Radical Changes to Compensation Payments in Personal Injury Claims

23 July 2014 by Alice Ferris Orange
Radical Changes to Compensation Payments in Personal Injury Claims

From August 1st the defendant/insurers must refund certain welfare payments to the Department of Social Protection in advance of paying out compensation to claimants. The Injuries Board will also direct defendants how much they are due to repay to the State. Insurance companies will be required to apply for a statement of welfare payments, known as a Recoverable Benefits Certificate which will be supplied to the insurer within 28 days and it is then that the suitable payment must be refunded to the department. The Department of Social Protection will be entitled to a full refund as specified in the Certificate unless there is a court order saying otherwise. The Departments right to recover these payments is restricted to the following six categories; illness benefits, partial capacity benefits, injury benefits, incapacity supplements, invalidity pensions and disability allowances.

In cases of contributory negligence the amount repayable to the Department of Social Protection will be reduced pro rata.

The limitation period commences on the date on which the injured person first becomes entitled to a specified benefit as a result of the personal injury, and ends on the earliest of five years from that date or the date on which compensation is paid in final discharge of the claim. This new scheme will ensure that the state is not underwriting insurance companies.

One of the most radical changes for personal injuries practitioners is that it will bring all-in settlements to an end. Prior to this insurers could pay claimants a single lump sum including compensation and costs. This brought finality to the claim rather than have a dispute over costs drag on. Post 1st August 2014, a settlement must specify and distinguish between general damages and special damages including loss of earnings or other heads of claim.

Alice Ferris Orange, 23rd July 2014

For further information please contact Robert Browne ©

Key Contacts

Robert F. Browne
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IFSC, Dublin
He advises extensively on all aspects of Banking and Commercial Litigation, Injunctions, Financial Services and Insurance, Corporate and Private Client Litigation.

T: +353 (0) 1 859 0100

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E: rbrowne@mckr.ie