knowledge | 4 October 2018 |
Periodic Payments in Catastrophic Personal Injuries Cases Now Possible
The first day of the new legal year has just past, bringing with it a significant reform of the law in the area of personal injuries litigation with the commencement of amendments to the Civil Liability Act 1961 providing for the award of periodic payments in catastrophic personal injuries cases.
The amendments are made by certain provisions of the Civil Liability (Amendment) Act 2017 which have been commenced with effect from 1 October 2018.
They provide that in personal injuries cases, where a plaintiff has suffered catastrophic injuries, the award of the whole or part of any damages for the future treatment and care of the plaintiff can be made by way of a periodic payments order. With the parties’ written consent, this can also include damages for future loss of earnings.
The amount awarded is index-linked and may be adjusted annually. There are detailed provisions to ensure that this indexation operates in a satisfactory way, including ongoing ministerial review of the process.
In deciding whether or not to make a periodic payments order, a court will have regard to certain matters including the best interests of the plaintiff, his or her injuries and needs, and the parties’ views.
The parties can themselves agree to the periodic payment of damages and can apply to court for a periodic payments order in their agreed terms. The court can grant or refuse the application or substitute its own order.
Where it is anticipated that there will be future changes in a plaintiff’s circumstances which are likely to have an effect on the plaintiff’s needs, a court can order that periodic payments increase or decrease by a specified amount on specified date. This is known as a “stepped payment”. Events here include a plaintiff reaching 18 years of age; or changing educational, care or residential needs. If it later becomes evident to the plaintiff that the anticipated change will not occur, the plaintiff must notify the court and the paying party before the stepped payment is due to take effect. The court will then amend the order as it considers appropriate.
Security of a Periodic Payments Order
The Act provides for the security of a periodic payments order. It stipulates that a court may make the order where it is satisfied that the continuity of the payments under the order is reasonably secure. The Act sets out guidance for the court in making this assessment eg are the payments guaranteed under the State’s Clinical Indemnity Scheme?
Assignment of a Periodic Payment
A plaintiff with a right to receive payments under a periodic payments order can apply to the court for approval to assign, commute or charge the right. The plaintiff cannot take this action without court approval. Where a plaintiff does so or agrees to do so, the action or agreement is void. In making a decision here, the court will consider factors such as the plaintiff’s best interests.
There are also amendments to the Civil Liability and Courts Act 2004. Now, where a formal offer is made in respect of a personal injuries action relating to a catastrophic injury, it must specify what proportion of the amount relates to the plaintiff’s future treatment and care needs and loss of earnings. There is a further amendment to deal with how this aspect of the formal offer will be regarded when dealing with the issue of costs.
There are also consequential amendments to the Insurance Act 1964, the Bankruptcy Act 1988 and the Taxes Consolidation Act 1997.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.