Check Against Delivery
Seanad Eireann
Commencement Matter
25 February 2015
“The need for the Minister for Justice and Equality to clarify the current position on the introduction of legislation which will allow the courts to grant periodic payments to those who have suffered injury as a result of medical negligence.”
- Senator Colm Burke
Reply by Minister of State Kevin Humphreys TD on behalf of the Minister for Justice and Equality, Frances Fitzgerald TD
Cathaoirleach
The Minister for Justice and Equality, Deputy Frances Fitzgerald regrets that she is unable to be present for this discussion today. She would like to thank Senator Burke for raising this important issue which gives me the opportunity to outline the progress made with respect to the introduction of periodic payment orders in cases of catastrophic injury.
It is fair to say that there has been much debate in recent years as to the appropriateness and adequacy of lump sum awards in cases of catastrophic injury. Assessing damages in such cases is difficult given the uncertainties affecting assumptions made as to the person’s future circumstances and issues such as investment returns and inflation rates.
By way of background, the President of the High Court, Mr Justice Nicolas Kearns, established the Working Group on Medical Negligence and Periodic Payments in February 2010. The Group’s terms of reference included considering and reporting on whether certain categories of damages for catastrophic personal injuries can or should be awarded by way of periodic payments orders (PPOs), as opposed to once-off, lump-sum orders and to make recommendations and provide draft legislation, regulations and rules as may be necessary. In the course of its deliberations the Working Group extended its examination to all personal injuries not just medical injuries.
I am sure that the Senator is aware that, in many other jurisdictions, catastrophic injuries cases are compensated by periodic payment orders (PPOs) which avoid the possibility of over or under compensation as such payments are tied to actual costs of treatment and actual duration of life. This is not the case in Ireland where the lump sum approach to assessing damages in catastrophic injury cases has been the norm in this jurisdiction. This approach has been criticised in that lump sum payments can lead to situations where the lump sum is exhausted before the demise of the claimant. Alternatively, if the claimant dies unexpectedly, the remainder of the lump sum becomes, in effect, a windfall for his or her family.
It is the Minister’s belief that the introduction of an appropriate and effective scheme of periodic payment orders will address the issues raised by the Working Group on Medical Negligence and Periodic Payments and will further the interests of justice. There is of course also the view that a PPO scheme together with other legislative changes, such as the introduction of pre-action protocols for medical negligence, will have positive impacts on high medical insurance costs.
It is, of course, vital that any such scheme must ensure the continuity of payments to the plaintiff. Where the State has such a liability, security of payment is not an issue. However, in the case of private defendants, usually an insurance company, the matter is more complex and will require the establishment of a financial infrastructure to ensure continuity of payment, whilst ensuring that the State’s position under any such scheme is fully protected.
The Government, in 2013, approved the drafting of the Heads of a Civil Liability (Amendment) Bill to implement the recommendations contained in the High Court Working Group Report on Periodic Payments Orders in catastrophic personal injury cases with respect to awards made against the State and agreed that the extension of any such scheme to non-State defendants would be examined further in consultation with the Department of Finance.
Subsequent to that Government decision, the Department of Finance, through the State Claims Agency, commissioned an actuarial study of this issue. Following receipt of the actuarial study, in April, 2014, the Department of Justice and Equality established an inter-departmental working group to work through the technical aspects of this issue and to devise the elements of the periodic payment scheme for the proposed legislation.
In particular, the Group examined the following issues:
· Financial security mechanisms for PPOs, for both State defendants and private defendants;
· Indexation of PPOs – the Group examined the most appropriate indexation measure for inclusion in the legislation;
· Variable or Stepped PPOs – a variable PPO would allow parties to return to court to seek variation of the Order in certain circumstances while a stepped PPO would include, at the making of the Order, a number of stepped payments to cater for specific milestones in the claimant’s life;
· The extent to which decisions to award PPOs should be mandatory or be at the discretion of the court;
· The scope of a PPO scheme – whether it would, for example, include both State and non-State defendants..
That Group has now completed its work and a number of recommendations on these technical issues have now been made. I understand that Minister Fitzgerald, in conjunction with her colleague, the Minister for Finance, is actively considering the optimum implementation mechanism to ensure the financial security of periodic payment orders. The Minister has informed me that she expects to be able to bring the necessary legislative proposals to the Government in the very near future with a view to the necessary legislation being published and enacted this year.
ENDS