Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I welcome the opportunity to contribute to the debate on the long-awaited and long overdue Civil Liability (Amendment) Bill 2017. I am broadly in agreement with the points so cogently made by Deputy Clare Daly on open disclosure which were closely modelled on the well researched points made by the Medical Injuries Alliance. Open disclosure is an important concept. Very often a full and frank disclosure could prevent the initiation of a personal injuries claim and would most likely lead to a reduction in same. In that context, it is important for people to know the sequence of events. There is a duty of candour in other jurisdictions and the proffering of a full explanation of the sequence and precise nature of events is an act of civility founded on common sense and decency. An immediate apology should likewise be forthcoming contemporaneously. As Deputy Clare Daly said, this has clearly applied in the United Kingdom since 2014, particularly in the context of catastrophic events. I am of the opinion that it could be helpful to the professionals involved, doctors and others, to give their views and opinions and articulate precisely what happened in various situations. We have had a significant number of events in this country involving hospital treatments which would warrant a statutorily enforced open disclosure policy. As a midlands Deputy, I am familiar with some of the cases alluded to by Deputy Clare Daly.

We often hear the State Claims Agency referring to the significant costs associated with medical negligence claims. A lot of these costs would be eliminated at the outset by an early admission of failure, if there was fault. This could be facilitated by a statutory duty of candour. Very often plaintiffs are put through the legal wringer, with costs incurred at every step. Even when it is abundantly clear that liability should be admitted, there are still motions for discovery and so forth. Everyone is entitled to defend a case and I strongly argue that point because it is important to ensure all matters are properly tested. However, where it is abundantly clear that liability should be admitted, it should be so done. There is no point in bemoaning the cost of civil actions in the context of significant events where the opportunity to reduce such costs is not taken. This would be greatly facilitated by an open disclosure policy.

I now turn to the issue of periodic payment orders, the central core of the Bill. In December 2012, during the term of the previous Dáil, I brought this issue to the attention of the House. I am, therefore, no latecomer to it. As a barrister, it is an issue that has exercised my mind for some time. As the House will be aware, where a person is injured in an accident as an employee, or in a road traffic accident or under the auspices of the occupier's liability principles and the injured party establishes liability against a particular person or company, that party is entitled to recover compensation by way of damages. In deciding the amount of compensation to be awarded to a civil claimant the courts resort to two headings of damages - general and special damages. General damages are that part of an award which compensates a person for the injury up to the day of the court hearing and also into the future which at best is a guesstimate since the effects of the injury can be borne by the injured party throughout his or her life until he or she dies. One will often hear people belittling those who have been injured; for example, one will regularly hear people pour scorn on whiplash injuries. However, I know people who are still suffering ten or 15 years after suffering a whiplash injury and still receiving physiotherapy. People say this does not happen in England and so forth, but I take issue with those who belittle individuals who suffer such injuries. I am not talking about low-velocity accidents but those in which significant injuries occur.

General damages are encompassed by a lump sum award which, despite public perception to the contrary, is not unlimited as there is a court defined cap on general damages in civil claims. The second heading is special damages which include various items which can be calculated with reasonable accuracy with the aid of expert evidence provided by an actuary. Consultants and other experts are often also involved. Such items include loss of earnings, both past and future. In the context of likely future earnings, the possibility of not always being in employment must be factored into the estimate. Special damages also include future medical expenses and in the case of very serious physical injuries can include the cost of equipment, the modification of a dwelling house, the requirement for an automatic car, the requirement for home care and the cost of specific medical aids. Under the system as constituted in this jurisdiction, awards in these cases consist of a lump sum which is a once off payment. In terms of the amount awarded in special damages, it is especially problematic because the amount is intended to be a capital sum which, if invested wisely, will yield enough annual income for the person injured to pay his or her medical and other expenses and live comfortably with the injury.

