The Working Group on Medical Negligence and Periodic Payments, which includes Ciaran O'Rorke, head of the Hayes solicitors' Healthcare team, published the first part of its report earlier this week.
Following an intensive period of deliberation and consultation with interested parties, the Group concluded that the current system of awarding damages for future pecuniary losses - the lump sum award - is inadequate and inappropriate.
The current (lump sum) system
Where a plaintiff has been catastrophically injured, he or she is likely to require significant ongoing nursing care and assistance, medical treatment and medication, and aids and appliances into the future. The current lump sum system requires legal representatives for both the plaintiff and the defendant to commission reports on the likely annual cost of providing this support. Both sides then commission reports, medical and statistical, estimating the plaintiff's likely life expectancy i.e. years of life from the date of the injury. These reports are then provided to financial experts, including actuaries and investment consultants, who estimate the capitalised lump sum cost of providing the patient with the necessary care for the rest of their estimated life expectancy.
Estimating future life expectancy is a very inexact science. As a result, a plaintiff may outlive the estimated life expectancy, giving rise to the risk that the money will run out. On the other hand, a plaintiff may not live as long as the estimated life expectancy, and the money designed to care for them into the future will pass to his or her heirs.
The recommended (periodic payment) system
The Group's key recommendations include:
- Legislation should be enacted to give the courts the power to make periodic payment orders (PPOs) to compensate catastrophically injured patients who require long term permanent care i.e. future treatment, future care and the future provision of medical and assistive aids, where to do so would be in the plaintiff's best interests.
- The PPO could apply to the whole award, or part of the award, having regard to the nature of the injuries sustained and the circumstances of the plaintiff.
- The courts could make a PPO on a consensual or non consensual basis i.e. whether or not the parties agreed to it, although the parties will be given the opportunity to be heard and to make submissions.
- The power to make a PPO in respect of future loss of earnings will apply only where all the relevant parties to the claim consent.
- PPOs to compensate for a plaintiff's care, treatment and medical / assistive aids should not extend to the plaintiff's dependents after he or she dies, although this should not prevent the parties from reaching agreement to make ongoing payments to the dependents for a specified period after death.
- Variation of PPOs should be permitted where it has been determined that the plaintiff's condition will seriously deteriorate or significantly improve, where this contingency has been factored into the original PPO.
- Legislation should be enacted to provide full and comprehensive exemption from income tax of PPOs.
The full text of the Report is available on the Courts Service website at:
Module 1 of the Report was presented on 15 November 2010 to the Minister for Justice, Mr Dermot Aherne TD, by the President of the High Court, Mr Justice Nicholas Kearns and will now be considered by the Government.
A number of high value catastrophic injury cases that have come on for hearing this year have been adjourned until 2012, after interim payments to the plaintiffs, to allow the Oireachtas time to enact the appropriate legislation to empower the courts to award PPOs, interim and provisional awards of damages.
The Working Group will next turn its attention to medical negligence litigation (Module 2) to identify necessary reforms and to recommend the way forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
