Welfare to recoup injury benefits

Compensators making personal injuries awards will also have to pay for their welfare benefits, writes Doireann O’Mahony

TWO radical new sections contained in the Social Welfare and Pensions Act 2013 will come into operation today concerning the amount of certain illness-related social welfare payments from compensation awards made to plaintiffs as a consequence of non-fatal personal injury claims.

The act provides that, where one of a number of benefits is paid by the department to an injured person who has been compensated, the amount of the payments is to be repaid to the department by the compensator, usually that is a defendant’s insurance company. The relevant payments are: Disablement pension, disability allowance, illness benefit, injury benefit, invalidity pension, and partial capacity benefit.

In our present system, during the period of time in which a plaintiff was unable to work due to a compensable injury, if that plaintiff was in receipt of certain social welfare benefits then these must be deducted when calculating the recoverable loss in a personal injury claim. Minister for Social Protection Joan Burton stated at the Bill’s second-stage speech that, in effect, these benefits represent “a subsidy to the compensators”. Meanwhile, insurance companies simply saw it as stopping plaintiffs from being compensated twice.

The act provides that, in situations where a compensator intends making a compensation payment to a plaintiff as a consequence of an injury, the compensator must pay to the department an amount equal to the illness-related social welfare payments that have also been paid as a consequence of that personal injury.

From the date the provision comes into force, all compensators will be required to obtain what is to be known as a ‘recoverable benefits certificate’ from the department prior to settling any personal injury claim.

The refund to the department will be separate and distinct from the settlement figure agreed with the plaintiff. No case can be settled without the certificate having first been obtained. This may well result in spur of the moment settlement talks becoming a thing of the past and the ‘all-in settlement’ (where legal costs are included in the compensation figure) being consigned to history.

Court orders will be required in the event of a split on liability. The department will issue the certificate within 28 days of receipt of a request. The certificate will also be sent by the department to the plaintiff or his solicitor, if represented. The certificate issued will be valid for a period of 90 days. If a settlement is not achieved within this timeframe then the compensator must request a further certificate. The department can recover benefits paid for a maximum period of five years from date of accident. The benefits recoverable will be retrospective.

The department has designed an application form for requesting a certificate. It is a detailed document requiring the plaintiff’s personal details, details of the accident, details of the indemnifier and details of the plaintiff’s legal advisors or representatives.

Unless there is a court order indicating that there was a split on liability, the department will expect full reimbursement of any benefits paid. If there are multiple compensators being pursued by a plaintiff, the certificate must be secured by all compensators. If there is an apportionment of liability between defendants, the department will accept each defendant’s separate payment of their own proportion of the agreed apportionment of liability between them.

It will be necessary for each indemnifier, in such cases, to set out to the department what the split on liability between each defendant was.

The implications of the new law will be manifold. Not only will it serve to add to the workload of defendant solicitors, but quite worryingly, it will cause delays in injured persons receiving the compensation to which they are entitled.

- Doireann O’Mahony is a practicing barrister