Wednesday, 25 February 2015
Periodic Payment Orders
I welcome the Minister of State to the House. I raise the issue of legislation relating to periodic payment orders in the context of a recent presentation made to the Joint Oireachtas Committee on Health and Children by a parent whose child was severely affected by medical negligence. It was clear at the time of the child's birth that she had been badly affected by the manner of her delivery but it was nine years before any payment issued to the family. The parent spoke about the fact that the first three to four years of that child's life were extremely important but that the family did not have access to funding to provide the best possible care for the child. I raise this matter in that context.
In a recent case at the same hospital a settlement was reached at a far earlier stage - approximately three years after the event. At least there was some satisfaction from the parents' point of view then because they knew that moneys would be available to allow their child to access the kind of services needed at a very young age. This is a very important issue and we should introduce the appropriate legislation as soon as possible.
The Minister for Justice and Equality, Deputy Frances Fitzgerald, regrets that she is unable to be present for this discussion today. She would like to thank the Senator for raising this important issue which gives her Department the opportunity to outline the progress made with respect to the introduction of periodic payment orders in cases of catastrophic injury.
It is fair to say that there has been much debate in recent years on the appropriateness and accuracy of lump sums awarded in cases of catastrophic injury. Assessing damages in such cases is difficult, given the uncertainties involved in making assumptions as to the person's future circumstances as well as issues such as investment returns and inflation rates. The President of the High Court, Mr. Justice Nicholas Kearns, established a working group on medical negligence and periodic payments in February 2010. The group's terms of reference included considering and reporting on whether certain categories of damages for catastrophic personal injuries can or should be awarded by way of periodic payments orders, PPOs, as opposed to once-off, lump-sum orders and to make recommendations and provide draft legislation, regulations and rules as may be necessary. In the course of its deliberations the working group extended its examination to all personal injuries, not just medical injuries.
I am sure the Senator is aware that in many other jurisdictions catastrophic injuries cases are compensated by PPOs which avoid the possibility of over or under compensation, as such payments are tied to actual costs of treatment and actual duration of life. This is not the case in Ireland where the lump sum approach to assessing damages in catastrophic injury cases has been the norm. This approach has been criticised in that lump sum payments can lead to situations where the lump sum is exhausted before the demise of the claimant. Alternatively, if the claimant dies unexpectedly, the remainder of the lump sum becomes, in effect, a windfall for his or her family.
It is the Minister's belief that the introduction of an appropriate and effective scheme of PPOs will address the issues raised by the working group on medical negligence and periodic payments and will further the interests of justice. She is also of the view that a PPO scheme together with other legislative changes, such as the introduction of pre-action protocols for medical negligence, will have positive impacts on high medical insurance costs.It is vital that any such scheme ensure the continuity of payments to the plaintiff. Where the State has such a liability, security of payment is not an issue. However, in the case of private defendants, usually an insurance company, the matter is more complex. It will require the establishment of a financial infrastructure to ensure continuity of payment, while ensuring the State's position under any such scheme is well protected.
In 2013 the Government approved the drafting of the heads of a civil liability (amendment) Bill to implement the recommendations contained in the High Court working group report on periodic payments orders in personal injury cases with respect to awards made against the State and agreed that the extension of any such scheme to non-State defendants would be examined further in consultation with the Department of Finance. Subsequent to the Government's decision, the Department of Finance, through the State Claims Agency, commissioned an actuarial study of this issue. Following receipt of the study in April 2014, the Department of Justice and Equality established an interdepartmental working group to work through the technical aspects of the issue and devise the elements of the periodic payment scheme for the proposed legislation. In particular, the group examined the following issues: financial security mechanisms for PPOs for both State defendants and private defendants; the indexation of PPOs - the group examined the most appropriate indexation measure for inclusion in the legislation; variable or stepped PPOs; a variable PPO would allow parties to return to court to seek a variation of the order in certain circumstances, while a stepped PPO would include at the making of the order a number of stepped payments to cater for specific milestones in a claimant's life; the extent to which decisions to award PPOs should be mandatory or at the discretion of the court; and the scope of a PPO scheme - whether it would, for example, include both State and non-State defendants. The group has completed its work and made a number of recommendations on these technical issues.
The Minister for Justice and Equality, in conjunction with her colleague, the Minister for Finance, is actively considering the optimum implementation mechanism to ensure the financial security of PPOs. The Minister has informed me that she expects to be able to bring the necessary legislative proposals to the Government in the very near future, with a view to the necessary legislation being published and enacted this year.
I thank the Minister of State for his extremely comprehensive response. I appreciate very much the work done by him, the Minister and their officials in preparing it. The legislation is the way forward and something we should put in place at an early date. I know, however, that the Minister of State cannot give a timeline. However, will we see the draft legislation before the summer recess?
On behalf of the Minister, I apologise that she was not able to attend to participate in the debate. Within the answer she has clearly indicated that it will be done by the end of the year. The Government has given an undertaking that we will bring forward legislation during that period and fully intends to honour its commitment. It is the Minister's view that any scheme that introduces PPOs should be extended to cover cases in which the defendant is not the State. Having said this, the Minister believes one must recognise that in the introduction of a scheme covering all defendants we would have to ensure the State would not be exposed to unnecessary financial risk. I am sure the Government would not be thanked if we were to expose the country to financial risk in this way. It is clear from the Minister's answer that she is determined to ensure this matter will be dealt with within the year. I presume, although I have not discussed this with the Minister, the legislation will be presented to the relevant committee first.