Government urged to bring in regulations for periodic payments to catastrophically injured

Helen McEntee said she was preparing the necessary regulations to give effect to the recommendations, including for settling catastrophic injury cases via periodic payment orders. Picture: Denis Minihane.

Lawyers representing people who have been catastrophically injured have called on the Government to urgently bring in regulations allowing for a new system of periodic payments over life when High Court cases are settled.

In recent weeks, the Minister for Justice accepted expert recommendations on a system to pave the way for the new regulations which will ensure regular payments for care over the lifetime of the catastrophically injured will keep pace with inflation and changes in healthcare costs.

Helen McEntee said she was preparing the necessary regulations to give effect to the recommendations, including for settling catastrophic injury cases via periodic payment orders (PPOs). Families and lawyers have been looking for the periodic payments orders system for more than a decade.

While PPOs are considered to be the most appropriate form of compensation, claimants in catastrophic injury cases have been pursuing lump sum payments instead following a ruling by the High Court in 2019 that the indexation rate set out in legislation would result in under-compensation for claimants as it did not take account of wage inflation.

Solicitor David O’Malley who has represented many of those who brought proceedings as a result of being catastrophically injured at birth said there is now an urgent need to introduce the new regulations which appear to be in the offing after 11 years of waiting.

He referred to one case where the parents of a child catastrophically injured at birth had already been back to court four times to receive interim payments. Usually when a case comes back before the High Court for another interim payment, several medical reports are required which means the injured person has to undergo further examination.

Some parents, tired of constantly having to vouch for everything and their loved one being put through medical examinations, have also been opting to take lump sum payments which is a final settlement figure which it is hoped will last the lifetime of the injured person.

Mr O’Malley of Callan Tansey Solicitors said the new system will be good for families, but the next question is how long it will take before it comes into being.

He said: "We would ask for a speedy introduction because families are waiting."

Solicitor David O’Malley said there is now an urgent need to introduce the new regulations which appear to be in the offing after 11 years of waiting.

Marian Fogarty of Cantillons Solicitors in Cork which has been to the forefront of these types of cases, said some parents of catastrophically injured plaintiffs for whom the firm acts would like to see a workable PPO being made available to them urgently.

“As matters stand, they are being deprived of the option of electing for a workable PPO nearly five years after a High Court decision which concluded that a PPO was not in the best interests of the plaintiff based on the choice of indexation by the legislature."

The expert reports presented to Ms McEntee are by the Interdepartmental Group on the Indexation Rate for periodic payment orders and the Independent Expert Working Group set up to advise on an appropriate discount rate for use in catastrophic injury cases.

Recommendations

The indexation rate group recommended the PPO indexation rate should be based on a combination of the Harmonised Index of Consumer Prices (HICP) and Annual Rate of Change (ARC) in nominal hourly health earnings.

The amount of a yearly periodic payment payable should be based on a PPO indexation rate comprising 80% of average Annual Rate of Change in nominal hourly health earnings added to 20% of the HICP, it recommended.

In relation to the discount rate, a court, when making a lump sum award in a personal injury case, uses that rate to determine the size of the award necessary to compensate a person for future losses.

The rate reflects what an award recipient would likely receive if the award amount were invested. Following a 2014 High Court decision, the rate currently stands at 1% for future care costs and 1.5% for other financial losses.