Dáil Éireann Debate, Tuesday - 26 May 2026
824. Deputy Ruairí Ó Murchú asked the Minister for Justice, Home Affairs and Migration if he is aware of the ongoing financial consequences faced by people with lifelong disabilities who received medical negligence or catastrophic personal injury awards (details supplied); and if he will make a statement on the matter. [39644/26]
View answer825. Deputy Ruairí Ó Murchú asked the Minister for Justice, Home Affairs and Migration if he is aware that many medical negligence or catastrophic personal injury awards were agreed on a full and final settlement basis (details supplied); and if he will make a statement on the matter. [39645/26]
View answerI propose to take Questions Nos. 824 and 825 together.
I am aware of the potential difficulties that may arise in some situations where settlements are agreed by parties to litigation on a full and final basis. In this context, two expert working groups were established in 2023 by the then Minister for Justice, one relating to the index rate to be applied to Periodic Payments Orders (PPOs) and the other relating to the discount rate to be applied to lump sum awards, to future proof such amounts against financial loss.
PPOs are an alternative to lump sum awards as a method of paying compensation to catastrophically injured people. Instead of receiving compensation in one tranche, a payment is made annually on an agreed date. The annual payment amount is calculated to meet the cost of permanent and long-term care and treatment. An indexation rate is applied to the annual payment amount to ensure that the amount keeps pace with inflation. PPOs have only been available as a legal alternative to lump sum award since October 2018.
The Periodic Payment Orders Indexation Rate - Report of the Inter Departmental Working Group was submitted to the then Minister in 2024. It recommended that the Periodic Payment Index should comprise a combination of harmonised index of consumer prices and Annual Rate of Change in nominal hourly health earnings for the health sector.
The discount rate is the rate used by the courts in cases involving catastrophic injuries to determine the size of a lump sum award necessary to compensate a person for future loss. At present, the discount rate, as determined by the High Court and the Court of Appeal in the Russell vs. HSE case, stands at 1% for future care costs and 1.5% for other economic or pecuniary losses.
Following on a consultation exercise undertaken by the Department, the policy decision was taken that the discount rate would, where appropriate, be set by the Minister for Justice by way of regulations made under Section 24 of the Civil Liability and Courts Act 2004. To assist in setting an appropriate discount rate for use in cases involving catastrophic injuries the Expert Working Group was established in June, 2023. The Group was tasked with providing advice to the Minister on an appropriate discount rate for use in personal injury cases and was also asked to advise on the assumed risk profile of claimants.
The Setting of the Discount Rate Report of the Inter Departmental Working Group was submitted to the Minister in 2024. It recommended:
• There should not be any change in the discount rate set by the High Court, and confirmed by the Court of Appeal in Russell v HSE.
• Plaintiffs in catastrophic injury cases should be considered as having a risk averse profile.
• The discount rate should be kept under review and periodically assessed at 3-yearly intervals.
• A “trigger” mechanism should be introduced to enable the commencement of a review of the discount rate if there is a marked change in economic circumstances, or the rate is successfully challenged in court.
The then Minister approved the recommendations of both of the above reports in 2024.
Drafting instructions have been issued to the Office of the Parliamentary Counsel in relation to two sets of Regulations, one in relation to the indexation factors for PPOs and the other in relation to the discount rate to be applied to lump sum awards. Drafting of the necessary regulations is continuing with a number of legal matters being considered. I intend to sign and commence both regulations as soon as these matters have been resolved.
