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Upfront Compensation Payments: What You Need to Know Before Your Claim is Settled

By Ian Morris | Updated July 4th, 2024

171 questions have been answered on this subject - ask us your question

Upfront compensation payments, also known as interim payments, are possible in some personal injury cases but are not common for minor injuries. It is fair to say that if you are making a claim for something like a broken ankle, an interim payment is very unlikely.

Be wary of companies offering upfront payments as inducements, as this practice is not allowed under current regulations.

When you’re pursuing a personal injury claim, the financial strain of lost income and mounting medical bills can be overwhelming. This often leads claimants to ask about the possibility of receiving compensation before their claim is fully settled. This guide will explain the concept of interim payments, when they might be available, and why you should be cautious of companies offering upfront payments as incentives.

Understanding Interim Payments

Navigating the financial challenges during a personal injury claim can be daunting. Interim payments offer a potential solution for some claimants, but it’s important to understand what they are, when they’re available, and how they work. Let’s demystify the concept and help you determine if interim payments might be applicable in your case.

What Are Interim Payments?

Interim payments are partial compensation payments made before a claim is fully settled. They are typically:

Made by the defendant who has admitted liability
Intended to cover immediate financial needs of the claimant
Deducted from the final settlement amount

When Are Interim Payments Possible?

Interim payments are usually only available in cases involving:

Serious injuries requiring multiple surgeries
Long-term or permanent disabilities
Extended periods of lost income
Significant ongoing medical expenses

The Process of Obtaining an Interim Payment

Liability must be admitted by the defendant
Your solicitor must demonstrate your immediate financial need
The court may need to approve the interim payment
The amount is typically a portion of the expected final settlement

Beware of Inducements

While the offer of quick, upfront money can be tempting, especially when facing financial strain, it’s important to be aware of potentially unethical practices in the claims industry. Some claims management companies may offer upfront payments to entice you to use their services, which can have serious implications for your claim.

Be cautious of such offers:

These practices are not allowed under current regulations
Companies offering such inducements may be operating unethically
You may be charged high interest rates on these ‘loans’
It could impact your final settlement amount

Claims management companies are subject to legal operating restrictions and regulated by Financial Conduct Authority. We have heard examples of clients that have been charged interest on any ‘upfront’ settlement payments made to them. When deducted from their final settlement, this has left them with virtually nothing. Other such clients have never actually received their final settlement.

Direct2Compensation never have and never will make a payment to any person in order to secure their claim. If your injuries and losses are such that you warrant an interim payment, we’ll do all that we can to get our solicitors to get the 3rd party to agree to one for you. However, the key is getting an admission of liability and this can sometimes take time.

Choosing a Reputable Claims Company

Selecting the right company to handle your personal injury claim is crucial for ensuring a fair and smooth process. With many options available, it can be challenging to know who to trust. When selecting a company to handle your personal injury claim:

Look for FCA regulation
Check their track record and reviews
Be wary of any offers that seem too good to be true
Choose a company – like us! – that focuses on your best interests, not quick payouts

Alternatives to Interim Payments

If you’re facing financial difficulties during your claim, consider:

Checking your insurance policies for coverage
Exploring government benefits you may be eligible for
Discussing payment plans with creditors
Seeking advice from a financial advisor

While the idea of receiving compensation upfront can be appealing, especially when facing financial hardship, it’s important to approach your claim with caution. Interim payments are possible in serious injury cases, but they’re not common for minor injuries. Always work with a reputable, regulated claims company that prioritises your long-term interests over quick, potentially harmful payouts.

If you have any questions on interim payments or want to see if you can claim injury compensation, leave a question below. Alternatively, call our offices on 01225 430285 or we can .

171 questions have been answered on this subject - ask us your question

Comments & Questions

Read on for questions and advice about claiming...

