January-18-2013 in Healthcare Law
A Government commitment to prepare legislation providing for Periodic Payment Orders has been announced in recent days. The commitment has been welcomed as a significant development by the President of the High Court.
Under the existing “lump sum” system, legal representatives for both the catastrophically injured Plaintiff and the Defendant are required to commission expert reports in relation to the Plaintiff’s life expectancy and the likely annual cost of providing the required support which generally includes nursing care, aids and appliances and medication. A lump sum is then awarded based on these factors and also interest rates and investment returns.
In November 2010, the Working Group on Medical Negligence and Periodic Payments, which includes Ciaran O’Rorke, Head of the Hayes solicitors Healthcare Team, recommended in their first report the introduction of Periodic Payment Orders in cases involving catastrophic injuries. This recommendation followed a period of intensive deliberation and consultation which led the Group to conclude that the current lump sum system is inadequate and inappropriate. The Working Group reported that legislation was necessary before the Courts could make Periodic Payment Orders.
Following the recommendations of the Working Group, a number of high value catastrophic injury cases that came on for hearing in 2010 and 2011 were adjourned for two years after the making of interim payments in anticipation of the enactment of legislation providing for Periodic Payment Orders.
In announcing the Government’s intention to prepare the legislation, Alan Shatter, Minister for Justice, acknowledged that the danger with the lump sum approach is that it can lead to situations where persons are overcompensated or undercompensated. He noted that under current system, there is no recourse for a Plaintiff who may exhaust his fund by exceeding his life expectancy, perhaps owing to advances in medical science. Similarly, there is no recourse for a Defendant where a Plaintiff dies before the time originally projected and the remainder of the lump sum becomes in effect a windfall for the Plaintiff’s family. He noted that an appropriate and effective scheme of Periodic Payment Orders would address this issue and further the interests of justice.
It is expected that the drafting of the Bill providing for Periodic Payment Orders will commence shortly and will take account of the recommendations of the Report of the High Court Working Group on Medical Negligence and Periodic Payments.
For further information, please contact a member of our Healthcare team.
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