Difficulty
The difficulty for courts in catastrophic injuries claims is that the costs of future care and medical treatment are hard to quantify. Where such uncertainty exists, the courts have approved interim awards.
This approach requires court applications at each interim stage, involving submissions regarding the plaintiff’s progress and costs of treatment, which proves unsatisfactory for plaintiffs and defendants alike.
The court’s inherent jurisdiction to approve interim payment orders was confirmed by Barr J in Miley (a minor) v Birthistle, in which it was held that a lump-sum award could result in a grave injustice to the defendant.
Accordingly, the future care-costs element of the claim was adjourned to allow time for the plaintiff’s treatment to take effect, at which stage it was hoped that a clearer picture as to future care costs could be presented.
Urgent requirement
In another catastrophic injuries claim, Russell (a minor) v HSE, Irvine J expressed the urgent requirement for the legislature to act in respect of prescribing how awards of this nature should be dealt with.
The court referred to the fact that lump-sum awards in respect of catastrophic injuries are “a crude instrument which can give rise to injustice to either party where the greater the inaccuracy of the agreed predicted life expectancy, the greater the potential injustice”.
When the costs of medical treatment and care are so high, it is clear that any miscalculation could result in either overpayment by the defendant or under-compensation of the plaintiff.
Outdated
The court described the making of lump-sum awards to compensate for past and future losses, to include future pecuniary loss, in catastrophic injury cases as “fallible, unjust and grossly outdated”, and recommended that such an approach be abandoned.
The court called for legislative reform by pointing to the Report of the Working Group on Medical Negligence and Periodic Payments, which concluded that the English system of compensation by periodic payment orders (PPOs) represented the most modern and effective model for the payment of ongoing care and associated costs in such actions.
In Britain, section 2(1) of the Damages Act 1996 provides that a court awarding damages for future pecuniary loss in respect of personal injury may order that the damages are wholly or partly to take the form of periodical payments.
Lord Lloyd in Wells v Wells held that PPOs benefit those whose prognosis may be uncertain at the date of trial. It is this very scenario that it was hoped would be encapsulated by the legislation in this jurisdiction.
Damages
The Civil Liability (Amendment) Act 2017 (enacted on 1 October 2018) amends the Civil Liability Act 1961 and makes provision for PPOs to be made in respect of the whole or part of the damages awarded, which relate to:
- The future medical treatment of the plaintiff,
- The future care of the plaintiff,
- The provision of assistive technology or other aids and appliances associated with the medical treatment and care of the plaintiff, and
- Damages in respect of future loss of earnings.
The court is required to have regard to the best interests of the plaintiff and the circumstances of the case, including the nature of the injuries suffered by the plaintiff and the form of award that would best meet their needs.
Notable distinction
A notable distinction is that the British legislation provides that PPOs be linked to the annual survey of home-carer earnings (Earnings and Hours Worked, Care Workers: ASHE Table 26).
No such index exists in Ireland. Notwithstanding the recommendations of the working group in respect of the establishment of the necessary care-costs index, the act was passed, requiring referral only to the Harmonised Index of Consumer Prices (HICP), with no discretion or deviation permitted by the court.
Under the act, provision was made that the Minister for Justice undertake a review after five years to determine the suitability of the HICP for the purposes of the annual adjustment of the amount of payments provided for under PPOs.
The 2019 decision in Hegarty v HSE highlighted that a review of the act would be more appropriate, holding that the indexation provided for under the legislation was not in the best interests of the plaintiff, rendering the act unworkable.
Brain injury
The plaintiff in Hegarty suffered a hypoxic brain injury at birth, for which the defendants admitted liability. The matter was compromised, and the terms of settlement were ruled in October 2016, where an interim order was made for payment of a sum in respect of general damages.
The balance of the plaintiff’s claim, being the future accommodation costings and loss of earnings, was adjourned for a period of three years, where it was envisaged that further damages would be assessed by either a lump sum, further interim settlement (the option preferred by the plaintiff), or PPO (the preferred option of the defendant).