The Judiciary has been very active in this area for the past six or seven years. Mr. Justice Kearns, then President of the High Court, established a working group on medical negligence and periodic payments under the chairmanship of Mr. Justice John Quirke and the first module of a report on periodic payment orders was presented in October 2010. The report has been available for more than six years. Several members of the Judiciary, most notably Ms Justice Mary Irvine and Mr. Justice Kevin Cross, who have taken a number of these cases for ruling have been urging the bringing forward of appropriate legislation to implement the recommendations made in the aforementioned report but nothing happened in this regard until recent times. In that context, I compliment the Minister of State on bringing forward the Bill.

The House will be aware that since 2005 in England and Wales personal injury awards in catastrophic injury claims may be based on structured settlements or periodic payments. A structured settlement is, in effect, an annual payment or an annuity purchased from an insurance company to meet the obligations in an agreement to provide periodic payments. Periodic payments are the payments made as a result of personal injury claim and to be made by way of a future stream of payments.

The executive summary of the working group's report contained 13 specific recommendations. The group was unequivocally clear that the single lump sum award was inadequate and inappropriate in cases where the plaintiff had been catastrophically injured either in the long term or permanently or where the person would require ongoing care and medical treatment into the future. As an alternative to a lump sum award of damages, the court can make consensual or non-consensual periodic payment orders to compensate injured victims in cases involving catastrophic injury where long-term or permanent care will be required for the cost of future treatment and care and the future provision of medical and assistive aids and appliances. The order should apply to the whole or part of an award in any case where, having regard to the nature of the injuries for which the award is being made and the circumstances of the person to whom the award is being made, the court considers it is appropriate and in best interests of that person that such orders should be made, provided that the parties have been given an opportunity by the court to make submissions and be heard in full on the relevant issues. The court should be empowered to make periodic payment orders to compensate for future loss of earnings only with the consent of all parties to the relevant claim.

That is important because we do not want a broad brush. We want to give people an opportunity to be able to make their points in court. I wonder whether the Bill will facilitate this. The Minister of State might refer to this in his response because it is important that people have that opportunity. The legislation should facilitate rather than impose.

The 2011 programme for Government, to which the Minister of State, Deputy Eoghan Murphy, subscribed, as did I as part of the Labour Party's participation in government, included a strong commitment to the introduction of legislative reform in this area. It stated legislation would be introduced to enable the courts to make "provision for structured settlements in circumstances where lump sums are currently awarded as a consequence of individuals suffering catastrophic injury because of the negligence of another". The main purpose of an award of damages is to restore people, as far as is possible by way of pecuniary compensation, to the position that prevailed for them before they were wrongly injured. The provision of such awards is clearly inadequate for people with catastrophic injuries, but its objective is restitutory in nature. Such an attempt at restitution by way of monetary compensation is, of course, totally and absolutely inadequate.

I take grave issue with the fact that it has been determined by the courts that the maximum claim in general damages that somebody who has been catastrophically injured can receive is €450,000. The big awards are made when special damages are being claimed in respect of medical assistance, aids and equipment, the modification of houses, the provision of automatic cars and the loss of earnings. A recently qualified plumber aged 25 years should have 40 years of paid work in front of him or her, given that he or she could work until he or she is 65 years of age. When the loss of these earnings is actuarially evaluated, the amount of the compensation could come to several million euro. However, it is lost in the discussions on this issue that the maximum one can receive in court for the injury is €450,000, which is totally on the lower side. Special damages constitute a significant element of any award in catastrophic injury cases. I reiterate that the current ceiling on awards of €450,000 in general damages for catastrophic injuries is totally inadequate when considered against the pain and suffering, the loss of amenities and the loss of expectation of life.