Hi I had a accident at work . Liability was accepted straight away almost 2 years ago now. I’ve received £1000 interim payment a while ago. My solicitor is very slow and won’t email unless I email her or call her . Ive had many medicals and have a permanent 7 inch scar on face ,been diagnosed with permanent moderate tinnitus and contortions of the median nerves and soft tissue damage. Is this a normal amount of time to take for a injury claim.
Thanks

Given the extent and severity of your injury, the fact that the claim process is taking the amount of time stated is not surprising. In any claim, it is important to ensure that the full extent of any injury or loss is understood so that an appropriate settlement value can be reached. As you will appreciate, expert reports are needed to provide the evidence needed and this can take time. In your case, you have a large permanent scar to your face and your Solicitor will be mindful that both the physical and psychological impact of that are understood to ensure an appropriate settlement. You also have nerve damage and tinnitus and these issues will require assessments by specialist medical experts who will provide reports to your Solicitor to use for valuation of the claim and future prognosis etc.

With regards to your Solicitor appearing to be slow and not communicating well, you should report your concerns to the firm about this in writing. Hopefully letting your Solicitor know that you would like to hear from them a little more often and that it would help you if they could set out some guidance as to what to expect and when in terms of reaching a conclusion on the claim will resolve the issue. However, if they continue to frustrate you and do not improve their communication, you could consider complaining to them.

Can solicitors deduct 25% of interim payments as well as the final settlement amounts at the end ?

Depending on what agreement you have signed when instructing your Solicitor, they can deduct that amount from the entire claim – this could include interim awards.

Can I get an upfront payment making a claim for compensation?

Providing cash incentives for claimants to instruct a firm is prohibited under the regulatory framework governing claims management or Solicitors acting in personal injury compensation claims. Any firm offering potential new claimants such an incentive is unlikely to be legally able to act and should be avoided at all costs.

hospital admitted liability 2 years ago, solicitor ignored my requests for an interim payment, now we have to start court proceedings as defendant not responding to part 36 offer. To apply to the court for an interim payment is this a separate application.

In normal circumstances, one wouldn’t apply to the court for an interim payment, they would request one directly from the defendants. However, if the defendants are no longer cooperating, the courts will be asked to intervene to compel them to do so and one could ask a Judge to award an interim amount in lieu of the final settlement agreement being reached at a later date.

I had a serious motorbike accident 18 months ago where a car pulled across the road i was travelling on causing me to crash into the side of his car. I have metalwork in my hips, pelvis, arm and hand. Amoungst numerous other issues including spinal, leg and psychological issues.
I have received around £50k in interim payments from the opposing insurance company, along with £40k+ paid out for case management and rehabilitation fees.
Despite this they still have not admitted primary liability. Given the amount paid to date would it be fairly safe to assume that they are likely to admit liability? And for what reason could they have to hold back admission whilst paying out these kind of sums of money?

It is extremely rare (almost unheard of) for a defendant to make interim awards when they are not of the view that they are liable. To issue an interim payment or meet any costs without an admission of liability on their part is a massive risk for them as even if they were later found to NOT be liable, they would have great (almost impossible) difficulty in recovering those costs.

Our view is that you should not worry and that it is most likely that they are simply delaying a formal denial of liability for as long as they possibly can. Given the nature of your accident and the way that your injuries were sustained, we cannot see how any other outcome than a formal admission of liability.

Now I’ve excepted the offer for my whiplash claim can i get an interim payment?

If you have accepted an offer, it is unlikely that getting an interim award would be viable or even needed. On acceptance of your offer, you should receive the settlement within a short period of time and as such, an interim payment is not needed.

Hi I was assaulted and had a cup thrown at me. I have had plastic surgery after it lacerated through my use of right arm, needing an artery restructure (none-mendable) and I have had blood clot on my lung since.

My solicitors obtained an interim payment of £1,000. The incident happened on 4th July 2019. My case has been with health professionals as I have not been the same person since. However, I am still no wiser as to the settlement amount i’ll get and my Solicitor has now asked for another interim payment. I am struggling to understand why this is taking so long. I’ve asked my Solicitor regarding the value, but i’m no wiser.

Claims for criminal injury compensation are often lengthy, especially where the severity of injury is notable – as with your case. The Criminal Injury Compensation Authority (CICA) does have a considerable backlog of cases to work through and this has further slowed the process. The fact that your Solicitor has obtained interim awards should be seen as positive as this confirms that your claim will succeed.

