MoJ Portal interim payments — A long awaited decision on paragraph 7.12!
A long awaited decision on paragraph 7.12! A long time source of frustration and the basis for much friction for insurers now seems to have gone…
HHJ Bird, the Designated Civil Judge for Manchester, recently handed down his decision in the appeal case of Carla Louise Lally v Gillian Butler, confirming the limited circumstances in which an interim payment can be requested in the MoJ Portal. This issue has long been a source of frustration to insurers and the basis for much friction, but the problem seems now to have gone away.
Paragraph 7.12 of the RTA MoJ Protocol details that where a claimant needs to obtain a subsequent medical report (or a non-medical report), he or she may request an interim payment, with the parties staying the Protocol process in the meantime.
Sounds simple enough: a second medical report (or other type of report) is needed so the claimant can have some money while he or she waits for that second report to be obtained.
Regrettably, the clarity and simplicity of that provision became ‘distorted’ in September 2015 with the decision of Luvin v Ageas. Accepting submissions from the claimant, the district judge in Luvin gave a view that under paragraph 7.12 a claimant could seek an interim payment in the MoJ Portal process in almost any circumstances. The district judge offered three examples of when a claimant pursuing an MoJ Portal claim might be able to request an interim payment, being:
- whenever a further report is required (as per paragraph 7.12),
- if the claimant declares that they do not know if they will recover in line with the inherently conditional prognosis given (all prognoses are inherently conditional) so wishes to wait and see, or
- if the claimant simply wants to delay settlement for any reason, such as whilst they undergo recommended treatment.
Points (2) and (3) were clearly an expansion on the literal meaning of paragraph 7.12.
Whilst only a decision from a district judge within the county court and so not binding, the dearth of higher level guiding decisions on points such as this make decisions from experienced district judges operating within courts with large volumes of portal litigation hugely influential. Other district judges, both full and part time, saw the issue as ‘resolved’ so offered no alternative view.
The practical impact of Luvin was to undermine on of the primary aims of the MoJ Protocol: speed of process. Paragraph 7.12 said to claimants: if you want damages in your hand as soon as possible, get on with the process (unless a second report is needed). Insurers who gave 7.12 its simple literal meaning and resisting making interim payments were finding that Luvin was followed later down the line, post-removal of the claim from the MoJ process and post-issue, and their liability for costs grew from ‘MoJ Stage 1 and 2’ to ‘full Part 7 fixed costs’, plus costs relating to an interim payment application. The difference was often around £5,000 per case.
The Lally v Butler decision
Almost exactly six years later, the question of whether the district judge in Luvin was correct and entitled to expand paragraph 7.12 was appealed to the circuit judge in Manchester designated to deal with civil claims. Giving the point short shrift, HHJ Bird stated ‘…an interim payment can only be requested under paragraph 7.12…where a second report is “justified”.’ Mrs Justice Foster DBE looked at that term in the case of Greyson v Fuller  EWHC 211 (QB) declaring ‘justified’ to mean ‘necessary for the claim’. HHJ Bird acknowledged that his job was made easier by Greyson having discussed what ‘justified’ meant but added that ‘I have, however, come to the view that Luvin should not have been followed in any event’. In his view, the district judge in Luvin went ‘…too far’ when she ‘re-wrote’ paragraph 7.12.
In allowing the appeal the circuit judge disallowed the claimant’s entitlement to full Part 7 fixed costs (given by the deputy district judge in the lower court).
Those claimants pursuing their claim within the MoJ Portal with a medical report which does not expressly detail that a further medical report is needed, justified or necessary for the quantification of a claim cannot request an interim payment. Their only way to receive damages is to submit the claim at ‘Stage 2’ and follow the process.
Insurers can be confident that a claimant who removes – or has removed – a claim from the MoJ process because an unjustly requested interim payment was not made (or was not made at the sum sought) should not be able to recover Part 7 fixed costs where that claimant has issued Part 7 proceedings. CPR 45.24 details the costs consequences of a failure to comply with the MoJ Protocol, being entitlement to no more than MoJ costs.
For further information on the MoJ portal interim payment or for any information regarding this case then you can get in touch with our expert motor insurance team