14th October, 2021

Chris Melton KC and Michael Lemmy successful in resisting appeal to the Court of Appeal against the making of an interim payment order

Chris Melton KC and Michael Lemmy successful in resisting appeal to the Court of Appeal against the making of an interim payment order. The Court of Appeal gave guidance on the proper interpretation of CPR r.25.7.(1)(e):  The court may make an interim payment order against multiple defendants where it is satisfied that the claimant will obtain judgment against one of them but cannot determine whether or not the claimant will obtain judgment against the others.

On 21st August 2020 the Claimant was working as a labourer on a building site in Swindon when he suffered catastrophic injuries.  He was employed by the second defendant [“YKS”] who were engaged by the principal contractor [“Buttar”] as independent brickwork contractors.

Proceedings were issued on 5 February 2021 and liability was denied by all defendants. On 10 June 2021 HHJ Bird made an interim payment order against YKS and Buttar. 

Buttar appealed against the order on the grounds that the judge had erred: 1) by failing to consider whether the conditions specified by r.25.7(1)(c) were satisfied against YKS before dealing with the application under r.25.7(1)(e); 2) in finding that the conditions in r.25.7(1)(e) were satisfied, as he should have concluded that if the matter went to trial the claimant would obtain judgment against D2 and therefore he could determine which defendant the claimant would obtain judgment against; 3) in finding that the defendants were insured in respect of the claim, as he should have found that a reservation of rights meant that in reality the defendants were not insured; and, 4) in the exercise of his discretion because there was a chance that the claim might fail and the defendants might not be able to recover the interim payment from the claimant or each other because they might not be indemnified in respect of the claim.

The Court of Appeal rejected the appeal and held: 1) the Claimant was entitled to bring the appeal under r.25.7(1)(e); 2) The most natural interpretation of the word "which" in the phrase "but the court cannot determine which" in r.25.7(1)(e)(i) was that it referred to the several defendants against at least one of which the claimant would obtain judgment. If the court could not determine whether the claimant would obtain judgment against D2 alone or D2 and D4 then it could not determine which defendants would become subject to judgment and the requirements of the phrase were satisfied. There was no reason for a narrower interpretation; 3) YKS and Buttar were insured in respect of the claim. The word insured should be given its normal meaning and not be interpreted as meaning indemnified; 4) the judge had considered the possibility that YKS’s insurers would not indemnify and there was no basis for interfering with the exercise of his discretion.

 

The appeal was live streamed by the Court of Appeal and is available to view here.

A transcript of the judgment is available here.

Analysis is available at Westlaw here.



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