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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...

How long does it take to get a interim payment once applied for?

The process of receiving a response to a request for an interim award from a defendant would usually be somewhere between 2-4 weeks. If the response is positive and an agreed interim settlement value is reached, one would expect to receive the interim award within 3-4 weeks of the agreement on the value.

Hello,
I was involved in an RTC in Feb 2019. I was a passenger and occurred multiple injuries I have been sent a form from the insurance asking to confirm if I will accept the Interim payment offer of £1000. My question is, if I refuse what will this do to my overall claim? Will it affect it in anyway?

Is there any reason why you would wish to refuse the interim award? An interim award is usually an amount that is far smaller than the expected settlement and is made to simply help the claimant cover some out of pocket expenses caused by the incident. Refusing the interim settlement should not impact on your claim but you should certainly discuss this with your Solicitor before you make any final decision.

Can I get an advance on my personal injury claim?

You cannot obtain an advance on a claim for personal injury compensation. Such payments are not allowed and would contravene regulatory restrictions.

You can however seek to obtain an interim payment from a defendant should your claim succeed. This would apply once an admission of liability has been obtained by your specialist Solicitor and before the full extent of the claim had been fully agreed.

I’ve been offered 11.500 for injury and anxiety after my solicitor asked for interim payment. Should I take first offer?

Without knowing the full facts of your claim (something we would only know if we had full sight of the file and medical reports etc), it is not possible for us to comment on the appropriate valuation of your claim. However, it is not uncommon for a defendant to make an initial offer at the lower end of the appropriate claim valuation range. As such, you should discuss the offer you have received with your Solicitor, to see if they feel that it is a reasonable offer or whether or not you should reject it and hold out for a better settlement. My gut feeling is that you should reject the offer (unless your Solicitor says otherwise) as you would probably receive a better offer after negotiation.

I was injured and have claimed on the afcs.
I received an interim payment of £6000 and was told this would be reviewed in 12 months. Which takes me to now.
My injury hasn’t been ‘cured’ as such. Hip injury and I am still doing intense physio.
I am curious as to whether I will be likely to receive another interim payment as the extend of injury has not be discovered yet as treatment is ongoing.
Also, how is interim payments calculated? Would I be expected to receive the same when the claim is settled or less (minus the interim of course)?

It is uncommon for more than one interim payment to be made, but it is not impossible to receive a 2nd interim payment (or even additional ones) should it take a long time to fully evaluate an injury and loss to reach a final settlement value. Have a read of our hip injury article for more info on compensation amounts.

Should an interim PAYMENT be agreed is there a limit on that amount while final figure is still to be agreed?

There is no prescribed limit for an interim payment or award in a claim for personal injury compensation. Of course, a defendant will not fund an interim settlement payment that is likely to exceed the total value of the final settlement. In personal injury compensation claims where an interim payment is made, the value of such a payment is usually relatively low and it is common for an interim award to cover an element of agreed loss, such as incurred travel expense or loss of income caused by the accident that lead to the claim.

Once applying for a court date for interim PAYMENT claim, what is the length of time from application to court date?

There is no prescribed timescale for court date provisions. It really depends on the amount of work the court has to deal with and how busy that particular court is.

Can you have more than one interim payment while waiting for the full settlement?

Yes, it is possible for more than one interim payment to be made during the claims process, although it is unusual. Such incidents would usually occur only in claims of higher value where establishing the full extent of injuries, and subsequent value of the claim will take longer than usual.

My partner fell over in a supermarket 6 months ago. Broke her kneecap in two. She has been unable to work since as she underwent major surgery, her kneecap was wired back together. On cruches and unable to drive. The company has admitted full liability, and agreed to pay an interim payment. Her solicitor asked what minimum she would take. She said 2k, thinking on this would it be too much to ask for her lost earnings from last six months. We are struggling without her income, had fallen behind with rent, thanks parents, and likelihood of her being able to return to work anytime soon seems at best a fantasy.

Thanks in advance.

If liability has been admitted, then it may become possible to agree with the defendant that they will make an interim compensation payment for the loss of income incurred since the accident. However, before such a payment will be agreed, the severity of injury must be agreed by the defendant. This is because they will need to agree that the injury warrants such a long period of lost income. Of course, with the type of injury you describe, there is most likely to be permanent implications as a result of such damage. Such injuries are typical in slipping accident compensation and as long as a medical assessment has been carried out and the report agreed to, an award such as the interim payment you suggest is not unreasonable.

No legitimate personal injury specialist working within the United Kingdom personal injury legal system will make up-front payments in any claim. Compensation will only be awarded when a defendant insurer has admitted liability and agreed to the level of damages to be paid. Although the Police appear to have assigned fault in this matter, that does not guarantee that a defendant insurer will admit liability.

I have received an interim payment from my solicitor in cheque format. I would like to know if I were to cash this cheque, would that potentially close my claim to anything else? Or as many replies have mentioned, it’s just a partial payment that may have to be paid back if the court awards me less?

I’m guessing that because my solicitor has already accepted this money from the insurance company. That it’s ok to cash from their account into my account.

It is absolutely fine to cash the interim payment you have received. An interim payment is only made after liability has been admitted and the insurers will not have paid an amount that they believe to be anywhere near to being greater than the final value of the claim settlement. Therefore, when your claim is settled in full, the amount of the interim payment award will be included in the total and considered already paid. For example, if you have received an interim payment of £1000 and your final settlement value was agreed at £3000, you would receive a final settlement of £2,000 to make the total of £3,000. Of course, you would also face a deduction from your settlement of up to 25% towards the costs of the claims process.

My solicitors have already deducted their 25% fee from my interim payment of £2600. Are they allowed to do that? Their words in the letter are “an interim payment equivalent to their final offer. We will now go to court and hope to get you some more”

This doesn’t sound like normal practice for an interim payment let alone normal professional practice to go to court and hope to get more.

Thank you for your swift and informative reply.

If you get accepted for an interim payment how long does it take to process?

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).

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.

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.

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.

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.

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!

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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