Portal Interim Payments: ‘Drop Out’ must still be reasonable
Glyn Thompson looks into the West Cumbria County Court proceedings that concluded this week regarding portal interim payments.
The West Cumbria County Court this week concluded long running proceedings which dealt with the issue of whether a claimant acts reasonably by removing a claim from the MoJ process where a defendant did not make an interim payment within the MoJ process at the exact sum sought, but at a slightly reduced sum.
Having determined that the removal of the claim from the MoJ process in those circumstances was unreasonable and disproportionate, it limited the claimant to MoJ Stage 1 and 2 costs only and this week ordered the claimant to pay the defendant the maximum amount allowed for provisional assessment costs, punitive interest on those costs and costs incurred in relation to the summary assessment of those provisional assessment costs.
The claim arose out of a road traffic accident that occurred on 6 August 2017. The claimant’s solicitors – Lansdale & Holdsworth – submitted the claim to the defendant’s insurer via the MoJ Portal on 8 August 2017 and received an admission to end Stage 1. With that admission the defendant’s insurer offered to provide treatment – setting out the costs of its preferred provider via a link to the provider’s charging schedule. That offer was not taken up. A medical report was obtained on 5 December 2017 (four months post-accident) which gave a prognosis for recovery of 10 months. The claimant wished to wait out the prognosis period before submitting his claim – which the defendant was content with. The claimant then submitted an interim payment request via the MoJ Portal at around six months post-accident seeking £1,000 for personal injury and £665 for treatment, providing only estimates/pro-forma invoices in support of treatment. The defendant made an interim payment of £1,000 for PSLA and £515 for treatment, being £150 less than that sought, which was in line with the cost to the defendant for treatment had the claimant used the defendant’s preferred provider. The claimant removed the claim from the MoJ process because the interim payment made was not ‘as per the claimant’s request’ and issued Part 7 proceedings. The £150 shortfall was then paid on a general basis so as to negate the need for an interim payment application in the Part 7 proceedings.
Upon conclusion of the action the claimant claimed Part 7 post-issue fixed costs of £2,655 plus 20% of damages plus VAT and disbursements. The defendant contended that the removal was unreasonable for several reasons including that the evidence in support was merely a pro-forma, that it had made a payment in line with the costs of treatment it would have incurred with its own provider and, not least of all, that the claimant later underwent treatment at a total cost of £505 - £10 less than the interim payment he received!
Despite this firm proposing that the parties put the issue before the court for adjudication at summary assessment following application (in line with the recent authority of Nema v Kirkland), the claimant’s solicitors elected to commence the provisional assessment procedure.
The three decisions
Following the drafting of a Bill, Points of Dispute and Replies, the court adjudged that, irrespective of the fact that the claimant did not actually spend as much on treatment as the defendant had paid, the difference between what the defendant paid and what the claimant wanted (£150) was ‘…not sufficient to justify discontinuing the process…’ so that the claimant had ‘…acted unreasonably…’. The claimant was therefore limited to ‘MoJ costs’. As is standard, the parties were ordered to calculate the sum payable. The claimant’s solicitors insisted that MoJ costs meant ‘for all three stages’. The defendant disagreed. The court was informed of the further dispute and invited written submissions, which were duly provided. With its second decision, the court limited the claimant to the costs relating to Stages 1 and 2 only, being £780. Having failed to beat the offer for costs made by the defendant (£800), the claimant was required to repay the overpayment and pay the defendant’s costs of the provisional assessment.
A derisory offer followed by no contact caused this firm to make an application for the summary assessment of the costs relating to the provisional assessment process. In bringing the matter to an end this week, the court ordered the £20 repayment (which remained unpaid!) and awarded the defendant the full provisional assessment costs permitted (£1,500 plus VAT), punitive interest on that sum and the costs of the defendant’s application for summary assessment.
The ‘interim payment process’ within the MoJ Protocol is complicated and fraught with pitfalls. County court level decisions with little authoritative value suggest that interim payments can be made in almost all cases. Whether that is correct will invariably be tested before a higher court at some point. In the meantime, defendants can take comfort from this latest decision which is a clear affirmation that reasonableness and proportionality will be borne in mind when a court determines whether a claimant’s election to remove a claim from the MoJ process for what might appear to be a black and white case of non-payment of an interim payment as sought.
The court also referred to the claimant’s solicitors’ conduct as ‘obdurate’ and ‘intemperate’ and reminded those acting for the claimant that whilst it is accepted that it is the job of a solicitor to argue their client’s case forcefully and legitimately, a solicitor owes a duty to the court and ought to show respect to other solicitors. Those who resist acceptance of the court’s decisions and deal with their opponents in an inappropriate manner can expect to face harsh costs consequences.