Claims Ireland

Working group on payments for catastrophic injuries set up

16-Apr-2010

The President of the High Court, Mr Justice Nicholas Kearns, has established a working group to examine how damages are paid in catastrophic injuries cases. Here he outlines the background

DAMAGES IN personal injury cases are awarded on a one-off or lump sum basis. In the vast majority of cases, the awards reflect an attempt by the courts to ensure that a claimant is adequately compensated for the damage done and for the injuries suffered. Adequate compensation can be defined as compensation intended to place the plaintiff in the position he would have occupied if the injury had not been suffered, insofar as that objective can be achieved by an award of money.

From the defendant’s perspective, the reluctance of the courts to impose any continuing obligation to make reparation brings a welcome finality to litigation. This is a rudimentary concept which accommodates the generally desirable “clean break” nature of most claims, allowing the respective parties to move on with their lives once a claim has been concluded. In most cases, the lump sum award adequately compensates the plaintiff, as far as this is possible. That is, the plaintiff is put back in the position he would have occupied had the injuries not been suffered.

However, serious defects in the current system are evident in respect of claims involving catastrophic injuries such as serious brain injuries suffered at birth. Difficulties are encountered once liability has been established and an assessment of damages is undertaken by the court.

In cases involving catastrophic injuries, the court will usually be required to calculate the cost of the plaintiff’s future care based upon evidence of estimated life expectancy. This exercise involves an amount of speculation and informed guesswork, undertaken by medical practitioners and actuaries who take a “snapshot” of the plaintiff’s current care costs and project them into the future.

This “lump sum” approach dictates that there is no recourse for a plaintiff who exhausts his fund by exceeding his projected life expectancy.

Catastrophically injured persons of sound mind are entitled to manage their own resources after an award of damages. Some may be youthful or inexperienced, or both. Others may invest unwisely and unsuccessfully, despite professional advice. Recent economic events illustrate the difficulties facing investors who need a specific long-term return upon investments.

There have been many catastrophically injured persons who have spent their final years (sometimes decades) without the means to pay for their care because the damages awarded have proved inadequate. Some are currently in that position. All have been injured by the unlawful acts or omissions of others.

Similarly, a defendant has no recourse if a large lump sum is paid to a plaintiff who succumbs to his injuries earlier than expected. The next of kin of some deceased plaintiffs have received unintended multi-million euro windfalls. Ironically, some have been those very persons whose negligence originally caused the catastrophic injury.

The scale of awards actually required to compensate for projected future care is set to rise exponentially because of the spiralling costs associated with medical treatment and care.

A different approach may be required to compensate for future losses such as these. It is thus timely to consider afresh whether our compensation system offers the most equitable way of ensuring that justice is done and seen to be done in this area.

With a view to addressing these concerns, I have recently established a working group with, inter alia, the following terms of reference: To consider whether certain categories of damages for catastrophic injuries can or should be awarded by way of periodical payment orders, and to make such recommendations to the President as may be necessary; and to provide such draft Legislation, Regulations, Rules of Court as may be necessary to give effect to the group’s recommendations.

The working group is chaired by Mr Justice John Quirke and comprises Mr Justice Vivian Lavan, High Court; Ms Justice Mary Irvine, High Court; Michael Boylan, Augustus Cullen Law Solicitors; Ciaran O’Rorke, Hayes Company, Solicitors; Denis McCullough, SC; Patrick Hanratty SC; Ciaran Breen, director, State Claims Agency; John Casey, CEO, Motor Insurance Bureau Ireland; John Kenny, Department of Justice; Mike Kemp, CEO, Insurance Federation Ireland; Noel Rubotham, Courts Service; Gráinne O’Loghlen, Courts Service; James Reilly, Patient Focus; Maire Reidy, judicial fellow; Brendan Savage, BL, special assistant to the group, and Marie Coady, secretary.

The group has commenced a wide-ranging consultation process with such bodies as the Law Reform Commission, the Health Services Executive (HSE), the Personal Injuries Assessment Board (PIAB), the State Claims Agency and its UK counterpart, the NHS in the UK and its advisers, the Wards of Court Office, the Motor Insurers Bureau of Ireland (MIBI) and its UK counterpart, the Insurance Industry Federation, the Medical Protection Society, Acquired Brain Injury Ireland, the National Rehabilitation Hospital, the Judiciary in Ireland, the Bar Council, the Law Society, and many others.

The working group will attempt to achieve what consensus is possible and will also consider how case management and other streamlining measures may improve arrangements for progressing medical negligence claims. These cases can be harrowing for plaintiffs and medical practitioners, and are often protracted and difficult.

I believe efficiencies can be introduced which will simplify such litigation and effect significant savings in legal costs. The working group will consider various case management measures in this context with a view to identifying any shortcomings within the system. It is intended that the working group will report by the end of November this year.