. The concern of the Court of Appeal in Eeles is to ensure that the interim payment does not have the consequence that the trial judge is debarred from making a PPO which would otherwise have been made. In that regard as it seems to me the trial judge will necessarily have regard to all circumstances. For the reasons I have stated earlier I think it clear that a court at trial would not regard a PPO as being in Mr Preston's best interests if and to the extent that the PPO in question would prevent him from giving effect to a desire on his part to follow the course recommended by his medical advisors. For the same reasons this conclusion as to the paramount need to be able to combat the alcohol dependency syndrome would, in my view, be reached whether or not the defendant is responsible for that syndrome. In those circumstances I am satisfied to a high degree of confidence that the further interim payment is reasonably necessary, within the meaning of that phrase as used by the Court of Appeal in Eeles.
39. More troubling, to my mind, is the concern that by going into overdraft, and incurring additional liabilities, the Deputy has placed the court in a difficult position. It would be contrary to the interests of justice if liabilities incurred by the Deputy had the consequence that the court felt obliged to make an order which it would not otherwise have made. It seems to me that this case does not fall into that category. For the reasons I have given earlier, irrespective of the overdraft and additional liabilities the court at trial would conclude that the amount now sought was "reasonably necessary." Accordingly on these particular facts I do not regard the conduct of the Deputy in the present case as disentitling Mr Preston from being awarded the amount that he seeks. Even so, I view with considerable concern the extent to which debts have been allowed to accrue in the present case. I do not criticise as I do not have full information as to how this has happened. It must be clearly understood that the court would be gravely concerned if it should emerge that the way in which a Deputy has handled a claimant's affairs has the potential to prevent the court from making a PPO where this would otherwise be in the claimant's best interests.

Conclusion

40. For these reasons I grant the application for an interim payment of £100,000.