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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 was in a bad car accident 1 year ago I was a passenger I suffered muitble face lacerations. my eye lid needed stiches and suffered a spine injury I have now seen the spine specialist and need a operation I had £3000 interim 4 months ago, can I request another one?

You can request a further interim award and you should discuss that with your Solicitor. There is no obligation for a defendant to make interim awards but given the severity of your injuries and the impact on your ability to earn as normal, it is reasonable to request a payment and likely that you will obtain one.

I was offered an interim payment but I was then told that the client was declining it due to me seeing their psychiatrist first?

It is likely that they simply wish to know what the report of the psychiatrist will hold before deciding on the interim and final settlement awards.

If liability is admitted, 2 interim payments are paid, then the defendants say it was your fault, do you have 2 pay back interims?

If the defendant had uncovered evidence that showed you had mislead the claims process and that your actions had lead to them admitting liability where they would otherwise have denied it, you would have to repay any settlement and could face legal action.

If however, the defendant has now changed their mind and wishes to withdraw their admission, they will need to provide strong evidence to support such a change and you should discuss that, along with the previously provided interim awards with your Solicitor.

There is no set rule for such payments, but if the fee was due on the 8th, your Solicitor should be chasing it if it has yet to arrive with them.

I have had an interim payment & the solicitor took off their 25%, is this correct procedure? I’m still waiting for final settlement figure.

So long as the total deducted at the end of the claims process does not exceed the agreed amount (usually 25%) of the total compensation, then their deduction from the interim award is correct.

My solicitors as taken 15% off my interm payment before I get my medical why have they done this i tbought that they would do this after the settlement as been accepted is this right?

So long as the total deduction from the interim and final settlement does not exceed the amount you agreed to in your Conditional Fee Agreement then your Solicitor is acting correctly.

If a company has admitted Liability in a personal injury claim and I have applied for an interim payment, how long should it take for them to agree or disagree payment?

Even in a case where liability is admitted, a defendant is not obliged to make an interim payment, unless directed to do by in a court judgement. However, in cases where liability is not in dispute, it is usually possible to obtain an interim award. A defendant will usually respond to a request for an interim award within 15 working days and if they then agree to a payment, that should follow fairly quickly afterwards.

Hello,
How is the interim payment calculated?
Is it a set percentage from the final settlement?

I ask these questions as I haven’t requested for an interim payment as I am still receiving a full pay packet, and they haven’t supplied me with the final settlement figure.

I had a low impact car accident[10th Nov 2019], and the 3rd party agreed full liability within the next day, the injuries I had suffered are damage to both knees(which an MRI scan shows the damage and may require surgery) whiplash which is lasting longer than 5months, and lower back pain which has eased a lot but isn’t like it was before the accident.

I have had a medical provided by my solicitors who states I should recover all injuries by 5months. Which isn’t the case, How much would you recommend I should receive?
They have offered £2,500.00 which I believe is very low (this was from my solicitors after the medical). I rejected pending MRI from my own private health care.

Hope you can help answering the questions as I have never done anything like this and its all totally confusing.

As you may appreciate, without having full sight of medical records and the opinion of both a medical expert or expert Counsel, it is not possible to offer specific claim values. However, it would appear that your view of the offer being low is one we would agree with. Therefore, awaiting the outcome of the MRI scan you mention is a prudent move.

In terms of interim awards, there is no hard and fast method for calculating the amount that can be obtained. An interim award is not something that you can enforce, but instead you can request the same when liability is admitted. In cases where the full extent of an injury or loss is not fully appreciated – such as your situation, a defendant may make an interim payment to assist a claimant who may be in financial hardship as a result of the injuries sustained or may require specific equipment or therapies etc. In most cases, a Solicitor acting for a claimant will discuss the appropriate interim payment ‘offer’ to make to a defendant with the claimant and it would usually be for cost of living expenses or some lost income or expenses.

