The Minister for Justice, Helen McEntee, has accepted recommendations from two expert groups that will significantly impact compensation payments in personal injury cases.
Indexation Rate for Periodic Payments Orders (PPOs):
- The current rate, based on general inflation (HICP), was deemed inadequate by the High Court in 2019 as it did not account for wage inflation in the healthcare sector.
- The new proposed rate will be a combination of 80% average annual change in health sector earnings and 20% HICP, ensuring fairer compensation for future care needs.
Discount Rate for Lump-Sum Payments:
- The current discount rate, used to calculate lump-sum awards for future losses, will remain unchanged at 1% for future care costs and 1.5% for other financial losses.
- This decision aligns with the High Court's 2014 ruling and subsequent confirmation by the Court of Appeal.
- However, an expert group will reassess the rates every three years, with a 'trigger' mechanism in place to allow for reviews in case of significant economic changes or successful court challenges.