Advocates of a lump sum award note that it is final and that it allows the injured party, or those acting on his or her behalf in loco parentisor as part of a committee, to deal with his or her needs and wants as they arise. I accept that it is an advantage that a lump sum award of €4 million or €5 million is final. This approach enables people to deal with their circumstances. While there are advantages to this approach, the argument against it centres on the possibility of over or under-compensation. The Minister of State has made this argument, with which I agree. The periodic payments principle is enshrined in the Bill for this reason. The role of the actuary is central to the calculation of awards in cases involving catastrophic injuries. Actuarial assessment plays a pivotal role. The calculation of average life expectancy which a court has to determine might not ultimately bear comparison to the real or actual life expectancy of the person involved. If the injured person dies before the date expected, measured or outlined, there is over-compensation. In such circumstances, the defendant cannot recover or reclaim what is, in effect, an excess of damages. We are talking about special damages in such cases because that is where the huge sum arises. Of course, the converse is also true. It is clear that when an injured party lives for a significantly longer period than expected, anticipated or measured under the Irish population mortality statistics - all of this is done statistically - the damages will not be sufficient to meet his or her needs or requirements during the latter phase of his or her life. Such a person will find himself or herself with insufficient resources to meet his or her needs. That creates a huge issue. Annual periodic payments could deal with this issue on a real and practical level. That is why the Bill is so important.

The rate of return on the investment of lump sums which have to be invested is critical. The other issue that has to be considered when a lump sum is awarded is that it is predicated on the cost of care and various other things I have mentioned. Such costs could escalate significantly as a result of inflation. This might mean that they are well in excess of the rate or value operating at the time of the court proceedings and the awarding of the grant. While lump sum awards have the benefit of being definitive and final, they have presented a significant challenge to the members of the Judiciary who deal with these cases and try to do their level best in a sea of uncertainty. Various judges have consistently championed the development of a system of paying damages by means of periodic payments. As I have said previously, periodic payments facilitate the structuring of awards or settlements in a more realistic way in order that injured parties receive regular annual payments for as long as they live.

The working group under the chairmanship of Mr. Justice John Quirke specifically recommended that a periodic payment order be made only where the court was "satisfied that the continuity of payment under the order is reasonably secure". If that recommendation is to be brought into effect, a form of financial infrastructure will have to be established to guarantee the level of payment. I suggest the Minister of State consider the possibility that the National Treasury Management Agency, NTMA, will have to be involved. It might well seek to be involved. My view is that it could have a significant role to play in that regard. It is a complex area. The Minister of State has a role in the Department of Finance which might well look at the possibility of providing for NTMA involvement in that regard. It has a very high reputation in areas such as this. It would be useful to resort to it in this instance. I have always been concerned about the impact of cases in which plaintiffs live for longer than expected or imputed in the calculations. It is possible that the awards in such cases will be insufficient to meet the needs of those involved, thereby placing substantial pressure on parents, people acting in loco parentisor others concerned with meeting such needs. We hope those who receive €3.5 million or €4 million will live for ten or 15 years more than we might anticipate, but we must have arrangements in place for such cases. That is why this is an important area.

I have always advocated that provision should be made for the appropriate indexation of periodic payments. I believe they should be index-linked with the earnings of treatment and care personnel and changes in the cost of medical and assistive aids and appliances. The Minister of State deals with the ordinary consumer price index every day of the week. There is a huge difference between medical inflation and ordinary inflation. The Minister of State might say attempts are made to control both, but there is a big difference between them nonetheless. A link with the consumer price index would do a disservice to what we are trying to do. It would actually defeat the purpose of our endeavours. The Minister of State has spoken about the involvement of statistics from the Central Statistics Office and such things, but I argue strongly that there should be a link with the level of earnings of treatment and care personnel who are essential in this context and changes in the cost of medical and assistive aids and appliances. That would ensure plaintiffs would be covered for the cost of treatment and care well into the future.

I certainly welcome the Bill and compliment the Minister of State on reaching this point. I raised this issue with the then Minister, former Deputy Alan Shatter, on 4 December 2012, which is near enough to four and a half years ago.

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