We use cookies to improve your experience on this website. Read More Allow Cookies

Periodic Payment Orders and the Civil Liability (Amendment) Act 2

By: David Browne | Posted on: 10 Sep 2020

Periodic Payment Orders and the Civil Liability (Amendment) Act 2

Catastrophic Injury Cases and Appropriate Compensation


Calculating the appropriate level of compensation for a Plaintiff who has suffered catastrophic injuries due to Medical Negligence, or, indeed, any other form of Negligence, is a difficult task, both in terms of identifying the sum of money that will properly provide for the Plaintiff’s care needs and in terms of the emotional toll such a process can take on the Plaintiff and/or their family.


The process usually involves the Plaintiff being assessed by myriad experts from both legal teams, with a view to calculating the Plaintiff’s, often significant, care needs into the future. A particularly agonising part of this process for the Plaintiff and their family is the necessity of calculating the Plaintiff’s projected Life Expectancy. This is a legal necessity as in order to determine what sum of money would provide for the Plaintiff for the rest of their life, it is necessary to determine how long the Plaintiff is expected to live. However, it can not be doubted that having one’s, or a loved one’s, life expectancy subjected to detailed assessment and, subsequently, legal argument, is a challenging experience.


The legal difficulty with such cases is that, traditionally, courts award a final lump sum award in Personal Injuries cases. The finality of such an award is a problem in catastrophic injuries cases due to the fact that calculating life expectancy is an inexact science. There is always the risk that the Plaintiff will outlive their life expectancy. This is undoubtedly a good thing on a personal level, but can lead to financial difficulties as the lump sum award will not have accounted for these extra years and thus the Plaintiff may find themselves unable to provide for their care needs. Inversely, the Plaintiff may tragically pass before their projected life expectancy, in which case they will have been ‘over-compensated’, thereby providing a ‘windfall’ to their families.


Interim Awards


In order to circumvent the above difficulties, the Irish courts developed the practise of making Interim awards. This is, essentially, an award that covers a certain period into the future only. For example, a lump sum award would be made covering a period of 5 years into the future. If the Plaintiff lives to that date, then the court process starts anew and the Plaintiff’s needs are assessed again and a further interim award is made. While this significantly narrows the potential of over/under-compensation, on a human level it can be deeply unsatisfactory. Having to go through the process of expert assessment and legal wrangling even once can be trying. Having to do it every 5 or so years can leave Plaintiffs and their families feeling like they are never truly free of the process.


Periodic Payment Orders – A Solution?:


In 2015, the Working Group on Medical Negligence and Periodic Payments considered the option of equipping judges to make ‘Periodic Payment Orders’ (PPOs).


In simple terms, a Periodic Payment Order involves compensation being provided by the Defendant to the Plaintiff on a periodic basis – ie a certain sum of money each year or month. The payments would cease upon the passing of the Plaintiff.


Operating in this way, PPOs would provide a solution for the over/under-compensation issue in a way that does not subject the Plaintiff and/or their family to continuous litigation.

Periodic Payment Orders where introduced by s.2 of the Civil Liability (Amendment) Act 2017, which inserted Part IVB into the Civil Liability Act 1961. Courts were given discretion to make PPOs having considered, inter alia, “the best interests of the Plaintiff” (s.51I(2)(a) of the 1961 Act). The legislation makes limited provision for changing circumstances in the future, allowing the Court to make “stepped payments” (s.51I(4) of the 1961 Act). This allows the Court to provide, beforehand, for the payments to increase/decrease upon the occurrence of certain events that might be expected to increase/decrease the Plaintiff’s care needs. Some of these factors are listed in s.51I(5) of the 1961 Act. They include occurrences such as the Plaintiff turning 18, entering Third-Level Education etc.


Despite these apparent strengths, I, as a legal advisor, would rarely recommend a PPO as appropriate and Judges, who must consider the ‘best interests of the Plaintiff”, have shown reluctance to utilise PPOs, with one High Court judge, Ms Justice Deirdre Murphy, describing the law on PPOs as “regrettably a dead letter”.


So what is the problem?


The Problem with PPOs:


There are two main problems with PPOs as they currently operate: the index-linking of PPOs to the Harmonised Index of Consumer Prices (HICP) and the inability of Plaintiffs to apply for a variation of PPOs.


Index-Linking of PPOs to HICP:


An obvious difficulty with under-compensation would arise if a Plaintiff’s periodic sum was not increased periodically to take account of inflation. In order to resolve this, s.51L of the Civil Liability Act 1961 provides that periodic payments under the Act are to be index-linked to the HICP. The problem with this is that earnings, and thus the earnings of carers, will increase at a greater rate than the HICP. Therefore, as time goes on the Plaintiff’s money will buy them less and less care. Thus, as Ms Justice Murphy put it, no competent financial advisor would recommend a PPO for a catastrophically injured Plaintiff. And, consequently, I might add that no competent legal advisor could so recommend either.


It should be noted that s.51L(3) of the 1961 Act does allow the relevant Minister, here the Minister for Justice and Equality, to review the method of Index-Linking with a view to measuring its appropriateness and changing it if necessary. Unfortunately, and perhaps short-sightedly, s.51L(2) of the 1961 Act provides that such a review can not occur until 5 years after Part IVB’s commencement. Thus, the next possible review date is not until October 2022. Until that time, or unless there is some statutory intervention in the meantime, PPOs will rarely be appropriate.


Inability to Vary PPOs:


It was noted above that at the time of making a PPO, a Judge can make provision for ‘stepped-payments’. In this way the Court can provide for changing circumstances in the future. However, there is no provision in the 1961 Act for a Plaintiff to return to Court to vary a PPO if some unforeseen change in circumstances should occur.


The pitfalls here are obvious. The making of ‘stepped-payments’ involves a Judge looking forward and attempting to anticipate changes of position that may, or may not, occur. There is no recourse for a Plaintiff (or indeed a Defendant) who suffers some unforeseen setback and requires additional compensation to provide for their care needs (or for Defendants should the Plaintiff recover in some manner and not require the full sum awarded). A legal advisor would be very slow to recommend a PPO in these circumstances, for fear that the Plaintiff would find themselves locked into a fixed payment that does not fully meet their care requirements.


Considering these two shortcomings of the legislation and considering her duty under the legislation to consider the Plaintiff’s Best Interests, Ms Justice Murphy considered that it would almost never, considering these issues, be in the Plaintiff’s best interests to award a PPO. Therefore, the legislation was, in her view, a ‘dead letter’.




Given the pitfalls of both final lump sums and interim awards, the failure of the legislature to provide for a workable PPO system is regrettable. It is clear that the Minster’s hands are tied until October 2022, and therefore the onus is on the Oireachtas to introduce reform in this area. Same is badly needed on both a legal and human level. 


David Browne has advised Plaintiffs and Defendants on structuring compensation payments for “life altering injuries”.


David Browne

Litigation Partner,

BDM Boylan Solicitors,