Joe O'Toole (Independent)

I move recommendation No. 5:

In page 13, before section 4, but in Chapter 3, to insert the following new section:

"4.—The Principal Act is amended—

(a) in section 238(2) by the insertion after "yearly interest of money" of "and apart from any period payments made to a plaintiff by means of compensation or damages for any wrong or injury referred suffered by an individual in his or her person or in his or her profession", and

(b) in section 613(1)(c) after "profession" insert ", whether by once-off lump sum or by way of periodical payment".".

This is an issue I have dealt with over many years. I have discussed it with the Minister on a number of occasions over recent months. I have also discussed it at length with the finance spokespersons of the other parties, Sinn Féin, Labour and Fine Gael. It was discussed in the other House as well. To put it in context, this arises from a court's decision to grant compensation to a person. The compensation might arise from a medical negligence case, a car accident or other circumstances. It involves the court being required to assess the quantum of damages or compensation to be paid to the injured party. The court makes the judgment on the basis of the life expectancy of the person concerned multiplied by the annual costs. That, in effect, is a lump sum which does not attract taxation and it will provide for the person for the rest of his or her natural life.

A number of things arise in that context. One is that enormous advances in medical science and technology mean that a person who might not be capable of independent living today could perhaps in five or ten years' time make a successful recovery. For that reason the Judiciary on a number of occasions has raised the point that if an annual quantum could be assigned by a court as opposed to one large lump sum, this would be much more efficient and would save everybody. It would save money at a time when the Government is trying to cut back on the cost of insurance, and this would be a cost on a business enterprise or insurance company so there is a real cost saving involved. In addition, there are gains to be made because sometimes money is awarded to a person who will have no experience whatever of dealing with such large sums. Consequently, an issue can arise as was raised today on the Order of Business, namely, the cost of professional charges involved in having such moneys looked after. However, if the money were to be paid annually through the court offices, it would be much more effective. That is the view of industry and all the groups I have spoken to on this. It is certainly the view of the various groups that have looked into this over the years.

That is leading to what I am seeking in this recommendation. The current legislation was brought into being by every party represented here. It was introduced by Deputy Pat Rabbitte as the Minister of State dealing with insurance in the Fianna Fáil-Labour Government and improved on by the Deputy John Bruton-led coalition Government, so the issue is well understood in terms of the fact that it should not attract taxation. The very minor issue here is the recommendation that if it is to be paid annually, equally it should not attract taxation. There is no revenue loss involved. It is just that the courts at the moment cannot grant structured compensation on an annualised basis.

I can anticipate what the Minister will say in this regard and I believe the Department lacks the confidence to deal with it. The Minister will not be able to come up with an argument against the point I am making. I have seen the little bits and pieces, this is a good, well-travelled idea and I look forward to the Minister's full support for it.