The amount of any interim payment will be included in the final settlement value. For example, if a claimant was given an interim award of £1,000 and the final settlement value was £10,000, the final payment would be £9,000 as £1,000 had already be awarded. Interim awards and final settlement values will be subject to the 25% deduction agreed in the Conditional Fee Agreement signed when instructing the Solicitor on a No Win No Fee basis.

I tore my ACL and meniscus in my left knee on the 20/10/19 in work due to accident. My company has accepted liability and I am currently awaiting a operation for ACL reconstruction and meniscus repair. I am currently on company sick pay which is literally just above SSP so my money situation is bad. Looking forward at present I think I’m looking at operation and recovery time going past another 12 months minimum. Would I be eligible for any interim payments as I’m used to bringing home £1800 p/m and gonna be a while before I get that again.

Do you have a Solicitor acting for you in your claim for personal injury compensation? If so, they should be enquiring as to the possibility of obtaining an interim award – perhaps some loss of earnings etc. As liability has been admitted, there is a possibility that you could get such payments. However, there is no legal requirement for interim payments to be made.

If you are not currently represented by a specialist personal injury Solicitor, please call us on 01225430285. Our No Win No Fee service can help you instruct a specialist Solicitor to ensure that your legal rights are upheld and that you are appropriately compensated for your injuries.

My accident was over 2 Christmas ago I’ve still not received a interim payment even tho my solicitor has stated they received it and were awaiting it to clear! Should I have received this by now also he is saying that I can’t get my loss of earnings even tho I’ve provided everything! I’m very unhappy with the law company’s service and lack of communication with me.

If your Solicitor has received your interim award, there should be little delay in them then forwarding payment to you. Of course, you need to allow payment to clear with them and be processed, but that should not take too long.

Hi,

I have an ongoing personnel injury claim, the injury was in 2016 and I appointed the solicitor in 2017. I ruptured the UCL ligament in my thumb on my dominant hand at a work event, they admitted liability very early on (in 2017). I’ve been offered an interim payment of £10,000 but not yet received it. My question is, are my solicitors supposed to deduct 25% from my interim payment? As I’ve been getting conflicting information from my barrister and my solicitor and now have no idea where I stand with this.

Also, am I able to request a mediation meeting between the two sides rather than going to court? As liability was admitted at such an early stage, all medical reports have been attained which the defence is not contesting, I’ve been granted the interim payment and recently at a Costs and Case Management Conference both sides stated that this could be dealt with in mediation rather than court. However, I feel that my solicitor seems to be much more focused on going to court than settling this with my best interests in mind, I’m concerned that this may be due to their fee’s being 5x as much if it does go to court. I’m not concerned about my case going to court but rather more concerned with the time frame, this has been ongoing for several years already and the court date is set for April 2021, I feel if this can be resolved now through mediation it should be. Unfortunately I have very little faith or trust in my solicitor due to past mistakes with my case, what would you suggest in my situation? Should I push for mediation or allow it to go to court?

Many thanks for any help you can offer!

As you will appreciate, it is not possible for us to comment on the actions of your Solicitor in terms of whether or not they are acting in your best interests. Whilst your concerns about the court route are understandable, your Solicitor is most likely to be of the view that you will receive the best outcome by taking that course of action – or at least keeping it on the table.

If you are not happy with your Solicitors actions and feel that the handling of your claim should be reviewed, you should refer to the complaints policy of your current Solicitor and allow a senior partner within their firm (who has not handled your claim), to review the work undertaken and respond to you.

With regards to the deduction from your compensation, the Solicitor should not deduct any more than a maximum of 25% of any compensation awarded to you IN TOTAL. That should include the interim award and your final settlement. Should any element of your final settlement include future loss of income or future medical costs, there should be no deduction from that part of your claim.

I have requested a interim payment and they said I have to attend a medical. I don’t understand why, as they have accepted liability already! Why have they requested this as my injuries are very serious?

