Clare Daly (Dublin Fingal, Independent)
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97. To ask the Minister for Justice and Equality the reason the decision was taken to index link periodic payments in catastrophic injury cases to the consumer price index, CPI, in the Civil Liability (Amendment) Bill 2017, in view of the fact that the report of the working group on medical negligence in 2010 recommended the use of a specialised index, linked to care costs, which are inadequately captured by the CPI; and if she will make a statement on the matter. [6842/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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As the Deputy is aware, the Working Group on Medical Negligence and Periodic Payments recommended the introduction of a dedicated index to apply to periodic payments orders (PPOs) which would allow periodic payments to be index-linked to the levels of earnings of treatment and care personnel and to changes in costs of medical and assistive aids and appliances.

However, 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 was considered in detail by an Inter-Departmental Working Group on Legislation on Periodic Payments Orders, which was established to examine the technical aspects of introducing PPOs. The Working Group was of the view that the index specified in the legislation should provide as much certainty as possible for defendants in terms of projected increases in their financial liabilities, should not lead to an unacceptable degree of statistical fluctuation, should not be unduly volatile and should take account of the type of costs incurred by claimants and the changes to those costs over time. A number of different options were considered by the Working Group which concluded that, to meet the criteria set out above, an index based on the Irish Harmonised Index of Consumer Prices (HICP), and not the Consumer Price Index, as suggested by the Deputy, should be the initial index specified in the Bill.

Section 2 of the Civil Liability (Amendment) Bill 2017 provides for the insertion of a new Part IVB (sections 51H to 51O) into the Civil Liability Act 1962 to give the courts power to award damages by way of periodic payments orders in catastrophic personal injury cases. The new section 51L deals with the issue of indexation of periodic payments. 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.

However, the Deputy may wish to note that section 51L will also require the Minister for Justice and Equality, not less than 5 years after the commencement of the new Part IVB, to carry out an initial review of the application of the HICP to determine its suitability for the purposes of the annual adjustment of the amount of payments provided for under PPOs. If, following the review, an alternative index is considered to be more suitable for the purposes of PPOs, the Minister for Justice and Equality may, with the consent of the Minister for Finance, make regulations specifying an alternative index to be used in adjusting payments under PPOs. Section 51L also provides for further reviews of the suitability of the index at 5-yearly intervals.