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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...

Why are loss of earnings not paid on a monthly basis once admission of liability has been admitted by the 3rd party?
I had a car crash back in February and haven’t been able to work since due to my injury. I am now in a position where my SAP has come to an end and I am having to apply for benefits. My financial situation is that I am now facing voluntary bankruptcy because I am unable to cover my mortgage, loans, credit card etc. and my credit rating has been severely affected due to credit agreements, late and missed payments.
I am suffering additional mental health issues because of the stress my financial situation is causing me but despite my best efforts my solicitor has only been able to secure a £1,000 interim payment.
An accident that wasn’t my fault could essentially leave me destitute and homeless. How is this fair?

The situation in which you find yourself is anything but fair and as you rightly say, your predicament is no fault of yours.

Sadly, the framework within which personal injury defendants operate does not compel defendants to immediately cover loss of income once an admission of liability is obtained. Have you discussed your situation with your Solicitor?

It would be prudent to do all you can to avoid bankruptcy as it is likely that you will receive a sizeable settlement in due course and if you can liaise with your creditors and provide evidence that your claim has liability accepted, they may be willing to place a freeze on any repayment requirements.

I was offered an interim payment in May, yesterday I discover this is conditional on the defendant seeing the 2 expert’s reports. For seven months I have requested a second opinion from another psychologist, even if I fund this, but my solicitor was not forthcoming. I can barely read the report without having my “trauma” triggered & I know this report will damage my case. Yesterday my solicitor writes giving me the info required to seek a second opinion BUT she also said we would need to request an extension of time from the defendant, hence alerting them that there is an issue. I feel backed into a corner and believe my solicitor should have offered me this seven months ago, when I asked & asked. Had I received another opinion at that time this would not have impacted on my claim other than the information held within. I need advice as to how I can move forward without damaging my claim. Thank you

Without knowing the ins and outs of your claim the contents of both reports and the reasons given by the defendant re their request to see both reports, it is impossible to advise you and we would suggest that your Solicitor (who must act in your best interests) should be entrusted to ensure the best outcome for you.

Clearly, there are some discrepancies in some way between the two reports and this is likely to impact claim valuation and it is probably for that reason that the insurers wish to view them.

If you are not happy with your Solicitors conduct, you should initially formally complain to them. This will see a senior partner within the firm – who has not had any conduct within your claim – review the work undertaken. If they uphold your complaint, they will have to resolve the situation and put any wrongs right. If they do not uphold the complaint, if you are unhappy with their response, you can escalate a complaint to the regulatory authorities and the ombudsman.

Started my medical neg claim in 2015. Hospital accepted liability Nov. 2020.
I was told I could have an interim payment but then I was told it was conditional and I have still not received any thing.
I am far from happy about the way I am being treated or should I say mistreated again.

Please can you advise me what is an average time to wait for an interim payment after acceptance of liability.

Thank you

There is no obligation for a defendant to make an interim award when dealing with a claim for compensation. However, when liability is admitted, it is more likely that an interim award can be obtained. In your case, if the defendant has accepted paying an interim amount and the amount has been agreed, it should be with you fairly quickly thereafter.

My solicitor have requested an interim payment and the request has been accepted,I had to tell them how much I wanted, how long will it be before I receive the interim payment? also is it paid by cheque? and is it paid direct to me or via my solicitor? thank you

The interim amount should be paid to your Solicitor who will then in turn, forward settlement to you. This is likely to be paid to you via bank transfer.

The insurers have sent an interim payment to my solicitors and the solicitors are processing the payment tomorrow, will this be an instant payment into my bank or will it take a few days ?

Whilst it may take a few days to be processed, it shouldn’t take more than that.

Good Morning,

I was involved in a car accident 2 years ago. I have been through lost of treatment for my back and also physiological treatment.

I have nerve damage in my back, I had some tests done on my back at a private hospital and the results was quite encouraging. Moving forward the Dr suggested I should have the treatment done at cost of £5800. The insurance company offered me an early settlement offer of £15000, I politely declined the offer as I haven’t had the final treatment. Recently the insurance company have decided not to pay for the treatment but offered me an interim payment of £6500. To be taken off my final settlement figures. My worry is if the treatment doesn’t work would the insurance company offer another payment for further treatment? Also would this come off my final settlement fee or would it be set aside for medical costs?

