When the Plaintiff Asks for an Interim Payment

September 2014

What should an insurer or its counsel do when faced with a request from a plaintiff’s counsel for an interim payment in a personal injury case?  Not infrequently, before a trial or final settlement, plaintiffs’ counsel seek an advance on the damages that their clients ultimately hope to receive.

Sometimes the request is made with the suggestion that, if made, the interim payment will demonstrate good will on the part of the defendant which may later facilitate an early resolution with the plaintiff.

Experience generally demonstrates that any good will have completely dissipated long before the final resolution of the case and it may even be hard to get a credit for what has already been paid – the focus will be on “new money” only.

The context for these interim payment requests cannot be divorced from what would happen should the defendant refuse to make an interim payment and the plaintiff then proceed with a motion under Civil Procedure Rule 70.08.  Under that Rule, after a lawsuit has been started, the Court has a discretion to order that an interim payment be made but only where a defendant has either admitted liability or where a default or summary judgment has been awarded in favour of the plaintiff against the defendant.

If there is a viable liability issue, it is unlikely that a plaintiff’s counsel would bother to request an interim payment and it is even less likely that a defendant would make an interim payment.

If the liability issue has been decided, however, the Court can order that an interim payment be made but usually that discretion has been exercised sparingly.  The recent decision in Hynes v. Jones, 2014 NSSC 295 rendered by Justice Duncan is consistent with that conservative stance.

In that case, the plaintiff sought personal injury damages as a result of being struck (while walking in a cross-walk) by the defendant driver.  He claimed to have sustained a number of injuries including, among others, a broken left leg, fractures of teeth, the nose and the left hip along with associated soft tissue injuries, headaches, loss of concentration and memory and psychological difficulties.  The “minor injury” threshold was not in play.  Hip surgery was pending although the plaintiff had not yet secured a date and a lengthy wait in the public health care system was expected.

Prior to the interim payment motion, the defendants admitted liability and, in fact, their insurer had already made a number of prior interim payments in the total amount of $15,000.  It acknowledged the orthopaedic injuries but contested the causation of a number of injuries including the soft tissue injuries in the left hip (there was evidence of a post-motor vehicle accident slip and fall) and the extent to which those injuries impacted the plaintiff’s future employment prospects as a finish carpenter, the reliability of the plaintiff’s recollection of his symptoms as relayed to the doctors treating him and the extent of the plaintiff’s mitigation attempts.

In light of the uncertainties involved and the desire to avoid making a decision that ought to be made only after hearing and considering all of the relevant evidence as would presumably happen at a future trial, the Court was not prepared to order that any interim payment be made at all.

Justice Duncan was not even persuaded to provisionally assess the general, non-pecuniary (pain and suffering) damages based on the indisputable injuries only and order an interim payment based on the defendants’ likely best possible outcome in connection with that head of damage.

In the course of defending the motion, the defendants did disclose a number of examples in the evidence which they said demonstrated that the plaintiff was sometimes an unreliable and inconsistent historian of his symptoms.  While one might generally want to save this sort of evidence for a trial when a plaintiff would have little time to lessen the impact of it on the trier of fact, it was perhaps a small price to pay given that the plaintiff had been seeking an interim payment of almost $150,000.

Of course, this decision is obviously a favourable one for defendants generally.  It continues the trend in Nova Scotia cases whereby judges require a degree of certainty in the evidence before granting a request for an interim payment.  As a result, it may lessen the number of requests for interim payments generally and it should assist defendants in asserting a principled approach against voluntarily granting such requests as a matter of course.

This newsletter is produced by Wickwire Holm to keep our clients and friends informed of developments in the law and immerging issues. It is intended for general information purposes only. In preparing and circulating this newsletter, Wickwire Holm is not providing legal or other professional advice. Readers are urged to consult their professional advisers before taking any action on the bases of information contained in this newsletter.

If you have any questions about any issues raised within this newsletter or a related issue, please contact us at wh@wickwireholm.com or 902.429.4111.