Hello I’ve been dealing with a cica claim for 4 years the defendants are in court in October, one person has already excepted liability but the other two hasn’t where do I stand for an interim payment?
Kind regards

You can ask the Claims Handler at the CICA to make an interim award to you.

Hi I have a hearing in the high courts for a interim payment can the courts order the Defendants to pay it?

The court may pass judgement that will compel the defendant to make an interim award.

I have an on going case where the defendants have admitted liability but are just dragging this out over 3 years now.
I have had interim payments of £45000 over that time, but I need another one as I now have a final court date in the high court for January next year and need an interim payment to pay my rent up until that time.

I have been told my claim is worth between £200k and £350k. I have had an offer of £100k which was turned down over a year ago. Would I be able to apply to the courts for another interim payment to cover my rent?

As you will appreciate, the interim payments that you have received to date will be deducted from the final agreed settlement payment that you receive. With that in mind, the amount you have already received will be something that the defendants will be aware of. As such, there is probably little scope left for much in the way of further interim awards. That said, if you can provide evidence of your rent payments and the amount you need between now and your court date, they may well be willing to agree to that amount.

How long before I can claim for an interim payment due too a loss of earnings for an accident?

As soon as an admission of liability has been obtained, a claimant may seek to request an interim payment to assist with financial shortfall caused by any injuries or financial loss due to the accident that forms the basis of their claim.

I broke my ankle and had three operations over 14 months ago. I’ve had screws and plates fitted to help my recovery. The defendants have recently admitted liability. Would I now be in a position to seek an interim payment before any compensation is settled

If liability has been admitted, the defendant will be compensating you, but the final value of the claim will probably not yet be known. In such circumstances, a claimant may seek an interim award to cover some financial issues – perhaps loss of income – from the defendant and your Solicitor can ask for this for you.

How can I make a 3rd party pay an interim payment to stop my family from being in poverty? We have an indisputable witness to the accident, but the insurers keep saying we are looking for more evidence. It has been a year now and they are still saying the third party are pleading not guilty! They should not be able to make you poor and we feel that they are doing this to make us accept a low offer. I have multiple fractures and will not be able to do my job anymore for which I got paid £100,000 a year. Now we’re living on £10,000.

Sadly, you cannot compel an insurer to make an interim award, only the courts could do that. Your situation is complicated further by the fact that liability is not yet accepted.

Have you asked your Solicitor if they could seek to force the 3rd party to reach a decision on liability and whether they may be able to take the matter to court to put before a Judge to seek a decision on liability and a potential interim award for some of the lost income you have already incurred?

In terms of the behaviour of the 3rd party and your allegation that they may be purposely delaying matters in order to force you in to accepting a below value offer, you may well be right – but proving so is the issue.

Hi,
I had an RTA just under 3 years ago, the other person admitted liability straight away. I had a number of injuries but finally this week all of the medical reports have been submitted to the other side. How long do insurers usually take to start making offers? I thought I read somewhere that there is usually a 30 day consultation period between the 2 sides, but my solicitor that is not correct. Can you give me any indication on how long it should take from here? Thank you.

Now that the medical reports have been submitted, the defendant may wish to question or query certain issues within those reports. If they do, there will obviously be a delay before the process of negotiating settlement can begin.

When the two sides have agreed on the medical reports, the defendant will usually make an offer fairly quickly (as soon as they have south advice from their legal counsel) and it is then a case of negotiating between the two parties. It would appear that you are fairly near to the end of the process.

An interim payment has been agreed between myself and the insurance company. I have asked for the payment to be done through bank transfer. This was over a week ago. Is this amount of time normal?

Unfortunately, the simple answer is yes! When an interim award is agreed (and also a final settlement) payment can take a few weeks to materialise within the claimants bank.

I had a accident at work that broke my foot and I also fractured a disc in my spine. I am still in severe pain and also possible damage to my knee replacement. I have a thumb injury due to a crush injury. I have been off work for over 12 weeks now and I am now signed of until May. I am now in a dire position financially due to this. I won’t get a medical report until the end of March. Can I claim for an interim payment? The 3rd party have admitted liability.

