Marian Fogarty

We know some parents of catastrophically injured plaintiffs would like to see a workable PPO being made available to them urgently.

However, claimants in catastrophic injury cases have been electing to take lump sum payments or interim payments in lieu of PPO’s following the ruling by the High Court in 2019 in the case of Hegarty v HSE. The High Court in Hegarty stated that the indexation rate (HICP) set out in the PPO legislation (Section 2 of the Civil Liability (Amendment) Act 2017) would result in under compensation for claimants as it did not take account of wage inflation. The State’s choice in introducing PPO legislation in 2017 tied to HICP imposed an avoidable financial risk on catastrophically injured plaintiffs here that would foreseeably fail the very people it was meant to protect.

Four years post the Hegarty decision, Part 3 of the Courts and Civil Law (Miscellaneous Provisions) Act 2023 was introduced and it provides for the setting of the indexation rate for PPOs by ministerial regulations. Following the Hegarty decision, the former Minister for Justice decided to establish yet another Inter-Departmental Group to advise on an appropriate indexation rate for PPOs. Their report was published in 2024. The new periodic payment index proposed in the July 2024 Report of the Inter Departmental Working Group on Identifying an Indexation Rate for Periodic Payment Orders (which is 80 per cent average Annual Rate of Change in nominal hourly health earnings and 20 per cent of the HICP (Harmonised Index of Consumer Prices)) is an improvement on the choice of indexation set out under the 2017 Civil Liability Act which was 100 per cent HICP.

HICP is used to measure consumer price inflation. The July 2024 Report acknowledged correctly that the indexation needed to be linked to a wage based index to ensure full compensation for the future care needs of catastrophically injured Plaintiffs. The Report, recognised labour costs comprise at least over half of a settlement and in many cases up to 90 per cent of it. Four options were considered as possible indexation rates for PPOs by the authors of the Report yet it appears they recommended the least costly option.

The ongoing delay on the part of the State in failing to introduce a workable PPO is prolonging a PPO regime tied to HICP that the State knew was structurally unsuitable for these claims. The State chose a consumer-price index (HICP) as a solution for a care based problem when the main future expense with catastrophically injured plaintiffs is always going to be professional care.

The Irish State continues to perpetuate the harm already caused to these catastrophically injured plaintiffs (already injured through negligence) with the ongoing and inexplicable delay in introducing a workable PPO.

PPOs are a good idea, they provide for less risk and more certainty provided they are appropriately index linked. The ministerial regulations allowing for a workable PPO should be signed/commenced without further delay.

Marian Fogarty is a solicitor at Cantillons