THE SINGLE lump sum award is an “inadequate and inappropriate” way of compensating people who have been extremely badly incapacitated and will need care and medical treatment into the future.
This is the conclusion of an expert group on periodic payments in cases of catastrophic injuries, chaired by Mr Justice John Quirke. Its report was presented to the Minister for Justice yesterday.
The conclusions of the report were clear, said Dermot Ahern on receiving it.
“I’ll tease out the details with the departments of finance and enterprise and employment. We must be very careful on how it interacts with the interests of the taxpayer. Personally I’m very much in favour and I’ll ask my officials to proceed with it as soon as possible,” he said.
While stressing that both plaintiffs and defendants should remain able to negotiate agreements, including lump-sum payments, the group recommended that legislation should be enacted to empower the courts to make periodic payment orders as an alternative to lump sums. This would cover future treatment, future care and future provision of medical and assistive aids and appliances.
Drawing on similar legislation enacted in the UK, the group recommended that the court should be able to make such orders where it considered it necessary in the best interests of the injured person. Both the plaintiff and the defendant should have the right to be heard and to make submissions before such orders were made, but the court could make the orders whether or not the parties consented.
However, the courts should be empowered to make such periodic payment orders to compensate for loss of future earnings only with the consent of the parties.
The group also recommended putting in place arrangements to secure such payments. This would involve the National Treasury Management Agency providing the necessary security to injured victims, paid for by the relevant insurance company, or, if the defendant was a public body, by the State.
Part of the task of making periodic payment orders would be the indexation of the payments, taking into account the cost of medical treatment and care. The group recommended that the expertise of the Central Statistics Office be engaged to assist in this.
The orders could be varied in exceptional circumstances, to take account either of the dramatic deterioration in the victim’s condition, or the emergence of new medical treatment which would lead to a significant improvement. Such variation should be allowed only when factored in to the original periodic payment order.
Generally, the payments would not survive the death of the victim. However, this should not preclude the parties from making payments to the person’s dependants for a specified period after his or her death.
The group recommended that the legislation should provide for exemption of such payments from income tax. Already the income from lump sum payments is exempt. It also recommended that any such award should be immune from bankruptcy proceedings.
The Department of Health and Children should be empowered to take any steps necessary to avoid double claiming by people who already benefited from a medical card or long-term illness schemes, according to the group.