With effect from 1 October 2018, the High Court will have the power to make awards of damages in cases of catastrophic injuries by way of periodic payment orders (‘PPO’s’). A periodical payment order is an annual index linked award paid to a victim of serious or catastrophic injury as an alternative to the traditional lump sum payment system. PPO’s are appropriate in cases of catastrophic injury where there is a lifelong requirement for care and medical assistance arising out of negligence of a third party. The indexed linked payments are a stepped form of payment which cater for the anticipated changes in the individuals needs in accordance with the persons developmental milestones (e.g. entry into primary, secondary or third level education, reaching the age of 18 years or changes to the care needs of the persons including transfer to residential care).
The Civil Liability (Amendment) Act 2017 stems from the High Court Working Group on Medical Negligence and Periodic Payments (2011), chaired Mr. Justice John Quirke, which recommended the introduction of PPO’s. Up to now, damages for personal injuries are paid by a traditional lump sum award in full and final settlement. In catastrophic injury cases, the traditional lump sum award is widely accepted as being inequitable, inappropriate and may lead to the over or under compensation of a catastrophically injured Plaintiff. Indeed, in May 2016 the delay in the introduction of PPO’s for catastrophically injured victims was severely criticised by the President of the High Court, Mr Peter Justice Kelly as “shameful” when he awarded a 13-year-old boy, who suffered from cerebral palsy with spastic quadriplegia, a lump sum award of €8 million for catastrophic injuries sustained at birth.
In deciding whether to make a PPO, the Court must have regard to the best interests of the Plaintiff and will take into account all of the circumstances of the Plaintiff’s case. PPO’s are indexed linked in line with the prevailing rate of the Harmonised Index of Consumer Prices and payments will be ring fenced in the event of bankruptcy so that injured parties will continue to receive the resources needed to cover long-term care and medical attention. PPO’s will, like lump sum payments, be tax-exempt under the Taxes Consolidation act 1997.
One possible negative with PPO’s is that some families report a lack of closure with the Court and legal system as they have to return to Court at various intervals to update the PPO in line with that persons individuals’ requirements.
Ronan Hynes, Partner and Medical Negligence expert commented that: “The introduction of periodical payment orders into the Irish legal landscape is a much-needed and welcome development. PPO’s have been available to victims of catastrophic injury in the UK since 2005. They will provide for a more accurate assessment of the individuals lifelong care and assistance needs, providing financial security and peace of mind as a result.”
Should you require more information on PPO’s please contact Ronan Hynes, Partner or a member of our Serious and Catastrophic Injury Team on 061 432 348 or by email at [email protected].