The defendant may well have accepted liability – that is them admitting that their insured was negligent and that they are therefore liable to compensate you for your injuries and losses. What they now need to do is to gain an understanding of the severity of your injuries and the longer term prognosis for your recovery or otherwise. The only way to do this is to have an assessment by an independent medical expert. The expert will provide a report that can then be used to reach a fair settlement valuation for your claim. You have nothing to fear by attending a medical, indeed, if you are severely injured, a medical experts report will benefit your claim and your settlement.

Hi I have been waiting 2 years so far. I suffered a car crash with, back, bowel and psychological injuries. My claim is still ongoing and am beginning to feel the strain on living of disability benefits since the accident. I have to see further specialists this year and doubt that a settlement will come anytime soon. Would you think an interim payment be made in these circumstances?

Yes, if liability has been admitted in this claim, you could request an interim payment.

Hello,
I have been waiting three years now to settle my case after being injured in a gas explosion. My solicitor contacted me today and asked me to request a £5k interim payment, I said I had no requirement to request the money up front and he then said could I at least agree to £1k upfront. I feel like there’s more to this than they are telling me what are the pros and cons of requesting an interim payment? And why after all this time are they suggesting it now? Thank you

Interim awards are usually requested when a claimant is in dire straights financially and needs some funds to enable them to continue to ‘survive’ before final settlement is made. As to why your Solicitor wants you to request an interim award, we cannot say – but you should question them!

Hi, I had been offered interim settlement of 5% of the maximum benefit which insurer said would be £10000. So it’s £500 for interim settlement paid now. I understand interim settlement it’s or should be little amount to help with day to day expenses. I was 6 months of work and have a lots of debts to pay now and I don’t feel like £500 would help a lot. Can I refuse or negotiate for let say 10%? I haven’t got solicitor and this is a time to get some involved I think. I’m not accepted anything yet.

You mention that you do not have a Solicitor representing you. Whilst you appear to have reached a point where the defendants have admitted liability in this matter (which is a good achievement), it is now clear that you would benefit from having specialist legal representation to ensure that your rights are protected and enforced in full. Whilst instructing a specialist Solicitor to act for you would see you signing up to a No Win No Fee agreement that would mean you would contribute up to 25% of any award made to you, it would still represent the best way forward given the appropriate professional and qualified representation you would receive.

You can negotiate on interim and final settlements and you are wise to not accept anything at this stage.

If a company admits liability, then your solicitor asks for an interim payment, what if you then lose the case, do you have to give the interim back? Thanks.

An interim payment will not be made unless an admission of liability has been made by the defendant in a claim.

I went to court 2 weeks ago and won liability against my employer for my injury. The judge ordered that my employer pay a £20000 interim payment until settlement is agreed.
How long have they got to pay the interim payment to me?

If the Judge in your case did not prescribe a deadline, it would be reasonable to assume that the interim settlement should be awarded within 3-5 weeks of the date of the hearing.

My solicitor has agreed a settlement and I will get paid in 2 instalments. Is it fair that my solicitor takes out all her fees owing on the first instalment?

Of course, it is reasonable for a Solicitor to deduct their fees, but in most cases a Solicitor will work with the claimant to ‘share’ the burden of waiting for settlement to arrive.

How long can it take after court order to pay out the interim payment and on my interim payment, can my solicitor take a deduction from the monies?

In most cases, once an order has been made from the courts, receipt of funds should be fairly speedy. If there is no specified timescale made in the order, we would anticipate you should have the interim award within 3-5 weeks.

With regards to the deductions from an agreed personal injury settlement, a Solicitor may make a deduction from both the interim award and final settlement. This is fine, as long as the total deduction does not exceed 25% of the total settlement and the cost of any provided ATE cover.

Can a second interim payment be made by defendant without medical records?

It is unusual for a 2nd interim payment to be made, but it can be requested and received.

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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