Kind Regards,

Lewis

If you accept an interim award, the amount provided will be included within your total settlement, so when final settlement is paid, any interim payment will be deducted from the total agreed. Whether or not the defendants would agree to further medical or rehabilitation therapies if the proposed treatment does not resolve your symptoms is unknown, much will depend on the agreement on any medical experts report and recommendations.

Thanks for your reply Ian.

How long do the third party have to accept or reject such an application ?

Regards

There is no specific time frame for agreeing to an interim award, but such a request is usually dealt with pretty quickly – within a few weeks.

I have been waiting 6 weeks for a decision on a interim payment and my solicitor has sent multiple requests and still heard nothing.

I am struggling financially and have been out of work two years after a car crash while I was stationary.

This caused multiple injuries, had spinal fusion and it’s been 7 months and no improvements and the spinal surgeon says there is nothing more he can do unfortunately.

There is no guarantee that an interim award will be paid by the defendant as there is nothing to compel a defendant to make an award of this nature even if they have admitted liability. However, in cases where liability is not denied and injury symptoms are serious with considerable impact on a claimants ability to earn, it is usually the case that interim payments will be made.

Again thank you for your reply, yes the defendant admitted liability immediately, he was travelling in a van in a 40mph road and I was stationary in traffic on a small bend. He ploughed straight into my vehicle and after he said that his foot slipped of the clutch which I don’t believe that at all but anyway he admitted liability to his insurance company that same day. On your reply about a judge helping to secure a payment that is something I will ask my solicitor today and I really appreciate your advice. Thank you

Good luck with your claim and thanks for sharing your situation with us.

Thank you kindly for your response, I have been out of work as a managing director for two years and I am in a very serious as I struggle with day to day tasks. I can’t walk to long and I struggle to get out of bed too, my wife helps me wash and using the toilet is very difficult. The pain is consistent day and night but the pressure builds up as the day goes on and by the time it’s afternoon the pressure is very intense and I struggle to do anything. I had spinal fusion 8 months ago and all symptoms has come back as before. I have been awarded Personal independence payment and been assessed by two different companies to obtain both elements. I can’t climb stairs very well and even standing to long without adjusting my position hurts. Pain and pressure in my lower lumber area is constant and I am struggling financially. All this information has been passed on by my advocate and I applied for the interim payment in the end of July 2021. My advocate has sent three chasers to the third party but still no response.

Given the obvious severity of your injuries and the clear impact that it is having on you physically and financially, one would expect a defendant (if liability is not in dispute) to agree to a reasonable request of an interim award. Have you discussed with your Solicitor the option of putting a request for an interim award before a Judge?

My injury happened over two years ago, all medical reports have been done, one of the symptoms was diagnosed as ptsd im still suffering with anxiety when driving as my job is hgv. My doctor signed me off for two weeks I’ve sent the fit note to my employer, I’ve already had an interim payment of 1000 a long time ago and I’m still waiting for a decent offer, my solictors have valued my claim at 14000. Will I be entitled to another interim payment ? My claim is currently at the directions questionaire.

There is every possibility that you would be able to obtain a further interim award and you should discuss this with your Solicitor.

I am year in to my claim and have not been able to return to work due to the injurys the person responsible has accepted liability as it happened at work. I was self employed so I’m not getting paid. Do I qualify for an interim payment? My solicitor is saying we have to wait till medical reports are in before we can apply for a interim payment.

You don’t necessarily have to wait for the medical reports, but it would probably be a sensible move to await them if you can hold off. There is no obligation for the defendant to make an interim award, but given the fact that liability has been admitted, it is usually something a defendant will agree to – so long as the interim amount requested is not excessive.

My interim payment has been refused by the defendants. However my solicitor has offered my medical records to them in exchange for the interim payment. Is that a positive move and what’s the reasoning behind this do you think please?

Defendants have no obligation to make an interim payment, but where liability is admitted and injury severity understood, it is usually possible to obtain such a payment.

In this case, your Solicitor appears to be providing evidence of the injuries and severity to the defendant. This should help to indicate to them the potential value range of an approximate final settlement and they may then feel more comfortable in releasing an interim award to you.

Hi again Ian
Thank you for the last message it was very helpful.
I have spoken to my solicitor who states he will ask for 5000 interim payment. Is this a reasonable amount considering I’ve had no income from work for over a year now and I’m unlikely to be able to work in the near future. Also we have bills and debts mounting up since I had to finish work and the amount exceeds the £5000 that my solicitor is asking for.

Have you asked your Solicitor if they can attempt to recover your loss of income for the previous year as an interim award?

