David Stanton (Cork East, Fine Gael) | Oireachtas source

A lot of work has gone into this and it has been taken very seriously. I recognise that the amendments proposed by Deputies Daly and Wallace are intended to put in place a dedicated index for adjustment of periodic payments orders, as recommended by the High Court working group on medical negligence and periodic payments. The intention is to enable periodic payments to be index-linked to the levels of earnings of nurses and care personnel and to changes in costs of medical treatment and assistive aids and appliances, as Deputy Daly has outlined. That being said, I am not in a position accept the proposed amendments. I will outline the reasons and we can discuss the matters further as we go along.

Amendment No. 5 and the consequential amendments arising from it seeks to place an obligation on the Minister to put in place a new index, based on changes in earnings of health care personnel and the cost of medical treatment and devices and to provide that this index should be used in conjunction with the HICP to determine the annual adjustments to periodic payments orders. The first difficulty is that the development and establishment of statistics of the type suggested by the Deputies are outside the remit of the Minister for Justice and Equality. The proposed index would, in all probability, take longer than 12 months to implement.

Second, the proposed amendments give no guidance as to the manner in which the new index would be applied to PPOs. It is not clear whether the new index is intended to replace the HICP. If the intention is that both indices will be used, it is not clear what weighting would be given to each index.

Third, an actuarial study of PPOs commissioned by the State Claims Agency concluded that, in respect of indexation of PPOs, an index in the form suggested by the working group on medical negligence and periodic payments could prove to be volatile given the small sample size available in Ireland. The study suggested that, instead, a broader based index should be used to reduce volatility and provide certainty with regard to payments under a PPO to catastrophically injured persons. The issue of indexation of PPOs and the actuarial study to which I have just referred were considered in detail by an interdepartmental working group on legislation on periodic payments orders, which was established to examine the technical aspects of introducing PPOs. The working group concluded that an index based on the Irish harmonised index of consumer prices should be the initial index specified in the Bill.

Fourth, a very important matter to note in respect of indexation of PPOs is that it is not always the case that a dedicated index would provide a higher annual adjustment than the HICP. I note, for example, that in the UK the dedicated index used was the annual survey of hours and earnings, ASHE 6115. While the UK retail price index was historically lower than the ASHE value, since 2008 the UK RPI has outperformed ASHE 6115 by a cumulative 13%.

I believe it is vital, in putting this legislation in place, that persons who are catastrophically injured should have certainty with respect to the manner in which annual adjustments to the PPO will be made. Given the lack of detail provided in the amendments with regard to the practical operation of the proposed index, accepting these amendments would provide less rather than more certainty regarding the operation of PPOs. For those important reasons, I cannot accept these amendments.