Upfront compensation payments before a claim is settled

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The regulated personal injury compensation claims sector has literally thousands of companies offering their services.  With this in mind, the consumer should be aware that not all companies are worthy and that not every piece of advertising you see can be counted on as being the level of service that you will receive.  As we’ve said many times, it’s really important to make sure your claim is placed securely and with a regulated firm such as Direct2Compensation that you know that you can trust.

Upfront payments

One question that comes up from time-to-time from claimants (and it’s usually those that are facing pretty serious injuries and lengthy periods of absence from work and lost income that ask this) is about the possibility of getting upfront payments in respect of their claim for personal injury compensation.  Looking at it from that perspective, if you are used to earning a couple of thousand pounds each month and then you earn nothing whilst you are injured, your main concern will be how to pay the bills.

However, unless there is a very serious injury that will require multiple surgeries and therefore making the length of time for that claim to be pursued unusually long, it is very difficult to get any interim payments of compensation.  Interim payments are made by a 3rd party that has already admitted liability.  Therefore they agree that they will be liable to compensate a claimant but are making an interim payment to cover a possible loss of income or for necessary expenses incurred as a result of the injuries and effect that they are having on a claimants day-to-day life.  It is fair to say that if you are making a claim for a relatively minor injury, such as a broken ankle, an interim payment is very unlikely.  It should be remembered of course, that any interim payment made will be a part of the total value of any settlement and will be deducted from any final settlement that is agreed between yourself, your solicitor and the 3rd party.

Beware of inducements

One word of caution, though, is to be wary of any claims company or solicitor that offers upfront payments to induce you to place your claim for compensation with them.  Such activities are certainly not allowed within the framework of the current regulations. Claims management companies are subject to legal operating restrictions and regulated by the Claims Management Regulator.  We have heard examples of clients that have been charged interest on any ‘upfront’ settlement payments made to them, which when deducted from their final settlement has left them virtually nothing and from other clients that have never gone on to receive 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.  We believe our claims process and way of operating is attractive enough to entice you to instruct us and that the rest of it will take care of itself.

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    • When an interim payment has been agreed and the amount to be paid has been accepted, the approximate time frame for the claimant to have cleared funds is usually around 21 days (from the date that signed acceptance of the interim payment is received by the defendant insurers).

  1. My grandson was offered an amount as the settlement of his claim and he signed to say he would accept the amount stated. He then received an email from his Solicitor to say that he had received a cheque from the other side but for a lesser amount, and deducted an interim payment – which we were never told in correspondence, telephone,or meetings including the last one when he signed to accept the offer in the solicitors office! Is this legal?!

    • If any interim payment award was made to your Grandson during the claims process, the final settlement would include that interim payment (which would be deducted at the end) so that the full settlement received by your Grandson also included the interim award. For example, if a claimant received £1000 as an interim payment during their claim and agreed a final settlement of £3000, they would not receive a final settlement for £3000 but £2000. Of course, they are also going to have to make their 25% contribution too.

      If you think that the Solicitor has acted incorrectly, you must address your grievance to them immediately. Look on the Solicitors website as it should have a published complaints procedure that will explain how they would investigate such a complaint. If they are then unable to satisfy your complaint and you still have concerns that something untoward has happened, you can then go to the Legal Ombudsmans Service.

  2. Hi I have a claim going on at the moment. They have accepted liability and am awaiting settlement. I requested an interim oayment due to financial difficulties which was agreed. I have only received half and been total other half is being sorted, but it’s been a week now and still no sign. How long should I wait and is this normal

  3. Hi. I had a bus accident three years ago, I was coming home from work and the bus crashed into a car and went reeling into the front of two houses. The bus driver admitted fault and was found guilty. Also the bus company admitted liability. That was all within 6 months of the accident.
    After three very long drawn out years I have had the final medical assessment and been dismissed by the psychologist I was referred to. All the paper work has now been submitted to court and I know the I’m on the last leg of it being finalised.
    However, seven weeks ago I had do give up work due to still suffering from the injuries so I ask if I could apply for an interim payment. To date my solicitor still hasn’t heard from the court and apparently is going to ‘chase it up’ some time this week. She said I should be receiving an application form shortly for me to apply. . Once I’ve filled in and signed this application form how long will I need to wait for the payment?

    • The wait should be fairly short – a matter of days, but of course the application will have to be accepted first.

  4. Three years ago, the bus I was travelling home from work on crashed into two houses, I was injured and off work for eight months. I am still suffering from the injuries and have now had to give up work altogether. Eventhough my compensation claim was fairly straight forward and the bus company has admitted liability and all the medical evidence is up to date, I still haven’t yet received any indication as to when this will all be finalised. .Three weeks ago my solicitor said she is still waiting on medical evidence, I am wondering how much longer this may take before I receive a settlement
    Also five weeks ago I applied for an interim payment , I phone my solicitor every week on this but all I’m told is that it’s being chased up. How much longer will an interim payment take to process

    • You have clearly been badly injured as a result of the serious accident that you describe. Given that you are still suffering from the injuries and are unlikely to recover fully it is very important that your Solicitor ensures that the fullest and best medical evidence is obtained in order to ensure that the value applied to your claim is maximised.

