Payment of Compensation in Catastrophic

Injury Cases by way of periodic payments

by John Reid

With effect from 1st October 2018 the Courts are empowered to make awards of Damages in cases of catastrophic injury, by way of Periodic Payment Orders. This arises as a result of the signing by the Minister for Justice of the necessary Commencement Orders in relation to the relevant parts of the Civil Liability (Amendment) Act 2017.

“Catastrophic Injury” is defined as “a Personal Injury which is of such severity that it results in a permanent disability requiring the person to receive lifelong care and assistance in all activities of daily living or a substantial part thereof.”

“Activities of Daily Life” are also defined as including activities such as dressing, eating, walking, washing and bathing.

The new provisions state that where a Court is awarding Damages to a catastrophically injured person it may order that all or part of the Damages for future Medical treatment, future care of the injured party and the provision of assistance by way of technology be paid by way of a Periodic Payments Order. (PPO) The Act further goes on to say that where all parties are in agreement Damages in respect of future loss of earnings may be paid by way of a Periodic Payments Order.

The new provisions state that the Court must have regard to the best interests of the Plaintiff in deciding whether to make a PPO. It also must take into account the circumstances of the individual case, which include the nature of the injuries suffered by the injured party and the form of award which would best meet the needs of the injured party, having regard to the preferences of all the parties.

Furthermore a Court may order that a PPO will increase or decrease from a specified date by a specified amount (a “stepped payment”) to cater for anticipated changes in the needs of the injured party, such as taking up primary, secondary or third level education, attaining majority or changes to the care needs of the injured party including transfer to sheltered or residential care.

As is to be expected the new provisions also state that a Court may only make a Periodic Payments Order in circumstances where it is satisfied that the continuity of payments under the Order are reasonably secure.

There is further provision enabling the party or parties making the payments to make application to the Court where the paying party proposes to alter the method of payment of a Periodic Payments Order. The Court is enabled to make an alteration to the method of payment if the injured party consents and if the Court is satisfied that continuity of payments is secure and that the altered method of payment is capable of indexation.

Provision is also made in relation to the indexation of payments. Provision is made for the adjustment on an annual basis of a payment under a Periodic Payments Order in line with the prevailing rate under the harmonised index of Consumer prices. The section provides for a review of the Application of the harmonised index of Consumer prices after a five year period to determine its suitability for use in Periodic Payments Orders and if necessary for the specification of a more suitable alternative index by ministerial regulation.

Furthermore the new provisions state that a party may not assign, commute or charge a Periodic Payments Order without the approval of the Court.

There are additional provisions including provisions protecting an injured party in the event of bankruptcy confirming that Periodic Payments are treated in the same way as lump sum payments for Damages for the purposes of income tax and also provisions dealing with amendment of Section 17 (Offers of Settlement) under the Civil Liability and Courts Act 2004. Furthermore in the event of a compensator becoming insolvent the full amount of the PPO will be paid from the Insurance Compensation Fund.

If you require any further detail or advice, please contact John Reid in O’Rourke Reid
Dial: +353 1 240 1200

This document is for information purposes only and does not purport to represent legal advice.  
© O’Rourke Reid 2018