Recent Developments in Personal Injury Claims

By February 27, 2015 No Comments

In a personal injury action a plaintiff will be entitled to recover for lost earnings and other lost pecuniary benefits that are caused by their injuries.

If the injured person is unable to work because of personal injury, accident or occupational disease, they are likely to qualify for social welfare benefit during the specified period. If you receive compensation, it is likely that the amount of the compensation would include the loss of earnings which you incurred. In the past the amount of the social welfare benefit you received was offset against your loss of earnings, in the case of road traffic accidents and work-related accidents. This offsetting arrangement has now ceased.

From the 1st August 2014 Sections 13 & 14 of the Social Welfare and Pensions Act 2013 will abolish the distinction between deductible and non-deductible social welfare payments in personal injuries cases. The new provisions will allow the Department of Social Protection to recover certain illness-related social welfare payments from compensation awards made to the person/persons as a consequence of personal injuries claims. These benefits are recovered from the compensator and not from the injured person.

Benefits including; Injury benefit, disability benefit, illness benefit and pay-related benefit will all be recoverable by the Department of Social Protection from a personal injuries compensation award.Non-deductible benefits such as child benefit, widower/widow’s pension and one parent family allowance will remain exempt from any recovery by the State.

The Defendant will be under a legal duty to refund certain welfare payments to the Department of Social Protection prior to paying out compensation to claimants in non-fatal personal injuries cases. The scheme will inevitably lead to increased costs to defendants regarding personal injuries claims and may even reduce the compensation payment payable to the injured person.

Insurance companies will have to apply to the Department of Social Protection for a statement of welfare payments known as a Recoverable Benefits. This is the certificate made to a claimant arising out of injuries sustained in any individual case. The certificate will be furnished to the insurance company or the Injuries Board within four weeks after which the appropriate payment must be refunded to the Department. Only then can the claimant be paid compensation for general damages and loss of earnings.

It would appear the Department of Social Protection is of the view that this scheme ensures that the claimant is not compensated twice over in respect of the same accident, injury or disease.

The scheme should be an incentive for a defendant to settle a claim as early as possible if there is no issue in relation to liability, as the defendant is only liable for the recoverable benefit from the date of the accident up to the settlement of the claim.

There is no provision in the new scheme for the allocation of contributory negligence to the injured party or where a defendant contests liability but still wishes to compromise and settle the claim. This may lead to an increase in parties wishing to fully defend claims, which will lead to an increase in costs for defendants. It is likely that if the Defendant is found to be seventy five per cent responsible and the claimant is found to be twenty five per cent responsible, the Department of Social Protection will seek a refund of seventy five per cent of the relevant benefits paid.

For further information please contact Hughes Murphy Solicitors.