Given the severity of your injuries and the fact that you will have a loss of income, you should be able to obtain an interim payment as the 3rd party have admitted liability. Have you got a Solicitor acting for you? If have, ask your Solicitor to request an interim award – perhaps your loss of income to date. If you don’t have a Solicitor acting for you and would like to have specialist representation, please contact us so that we can assist further.

I have a compensation claim that is going on at the moment after having a fall over a raised manhole cover in June last year. But I have just received an intrim payment of £1000 which I haven’t asked for. What does this mean and what will my likely payout be?

It is odd that you have received an interim award without requesting one? Have you asked your Solicitor why they appear to have requested one without your consent? The fact that you have received an interim award indicates that liability has been admitted and that you will succeed with your claim, but the fact that £1000 has been awarded already gives no indication of the final settlement value.

Hi, I was knocked off my motorcycle in may. I was airlifted to hospital and suffered a fractured sternum, fractured rib and de gloving of the lower left leg
Numerous stitches and bruising,
I was in hospital for 10 days after needing a skin graft.
I had to have a second skin graft in august and spent another 4 weeks in a leg cast on crutches
I haven’t worked since may. And although fully healed. I will need a lot of physiotherapy before returning to work
I have received an interim payment of quite a substantial amount.
Is there any rule of thumb that dictates what percentage the interim payment should be, with regard to the final settlement?
I have been on full pay since the accident, but about to go onto the company insurance scheme when I will only get 1/2 pay .

There is no set percentage of total or amount for an interim award that can then indicate the final settlement value. You were clearly seriously injured and the impact of those injuries will be accounted for in your claim and final settlement. Have you discuss the final value estimate with your Solicitor at this stage? Of course, the value will be dependant on your recovery and the longer term consequences of your injuries.

Thanks Ian for your quick reply.
I did ask the solicitor if he had any indication of the value of my claim, but he said it was too early to estimate.
My next step is to start my physiotherapy, and I will need to see a ‘medico-legal expert’
Kind regards
RS

I did feel that it would be too early to be able to evaluate the final settlement value of your claim. The medical expert will be instructed to assess you, discuss the incident, your injuries and the medical treatments provided to date (reviewing your medical records). They will then provide a detailed report with a prognosis for your expected recovery, detailing any further medical interventions needed to your Solicitor. Once the contents of that report are agreed, your Solicitor will pass the same to a Barrister to seek detailed advice about claim value and proceeding to negotiate final settlement.

Good luck with your ongoing treatment and recovery.

Hi so I was hit by a bus in January I was in the passenger side car was stationary parked up ….. I’ve asked my solicitor for an interim payment which was approved nearly 8 weeks ago and I’m still waiting for it …. is there a set time once interim has been accepted?

There is no prescribed timeframe for an insurer to release an interim award. Whilst it usually happens within 3-6 weeks, it can take longer.

How much can my claim handlers ask for as an interim payment and can they take their 25% fee from my payment before the claim is settled

There is no specific limit to an interim award, but they are usually only provided in cases where liability is admitted and where the final value of the claim is likely to be fairly high.

Your Solicitor can deduct 25% of the interim award if they choose, but they should not deduct more than 25% of the total settlement.

Are interim payments repayable if opting out of receiving full compensation?

Why would you not wish to continue with the claim? If you have received an interim award, it indicates that you’ll obtain further compensation to settle the matter properly.

If you decide against pursuing the claim, you wouldn’t necessarily have to return an interim payment, but you may end up being in breach of the terms of your Conditional Fee Agreement and this will mean that your Solicitor cannot recover their costs and may therefore pursue you for costs.

Understanding Interim Payments

What Are Interim Payments?

When Are Interim Payments Possible?

The Process of Obtaining an Interim Payment

Beware of Inducements

Choosing a Reputable Claims Company

Alternatives to Interim Payments

Can I get an interim payment for a minor injury claim?

How long does it take to receive an interim payment if approved?

Will accepting an interim payment affect my final settlement?

What if the defendant refuses to make an interim payment?

Are there any risks to accepting an interim payment?

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