The Court of Appeal and Interim Payments: Buttar Construction Ltd -v- Arshdeep [2021] EWCA Civ 1408

Summary

This was a personal injury claim in which the Court of Appeal considered arguments in relation to interim payments. The question for the court to consider was whether an interim payment should have been made against one of the Defendants.

HHJ Bird, sitting as a High Court Judge in the Queen’s Bench Division, ordered two Defendants to make interim payments of £150,000.

The Claimant in the case was Mr Arshdeep, an Indian national who was involved in an accident on a construction site on 21 August 2020. Following the accident, the Claimant suffered injuries that resulted in him being rendered a tetraplegic.

On 18 February 2021, proceedings were issued against four Defendants. On 22 April 2021, the Claimant issued an application for an interim payment. This was pursued against the Second and Fourth Defendants. The Claimant sought the interim payment in order to obtain funds for specialist rehabilitation in respect of his spinal injury.

 

Facts

The Claimant worked on a building site. The accident occurred there. He was seriously injured when the wall of a building collapsed – along with the joists – as he was working in its vicinity. Proceedings were brought by the Claimant against a number of Defendants. They had all been involved in the management of the site. An application for an interim payment was made against two of those Defendants.

 

Outcome

On appeal, the Court of Appeal considered three Grounds of Appeal. As per paragraph 33 of the judgment, the grounds as formulated by Buttar are:

i) Ground 1: The Judge erred in law in that he failed to consider whether the conditions specified by CPR 25.7(1)(c) were satisfied against the YKS, before dealing with the Claimant’s application against YKS and Buttar under CPR 25.7(1)(e).

ii) Ground 2: The Judge erred in law in that he was wrong to conclude that the conditions specified in CPR 25.7(1)(e) were satisfied, in particular: (a) he was wrong to conclude that if the claim went to trial the Claimant would obtain judgment for a substantial amount of money against the YKS or Buttar but he could not determine which; he should have concluded the Claimant would obtain judgment for a substantial amount of money against the YKS but could not determine whether the Claimant would obtain judgment for a substantial amount of money against Buttar as well; (b) The Judge was wrong to conclude YKS and Buttar were insured in respect of the claim; he should have concluded that, due to the fact the insurers of the YKS and the insurers of the Buttar had reserved their rights neither Defendant was insured in respect of the claim, alternatively it was not appropriate to make an order for an interim payment applying the dictum of Griffiths LJ in O’Driscoll v Sleigh.

iii) Ground 3: The Judge erred in law in deciding in the exercise of his discretion that Buttar should make an interim payment because of the substantial chance the Claimant’s claim against Buttar will fail and Buttar will not be able to recover the monies paid because the Claimant is impecunious and the solicitors acting for YKS’s insurers stated there is a very real prospect the YKS will not be indemnified in respect of the Claimant’s claim.

 

The Defendant’s appeal was dismissed by the Court of Appeal.

 

Ground 1

These are the reasons that the Court of Appeal gave for dismissing Ground 1:

“There is no substance in Ground 1. The claimant was entitled to bring the application under CPR 25.7(1)(e) and to have it decided under that ground. That is clear from the opening words of CPR 25.7(1), which permit the Court to make an order for an interim payment “where any of the following conditions are satisfied” and the absence of any words requiring a sequential approach to be adopted. Whether it was wise for the Claimant to do so and whether an application under that provision of the rule would succeed are different questions. Furthermore, the Judge was correct at [11] of the judgment when distinguishing between CPR 25.7(1)(c) and (1)(e) and recognising that they cannot both be satisfied: “the first applies where there is clarity as to the identity of the party against whom judgment will be entered. The second applies where there is no clarity.” I would dismiss the appeal on Ground 1.” [see Buttar at 34].

 

Ground 2

In respect of Ground 2, the Court of Appeal noted that CPR 25.7 was amended to allow a Claimant to obtain an interim payment against multiple Defendants. This has particular significance in situations where a judge cannot easily determine what damages the Defendant(s) will be ordered to pay. The Court is authorised to make an order for an interim payment “where any of the following conditions are satisfied”, pursuant to CPR 25.7(1). There is not a requirement for a sequential approach to be adopted. Therefore, under CPR 25.7(1), the Claimant was entitled to make a claim. The Court of Appeal noted that the trial judge had correctly noted the distinction between CPR 25.7(1) and CPR 25.7(1)(e). Further, it was noted that both could not be satisfied [see Buttar at 40].

 

Ground 3

In respect of Ground 3, the Court of Appeal rejected the argument that the uncertainty relating to the indemnity position – namely, the risk that an indemnity may not be provided – was a consideration that should be taken into account in respect of interim payments in this case. However, it should be noted that, more generally, this was considered to be a “material” consideration [see Buttar at 42]. In this particular case, the trial judge had considered the risk of the insurers not indemnifying to be “very thin.” [see Buttar at 42].

 

Comment

For practitioners involved in applications for interim payment where there are multiple Defendants – and where liability is contested – this is both an interesting and useful decision. This case acts as a reminder of the layers of analysis relating to the interpretation of CPR 25.7. This decision also provides useful guidance in cases where, at the interim payment stage, insurers are potentially seeking to reserve their rights in an attempt to avoid indemnifying those whom they insure.

Finally, this judgment also acts as an important reminder that, under the Pre-Action Protocol, parties are required to consider, as early as possible, whether the Claimant has needs that could be met by rehabilitation, treatment or other measures. This was just one of many potential cases in which a Claimant needs rehabilitation and where rehabilitation can only be funded if there is an interim payment.

 

Case review by Richard Ive, a Third-Six pupil at Farrar’s Building.

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