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The Government recently approved the creation of new law which will provide an alternative to large, once off awards in cases involving catastrophic injuries. The move is expected to improve the provision of lifelong care and medical treatment for catastrophically injured people.
Under the current system, successful plaintiffs who are awarded damages by the court are awarded lump sums based on estimates of their life expectancy, which can leave a shortfall. The proposed legislation however, awards damages in phased payments over an individual's lifetime.
Significant development
The new law will be contained within the Civil Liability (Amendment) Bill. News of this change was welcomed by the president of the High Court, Mr Justice Nicholas Kearns, who said it was a "very significant development".
Background
Court awards are made up of two parts, general damages and special damages. General damages are made up of awards for pain and suffering, both past and into the future. Special damages are awarded for the financial loss suffered and expense incurred by a person as a result of another's wrongdoing. These include care costs and loss of earnings, both past and into the future. Currently, we have a cap on general damages in this jurisdiction, however, by their very nature, there can be no cap on special damages.
The decision to implement new law on Periodic Payment Orders (PPOs) follows a number of significant multi-million euro awards and settlements, despite there being a ceiling on general damages of €450,000.
'Gambling every day'
One of the most recent cases to make the headlines in terms of significant awards concerned a personal injury claim for a minor. The case, Kennedy v MIBI and Kennedy1, saw the High Court, in April 2012, being asked to approve an award of €11.5 million. Mrs Justice Irvine commented that the courts were gambling with the lives of those who had suffered catastrophic injuries. "The reality is the courts don't know when people are going to die". "We are gambling every day." Her comments were made in the context of an injured person living longer than anticipated by medical experts and running out of money to fund their care. It is expected that the introduction of PPOs will prevent this situation from occurring in the future.
What is certain is that a catastrophically injured person and their family will no longer need to worry about running out of money before their death. Also, scenarios where lump sum awards have been made to people who have then passed away a short time later, resulting in a financial windfall for their families, will be a thing of the past.
Footnote
1. High Court 2010/5037 P, Judgment 20 April 2012
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