James Browne (Wexford, Fianna Fail) | Oireachtas source

I move amendment No. 1:

In page 5, between lines 28 and 29, to insert the following: “(2) The Civil Liability Acts 1961 to 2017 and Part 3may be cited together as the Civil Liability Acts 1961 to 2022.”.

This group of amendments amends the Civil Liability Act 1961 and relates to a new power for the Minister to make regulations in relation to periodic payment, indices and how it is to be applied. The substantive amendment is amendment No. 14, which provides for a replacement of the current section 51L of the 1961 Act. As Deputies will be aware, section 51L of the Civil Liability Act 1961, as inserted by the Civil Liability (Amendment) Act 2017, deals with the issue of the indexation of periodic payment orders, otherwise known as PPOs. The section provides for the annual adjustment of a payment under a PPO in line with the prevailing rate under the harmonised index of consumer prices, HICP. In addition, the section provides for a review of the application of the index after a five-year period to determine its suitability for use in PPOs. If, following the review, an alternative index is considered to be more suitable for the purpose of the PPOs, the Minister may, by regulation and with the consent of the Minister for Finance, specify an alternative index for use in adjusting payments under a PPO. This section also provides for reviews of the suitability of the relevant index at five-year intervals.

In November 2019, at a directions hearing, the High Court found that there was overwhelming evidence that a PPO linked to the HICP would result in under-compensation. The expert evidence presented to the court indicated that the annual amount needed to be linked to a wage-based index to ensure full compensation for future care needs. The court indicated that the HICP should no longer be used in such cases. The effect of the High Court decision was that PPOs are not being pursued despite general agreement among all parties that a PPO is often the best solution for plaintiffs and defendants in such cases. In order to address the effect of the High Court decision, I have decided that it is necessary to amend existing legislation to delete the reference to the HICP. I am also taking the opportunity to substitute an alternative and more flexible mechanism for determining the PPO indexation rate.

Amendment No. 14 gives effect to this policy decision. The amendment provides that the existing section 51L will be replaced by a new section, which essentially provides that the indexation rate for PPOs will be set by regulations made by the Minister for Justice, with the consent of the Minister for Finance. Subsection 1 sets out the general rule that a periodic payment order will be adjusted on an annual basis by reference to an index specified under the section and this index will be termed "a periodic payments index". Subsection 2 provides that an indexation rate shall be set out in regulations by the Minister for Justice for the consent of the Minister for Finance. Subsection 3 specifies in detail the issues that the Minister for Justice must consider. Subsection 4 provides for a review of the index and the general rule that the review must be carried out within five years of the making of the regulations setting the index rate.

However, it is my view that we need flexibility in the determination of the index. We have seen rapid increases in inflation in the past year. It will be necessary to ensure that a periodic payment index is capable of being reviewed in the event of further significant changes in economic circumstances.

Subsection 5 provides for the carrying out of subsequent reviews of the periodic payments index. Subsection 6 is a standard provision relating to the laying off regulations before the Houses of the Oireachtas. Subsection 7 identifies the scope of the new index which will apply to the annual adjustment to be made to the PPOs after commencement of the section.

I take the view that in order to ensure the best outcome for those who have been catastrophically injured, we should put in place a specific index dealing solely with PPOs. However, this will take some time and a great deal of development work by the Central Statistics Office. In that circumstance, I do not believe that it is in anyone's interest to leave the situation as it currently stands. It is my intention, therefore, to set an interim rate for use in PPOs. This rate will include elements covering general inflation and crucially, given the High Court decision, wage inflation. To assist me in determining the appropriate rate, I have established a working group to advise me on the most appropriate rate in the current circumstances.

Amendments Nos. 1 and 9 to 13, inclusive, are consequential amendments arising from the replacement of section 52L of the 1961 Act. Amendments Nos. 1 and 9 are technical amendments, while amendment No. 10 provides that the periodic payments index has the meaning assigned to it in section 51L. Amendments Nos. 11 to 13, inclusive, replace existing terminology in legislation with a reference to a periodic payments index.