Periodic Payment Orders in Catastrophic Injury Cases – A Disaster Waiting to Happen?

The Civil Liability (Amendment) Act 2017 came into effect  in October 2018, marking the formal introduction of the much anticipated Periodic Payment Order (PPO) in Ireland. Many of our clients have been in and out of Court settling for interim payments pending the introduction of the PPO.  Unfortunately however, whilst PPOs are now available, they are no panacea and uncertainty and difficulties still exist for our clients, the Plaintiffs in these catastrophic injury cases.

Legislation allows for the Court, with or without the consent of the parties, to award damages by way of Periodic Payments for a Plaintiff who suffers a catastrophic injury, in respect of future medical treatment, future care, future aids and appliances, assistive technology and if the parties consent, future loss of earnings also.

INDEXATION CONCERN
The single biggest disadvantage under the PPO legislation is that 2017 Act provides that the indexation of Periodic Payments shall be linked to the annual rate of Irish Harmonised Index of Consumer Prices (HICP) Index as published by the Central Statistics Office.  Briefly, the amount awarded under a PPO, under the new Legislation, will be inflated in accordance with inflation as recorded in an Index known as the HICP Index.   Thus, if you have a PPO of say €100 to be paid to you every year, and if HICP increases by 2%, you will get €102 the next year.

SHORTFALL OF FUNDS  FOR PLAINTIFFS
It is well established that over a prolonged period of time, wages will inevitably rise at a greater rate than increases in consumer prices.  The net effect is that catastrophically injured patients receiving awards subject to a PPO face a significant shortfall in their monies they receive to pay for vital care.

We have engaged experts to look into this for our clients and they have done various studies which show that wage inflation and medical inflation are, on average, running by 1.5% above what would be contained in a HICP Index.  (There is no separate index of wage inflation for healthcare workers).  They have demonstrated that in the first year somebody gets 100%, but by year 10 they are only getting 86% of what they should be receiving.  In crude terms, in that ten years, if you multiplied 10 x 1.5% of the lag, you have dropped about 15%.  That continues throughout the period.  Therefore, a Plaintiff who has a normal life expectancy, by the time he reaches it,  will run out of money.

UK POSITION
In the UK (pursuant to 29(a) and (b) of the Damages Act 1996) the Court has discretion not to apply the Retail Prices Index (the UK’s equivalent to the Irish HICP) and an Order for Periodical Payments may include provisions to dis-apply or modify the RPI.

REVIEW EVERY FIVE YEARS
The legislation provides that a review of the operation of the indexation and suitability of the use of HICP as the chosen index is to take place within five years after coming into operation of the Act and every five years thereafter.  That review will be carried out by the Minister for Justice which tends to suggest that financial considerations and the cost of the scheme will carry a lot more weight than the consideration in respect of justice for the parties. Those that have their cases determined within the first five years are in effect test cases.  If the review after 5 years  shows (as is clearly the case) that indexation linked to HICP is inadequate, there is no provision for those people whose cases have been heard,  to return to Court for an uplift in respect of the shortfall caused by the inappropriate application of an unsuitable index ( HICP).

STEPPED PAYMENTS / NO PROVISION FOR VARIATION
Presently, a PPO may contain a provision specifying that the payment will be from a specific date, increase or decrease by a specified amount.  This is known as a “stepped payment”.  Stepped payments are  to be included where it is anticipated that there will be changes in the Plaintiff’s circumstances during his life, which are likely to affect his needs, such as reaching the age of 18 years or moving into residential care.

However, there is no provision within the present legislation for the Plaintiff to return to Court in the event of a deterioration in his condition.

RIGHT OF APPEAL ON A POINT OF LAW ONLY
Furthermore and remarkably in this writer’s view, under the present legislation, if a case proceeds to be assessed by way of a PPO and if assessment is made and one is dissatisfied, the Plaintiff only has a right of appeal on a point of law.  In direct contrast, if one had proceeded to have the case heard by way of a lump sum and if the Plaintiff was dissatisfied, he or she is not confined to a point of law for the appeal.

CONSTITUTIONAL?
It seems to me given all of the above, we cannot in all conscience recommend a PPO to our clients (unless life expectancy is short) on the basis that it is highly likely that the Plaintiff will not get 100% compensation.  On the face of it, this would seem unconstitutional.   What is 100% certain is that this PPO legislation will be tested in the Courts.  Watch this space.

Contact us at Cantillons Solicitors at +353 (0)21 -4275673 or info@cantillons.com if you would like more information.

* In contentious business, a solicitor may not calculate fees or other charges as a percentage of any award or settlement.

Karen Kearney

Partner

Experience

In her twenty years as a practising solicitor, Karen has worked with a number of leading law firms in Limerick and Cork where she has acquired extensive experience in all areas of the law, with a particular expertise in medical negligence cases.

Karen has represented clients effectively in many forums including the District Court, Circuit Court, High Court, Employment Tribunals and Coroner’s Court. She has acted for, and advised, State Bodies in respect of all areas of the law to include childcare law; employment issues; food safety and health and safety issues.

Karen joined Cantillons Solicitors in November 2009 and works in the Medical Negligence Department practising clinical negligence litigation.  She is expertly assisted by Patricia Sisk and April Wiseman, Legal Assistants.

She is very proud to be a member of the medical negligence team which  has been involved in precedent-setting  cases since 1980 and which received the inaugural award of Litigation Team of the Year, National Irish Bank Law Awards in 2012.

Karen regularly attends international conferences in order to add to  her pool of her experts and ensure access to the world’s best. She is also regularly asked to speak at national and international conferences concerning medico-legal issues. She is a regular speaker at the annual Medical Law Conference; giving presentations on healthcare law, practice and procedure to employees in the healthcare section and fellow lawyers. This lecturing experience means that Karen has an excellent grasp of law in theory as well as in practice.

Karen has featured on national television and on local and national radio  in relation to this specialised area of medical negligence litigation.She has been commissioned to write opinion pieces on topical issues in the medical negligence area, published in national newspapers. Notably, she first highlighted in the Irish Examiner, the Minister for Health’s failure to introduce a statutory Duty of Candour-  a legal requirement for medical staff, nurses and management to tell patients and their families if a mistake has been made which adversely affects the patient’s health – despite the Minister’s promise to do so.

Karen also writes a weekly column in a local daily newspaper, the Evening Echo, addressing reader’s legal queries. This column  appears in Monday’s edition of the paper.

Karen has developed real expertise in her field and has shown great dedication in pursuing complex injury cases to settlement.

Karen gets referrals from patients nationwide. She represents her patients with determination and compassion.

Qualifications

• BCL Honours 1992
• Admitted to the Roll of Solicitors in Michaelmas 1996

Associations

• Former Secretary of Limerick Bar Association
• Former member of the Litigation Committee of the Law Society of Ireland
• Member of the Medical Injuries Alliance
• Member of Action Against Medical Accidents (AvMA)