I was involved in a car accident two months ago and instructed a solicitor at the beginning of February. The letter has been sent off to the insurance and a interim payment of 30k has been asked. (Suffered facial and serious spinal injuries) they have 21 days to accept liability and agree to the interim payment. How long would you have a guess to that I will receive the interim payment?

I am currently off work for many months living of SSP!

Thank you for your help.

There is no legal requirement for an interim payment to be made, but if liability is admitted it is usually something a defendant is willing to provide. In this case, if the defendant were to admit liability and agree to an interim payment being made, from the date of the agreement, you would expect payment within 21 days in normal circumstances.

I won my case a while back, i’ve had two interim payments of £5k each in the past 2 years. This week I was informed I need quite alot of therapy which mounts to £17k, I also this week had an interim payment of £30k but most of it is being held to pay for this therapy which if course is understandable.

I know any interim payments come off the final settlement so does this mean that I’m paying for all this therapy myself or can I claim in back?

Thank you, Ian.

The costs of the therapy should be part of the total settlement agreement. It would seem that the recent interim payment is made to fund the rehabilitation therapies rather than direct compensation for you (if you understand). When your Solicitor agrees final settlement, the total value agreed should reflect the costs of therapy too.

Thank you, Ian

You’re welcome.

I have asked for an interim payment because my claim could take up to a year due to the severity of it the insurers have accepted liability but its been 7 weeks and my lawyer keeps saying she’s continuing to pressure the insurers for an answer. Is this normal? I was told i would have an answer within the first 3 to 4 weeks and hopefully have a payment in 7 to 8 weeks, and as i say its been 7 weeks with no answer, i cant even work because of my injuries.

Your situation is sadly quite common. There is no obligation on an insurer to provide interim payments – even when liability is admitted.

Hi,

I’ve been told by the claims company I am dealing with that I will be offered an interim payment by the defendant as an offer could not be settled, although I have not requested one.
This means that there will also be court proceedings to reach a settlement. Does this sound right to you?

Thanks

I assume that liability has been admitted – that is that the defendant has agreed that they will owe you settlement – but that they cannot agree on the settlement value? If so, what you describe seems correct.

I have a personal injury claim ongoing where liability has been accepted by the defendant, save causation. Am I entitled to an interim payment please?

No claimant is automatically entitled to receive an interim award. However, where liability is admitted, the possibility of obtaining such a payment increases and can be requested by a claimant and their Solicitor.

In your case, as causation is not yet agreed, there may be quite a bit of wrangling over the potential value of your claim. As such, the defendant may be reluctant to provide an interim settlement, especially if the amount requested is substantial.

There is no harm in making a reasonable request for an interim award – perhaps to cover some loss of income or some living expenses/rehab therapy costs etc from the defendant.

Once you’ve requested an interim payment how long do they insurers have to contact you back and make a decision, and if it’s a yes, how long does it take to receive the money in your bank?

There is no prescribed timeframe in such circumstances, but one would usually expect a response within 3-4 weeks. If an interim award is agreed, payment should be with the claimant within 21 days or so.

My son has been given an interim payment, but my solicitor is holding it in there bank, they say, they can’t legally release it untill I become his deputy. But the judge and the other side issued it to my son. Is my solicitor right, or should my son receive the money?

It would appear that your Solicitor is acting correctly in requiring relevant paperwork to be in place before they release the funds provided. This should be easily resolved and your Solicitor would be able to help you through the process to enable them to release the funds.

I was offered an interim payment back in November 4th 2020.
I still haven’t receive this how long do you think I may have to wait for the payment and do I put it all on my care or do I use it for both my care and bills?

Thank you for you help.

Usually an interim award would be with the claimant within 4-6 weeks of the agreement to make such an award.

In terms of what you use the award for, that is up to you. However, should you continue to need further care and fall behind with costs and bills, keep a record and your Solicitor will seek to recover as much as is legitimately possible via your special damages claim as and when you settle this matter.

Should my solicitor have automatically taken 25% from my £3,900 interim payment?

The Solicitor is allowed to deduct up to 25% of the total settlement value – as they have already taken 25% from the interim award – which is allowed, they must include that sum in their final calculations. So long as they don’t deduct more than 25% of the final total (the interim value plus the final settlement) then that is acceptable.

How long after a letter of interim payment will I receive my cheque? My solicitor says 1-2 weeks but not heard anything for a while

It would normally be expected within 3 weeks or so of the receipt of agreement to make such an award. However, due to many staff having to work remotely, some processes are slower than normal and this may explain the delay in your case.

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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