      Whilst there has now been 3-years pass since the accident and we appreciate that this amount of time is a long time to be waiting for the claim to move on, it is not unusual given the amount of damage this incident has caused to you and your life.

      With regards to interim payments, your Solicitor should be able to reach an agreement with the defendants on this matter in order to obtain an interim payment for you, particularly with regards to some loss of income as this is unlikely to be disputed whereas the amount of compensation for the listed injuries is something that is usually disputed a little more.

      Whilst it is frustrating for you to have to wait and you feel as if you are chasing your Solicitor, it is most probable that your Solicitor is doing all that they can and that they are simply having to wait for defendant responses.

  5. Good Afternoon,

    Last week i signed claim valuation offer a couple days after my solicitor disclosed my claim and sent it to the third party.
    I would like to know how long will take for me to receive interim payment or full compensation from the third party via my solicitor?

    • if admission of liability has been obtained in your case and an agreed interim payment sum has been reached, it should be a fairly quick process for you to obtain the payment. The payment should go from the defendant insurer to your Solicitor who would then forward the sum to you.

  6. I have a friend who has had an accident at work and had to have his leg amputated, the opposition have admitted liability and responsibility. they have bought him a bungalow but are now refusing to modify it so that he can live there. he is currently in a 2 bed terrassed 2 floored house and as such his remaining leg is suffering. this has been on-going for 3 years nearly and I am really worried about the long term prognosis if he is not able to use his wheel chair throughout his house. Is there anything we can try to speed up the renovation to make it livable in?

    • The fact that the defendants have paid for a property for your friend is a good thing. Has your Friend’s Solicitor liaised with the defendant insurers regarding the need for any settlement value to include a sum for making his home suitable for the needs that his disability presents?

      When settling a claim for compensation, the valuation of a settlement is made up of many things. The various elements of a compensation settlement will include a sum for the injury – based on medical evidence and long term prognosis, how it effects day-to-day life, loss of income, medical costs and fees needed to make suitable alterations to living space. With this in mind, your friend needs to speak with his Solicitor to see if that element has been included in whatever compensation settlement he has already received.

      The other area that he can consider investigating is with the Government and Department of Work & Pensions to see if there are any grants or disability benefits such as industrial disablement benefit that would provide any contribution towards the costs of door widening, stair lifts and bathroom alterations.

  7. I received an interim payment of £1000 and they took 25% and the ATE payment which left me £550.01p should they have deducted this from interim payment or from the final settlement?

    • Whether the deduction is taken at the end of the claims process when your full and final compensation claim settlement value has been agreed or if the deduction is taken from an interim payment, the end outcome should be the same – that you only pay a maximum of 25% from your compensation settlement towards the cost of the claim (with the additional cost of any ATE policy also deducted).

      In your case, you should not face any further deduction for the ATE premium as this has now been settled. You have paid 25% from your interim payment and will have to contribute up to 25% from the remaining settlement that you receive.

  8. Hi there
    If I received an interim payment before my settlement would the interim payment be deducted from my full amount?
    Thanks

    • The answer is yes. It is not uncommon, particularly in cases where the level of damages is more substantial or where there is a large loss of income, for a defendant to make an interim payment to the claimant when they have admitted liability in the claim. In admitting liability, a defendant agrees that they are responsible and will therefore make a settlement to the claimant as a result of the accident and injuries sustained. The claim then moves on to evaluating the total losses and level of injury.

      An interim payment will be made to help ease the clients suffering whilst they recover or to help cover lost wages and when it then comes to agreeing the full and final settlement, any previously paid interim settlement will be included in that total figure.

      For example, if an interim payment of £5,000 was made to the claimant and the full final settlement value was agreed at £20,000 the claimant would only have a further £15,000 to receive as the interim payment received is part of that final settlement.

      There is of course the obligatory 25% deduction required by law to factor in to the total settlement you will receive.

      I hope this explanation helps!

  9. Hi,

    Should the solicitor deuct the 25% and the ATE policy funds from an interim payment that has been made right before the court proceedings?

    • Justin

      They will deduct the 25% from your settlement when it is made, whether or not that is taken from an interim payment is another matter. It really depends on the size of the interim award.

      The most important thing is to make sure that the full deduction from the full and final settlement award should not exceed the 25% figure, but that will not include the sum that is also needed to cover the ATE policy that was put in place to protect you.

      Sadly, under the LASPO Act 2012, claimants in your position are not able to claim payment of costs for ATE policies. Prior to LASPO 2012, ATE premiums were recoverable and claimants could retain 100% of any award made to them.

  10. Had rta last friday been diagnosed by gp in regards too whiplash and possible trapped nerve was passanger in work vehicle when another van crashed into us ive also been referred for pysio by my gp also struggling with nerves since accident

    • Damian

      Hi, this sounds like a painful situation for you and I am sorry to hear about your recent traffic accident. On the basis of your Doctor’s diagnosis I believe you have a valid claim for compensation and as such, should pursue the same.

      Please call us on 01225430285

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