Improved compensation system under threat

An improved system of compensation for people who suffer catastrophic injuries is under threat due to claims by victims for additional payments and special damages, according to the State Claims Agency.

The SCA has warned a provisional system of Periodic Payment Orders (PPOs) — whereby injured parties are paid a series of lump sums over a number of years based on their ongoing needs — could face a “radical re-think” because of a growing number of compensation claims for accommodation, technological assistance, aids and appliances.

The director of the SCA, Ciaran Breen claimed the emergence of “unnecessary disputes” with lawyers representing victims was resulting in ongoing mini-trials and associated legal costs.

The SCA, which is responsible for the management of personal injury damage claims against the state, has recently begun settling a number of cerebral palsy cases on a suspended PPO basis. It replaces the older system of victims being awarded a once-off lump sum payment by the courts which was calculated on the basis of certain assumptions including the projected future cost of care, the patient’s loss of income as a result of the injury and their life expectancy.

Legislation to place PPOs on a statutory basis is due to come before the Oireachtas later this year. Such a system has already been in place in Britain since 2005.

High Court judge, Mr Justice John Quirke, who chaired a medical negligence working group which endorsed the introduction of PPOs in Ireland, claimed they were “infinitely better” than once-off lump sum payments.

“The fact is that no parents should have the worry into the future of how their brain-damaged infant will be cared for,” said Mr Breen in the latest edition of the SCA’s newsletter. He claimed the move from traditional lump sum payments to PPOs represented “a significant move forward in the area of personal injury compensation”.

However, Mr Breen said problems had begun to emerge which threatened the future of the new system of awards. “In fact, if these issues are not amenable to being resolved with plaintiffs’ lawyers without the need for ongoing mini-trials concerning these issues, with all of the attendant legal costs, a radical re-think of PPOs may have to be considered,” said Mr Breen.

The SCA, which operates as part of the National Treasury Management Agency, has also criticised high legal costs in clinical negligence cases.

The SCA’s annual legal bill rose from €8m in 2007 to €30.1m in 2010.