Periodic Payment Orders Update
16 January 2013
Category: Legal Updates
The Government’s approval meets a commitment to reform the law in this area as outlined in the Programme for Government.
The Minister noted that "there has been much debate in recent years as to the appropriateness and adequacy of lump sum awards in cases of catastrophic injury. Assessing damages in such cases is difficult given the uncertainties affecting assumptions made as to the person’s future circumstances and issues such as investment returns and inflation rates.
The danger with the lump sum approach, which is the current method of assessing damages in such cases, is that it can lead to situations where a person is over-compensated or under-compensated. Under the lump sum approach there is no recourse for a plaintiff who may exhaust his fund by exceeding his life expectancy perhaps owing to advances in medical science. Similarly, there is no recourse to a defendant where the plaintiff dies before the time originally projected and the remainder of the lump sum becomes, in effect, a windfall for his or her family.
I believe that the introduction of an appropriate and effective scheme of periodic payment orders will address this issue and will further the interests of justice. It is, of course, vital that any such scheme must ensure the continuity of payments to the plaintiff. Where the State has such a liability, security of payment is not an issue. However, in the case of private defendants, usually an insurance company, the matter is more complex and will require the establishment of a financial infrastructure to ensure continuity of payment, whilst ensuring that the State’s position under any such scheme is fully protected."
According to Mr Shatter, the drafting of the General Scheme of the Civil Liability (Amendment) Bill will commence shortly and will take account of the recommendations of the Report of the High Court Working Group on Medical Negligence and Periodic payments. Since the Working Group’s report was published in October 2010, the final settlement of many catastrophic injury cases has been put on hold pending the introduction of legislation. At this stage, there are a significant number of claims awaiting final resolution by means of a regime of periodic payments.
The main challenges associated with the introduction of Periodic Payment Orders relate to the security of payments from non-State entities and the issue of indexation of payments. It will be interesting to see how these issues are dealt with in the new legislation.
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