On the adjourned date in October 2019, the plaintiff sought a further interim payment; however, the defendant believed that, since the legislation was now in place, a PPO would be more appropriate. Numerous other similar matters were adjourned on the same basis, awaiting the implementation of the act.
Questions for the High Court
In December 2016, the plaintiff was made a ward of court, and the matter came before the President of the High Court in his capacity as protector of the ward. Kelly P directed trial before a judge of the High Court on the following issues:
- Whether the legislation ousts the inherent jurisdiction of the court to assess damages for the ward’s needs, whether by reference to the best interests of the ward or otherwise?
- If jurisdiction is not ousted, a determination as to what are the best interests of the plaintiff herein?
- Whether the court is precluded by the act from fixing an increase other than the amount specified in the HICP, as published by the Central Statistics Office?
- Whether, and to what extent, a court retains jurisdiction to identify a means by which indexation of the recurring payment can be achieved that would avoid the risks of the recurring compensation falling behind, having regard to wage and medical inflation?
In November 2019 in the High Court, Murphy J dealt with the above queries as follows:
- The inherent jurisdiction of the court is not ousted by the act. In McEnery v Sheahan (2019), the Supreme Court confirmed that legislative changes should not be presumed to alter existing jurisdiction in the absence of clear evidence.
- The court referred to the working group’s report, which was the genesis of the legislation, in particular, the recommendation that an earnings-related index be established to assist in quantifying changes over time in levels of care costs.
The court analysed the indexation options outlined in the act, noting with some frustration that the court was not permitted to apply any indexation other than the HICP. It is only the minister who may specify an alternative index (section 51).
Periodic payments
The court described as “overwhelming” the evidence presented that indexation of periodic payments by reference to the HICP will result in under-compensation of a plaintiff.
The various experts insisted that, for the purposes of calculation of care costs with any accuracy, the annual amounts must be linked to a wage-based index to ensure full compensation for future care needs, and that payment linked to the HICP will not provide the plaintiff with 100% compensation in respect of his future care and medical-treatment needs.
Evidence was submitted that calculated the probability of a shortfall of up to 52% of the plaintiff’s annual care costs at the age of 50, should a PPO linked to the HICP be applied.
The court concluded that, in circumstances where “the expert evidence is unanimous that the indexation chosen (HICP) will not meet the future care needs of catastrophically injured plaintiffs, then no judge charged with protecting the best interests of a plaintiff, which is the first requirement of the exercise of a court’s discretion under the legislative scheme, could approve such a PPO”.
‘A dead letter’
The court went on to state that, “in its current form, therefore, the legislation is regrettably, a dead letter. It is not in the best interests of a catastrophically injured plaintiff to apply for a PPO under the current legislative scheme”.
The act confers no power on the courts to alter, amend or adjust the HICP index. The court has no inherent jurisdiction in relation to PPOs, and its power in relation to same is as provided for in the statutory scheme.
The court indicates that a “chink of light” exists pursuant to section 51I(3), which permits parties to agree on the terms of a PPO, which may then be ruled by a court.
Regrettable
It is regrettable that the legislature did not follow the recommendations of the working group and that the long-anticipated act did not prove to be the solution to the concerns raised by the courts and the parties to claims involving catastrophic injuries.
The crucial component of PPOs of this nature is the provision of care costs with accuracy to provide certainty for all parties.
Though the courts are hamstrung by their lack of discretion as to the indexation to apply, parties are not so restrained and may agree an index of their choice, which PPO may then be ruled on by a court.
In the meantime, Murphy J suggests the use of payments on account against the ultimate award as a more efficient and less costly alternative, in order to ensure that the plaintiff’s ongoing needs are appropriately met.
In Hegarty, the defendant submitted that the new legislative scheme added another string to the bow of the High Court. However, as Murphy J put it: “Unfortunately … it is a string which may not be played as frequently as might have been hoped.”