Ireland: Proposed Changes To The Provision Of Periodic Payments In Catastrophic Injury Claims

On 27 May 2015, the Government published the draft heads of the Civil Liability (Amendment Bill) 2015.  The Bill introduces a new model to allow for the provision of periodic payment orders in cases before the Irish Courts where a plaintiff has suffered catastrophic injuries. 

The Bill sets out the circumstances in which a trial judge in the High Court will be entitled to order that periodic payments be made by a defendant, other than a state authority.  It is anticipated that the Bill will be enacted before the end of this year.

It should be noted that plaintiff representatives have expressed concern about the Bill, in particular the proposal to link future payments to the Irish Harmonised Index of Consumer Prices.  The Index measures inflation over a broad range of consumer goods and will not accurately reflect the greater increase in wage inflation for carers' salaries or for medical services.  It is argued that this will result in plaintiffs not being able to meet the cost of care into the future and therefore, many plaintiffs will continue to seek lump-sum awards. 

The attraction for plaintiffs to seek lump-sum awards is motivated in part by the recent High Court decision in Russell v HSE.  This case indicated that awards for future special damages should only be discounted by 1% (previously 3%) to allow for the income that would be generated by a plaintiff who receives a lump-sum to cover future costs.  In effect, a plaintiff may receive a multi-million euro award in 2015 in respect of payments that may not need to be made until decades into the future.  The discount is intended to reflect the fact that the plaintiff gets a benefit, by being able to invest that sum of money until it is needed.  Defence practitioners, and many actuaries and economists, argue that the discount should be significantly higher.  This decision is currently under appeal and was heard by the Court of Appeal on 7 July 2015.  Judgment was reserved.  An update will be published in relation to the judgment as soon as it is delivered. 

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