Civil Liability (Amendment) Bill 2015 - Proposed Legislation dealing with Periodic Payments

The Report of the Working Group on Medical Negligence and Periodic Payments published in 2010 described the current method of awarding damages for future pecuniary loss in a single lump sum as “inadequate and inappropriate” where the plaintiff had been incapacitated and required care and treatment into the future. 

In response to this, the Government recently published its proposed legislation dealing with Periodic Payment Orders (‘PPO’). It is envisaged that a Court could award the cost of future care of a plaintiff in the form of index-linked annual payments in circumstances where the plaintiff has suffered severe injuries and will require treatment and assistance in the long term. 

A PPO can only be made in cases of ‘catastrophic injury’ which is defined in the Bill as ‘a severe injury, involving serious impairment, the direct and proximate causes of which require the plaintiff to receive life-long, permanent care and assistance.’ A catastrophic injury is not a financial threshold that the plaintiff has to meet but is measured against the plaintiff’s injuries and the requirement for lifelong care and attention.  

It is proposed that the Personal Injuries Assessment Board (PIAB) Act 2003 is to be amended to enable the PIAB make awards in the form of two or more periodic payments. While the decision to make a PPO is at the Court’s discretion, it is required to have regard to the plaintiff’s injuries and the form of award that best meets the needs of the plaintiff. Where the parties have not consented to a PPO then the Court must have due regard for the parties’ preference for payment and then make a determination that is in the best interest of the plaintiff. 

A PPO will include damages relating to future medical treatment, care and assistive technology and appliances required for such treatment. Provision for future loss of earnings can only be made with the consent of both parties. A Court may also make provision to increase or decrease the amount awarded in the PPO on a specific date or dates consistent with expected changes in the plaintiff’s needs during his or her life but in doing so the Court must set out its reasons to justify why it is doing so.  

In practical terms the draft Bill proposes that defendants, when making a formal offer of settlement under section 17 of the Civil Liability and Courts Act 2004, must include the amount of the offer attributable to future pecuniary loss and set out the relevant portions of that amount attributable to medical care, treatment and assistive technology. 

The draft Bill proposes that the maximum payments from the Insurance Compensation Fund as provided for in Section 3 (4) Insurance Act 1964 would not apply in cases of PPOs.  A plaintiff should be guaranteed the full amount due under a PPO and where an insurance company goes into liquidation, it is expected that the PPO will be paid from the Insurance Compensation Fund. 

The proposed Bill has been forwarded to the Joint Oireachtas Committee on Justice, Defence and Equality, for review and to allow for further dialogue with relevant stakeholders with enactment of the Bill expected later this year. The Minister for Justice and Equality has advised that this draft Bill is part of a broader package of proposed reforms including the introduction of pre-action protocols which will aim to process medical negligence claims more efficiently before and during litigation.

For further information on the proposed legislation on PPO, please contact Louise Holmes or a member of our Litigation team.