Periodical payments in Ireland come a step closer

With the publication of the Civil Liability (Amendment) Bill 2017 on 11th January 2017, periodical payments in Ireland have come a step closer.

Those familiar with section 2 of the Damages Act 1996 will recognise a striking similarity to English and Welsh legislation; ensuring tax-free, 100% protected, index-linked payments for life.

A significant difference seems to be that any periodical payments must be linked to the Harmonised Index of Consumer Prices, which is a measure of a change in prices rather than earnings. However, the application of that measure must be reconsidered within 5 years from now. It is unclear whether, following that review, if a new measure is adopted it is retrospectively applied to all existing periodical payments Orders.

Another interesting difference relates to stepped changes in the periodical payments. The legislation states:

(7) Where—

(a) a court provides in a periodic payments order for a stepped payment, and

(b) prior to the date that the stepped payment is due to take effect, it is evident to the plaintiff that the anticipated change in the plaintiff’s circumstances on which that stepped payment was based will not arise,

the plaintiff shall, as soon as practicable and not later than 10 working days before the date on which the stepped payment is due to take effect, notify the court that made the periodic payments order and the paying party in writing that the anticipated change in the plaintiff’s circumstances which formed the basis for the stepped payment concerned will not arise.

(8) Where a court receives a notification under subsection (7) from a plaintiff in relation to a stepped payment specified in a periodic payments order, the court shall amend the periodic payments order concerned by making such adjustments to the order as it considers appropriate.

(9) Where a periodic payments order is amended under subsection (8), the court shall cause a copy of the order as amended to be sent to the plaintiff and the paying party.

It is unclear whether the step can be deferred to a later date if it is considered that the need will present, but just at a later date.

The inclusion of such terms give rise to an interesting advice issue, if a lump sum would have been based on a certain step-up on a specified date, but periodical payments damages could be deferred for a longer period; particularly given that this is a one-way bet - as the periodical payments cannot be brought forward if the event happens sooner!

It will be interesting to see whether all of these features remain when enacted.

The Bill and the Explanatory Note have been added to the Knowledge Bank.