Personal Injuries Claims – the advent of recoverable benefits by the State

Mark Kelly examines the effect of this legislation in the context of personal injuries claims. 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 sections are due to be commenced by the Minister for Social Protection on 1 August 2014. The new provisions will allow the State to recover certain social welfare benefit payments arising from personal injuries claims. Certain non-deductible (as classed now) benefits such as child benefit, one-parent family allowance and widower pension will remain non-deductible. Similarly, compensation awards by most statutory redress boards will remain exempt from any recovery by the State. What you need to know Injury benefit, disability benefit, illness benefit and pay-related benefit will all be recoverable by the State from a personal injuries compensation award. Essentially, a defendant (employer, insurer, driver, occupier or company) or the Injuries Board will be obliged to do the following before making a compensatory payment to an injured party;

1. Apply to the Minister for a statement of recoverable benefits;
2. The Minister must provide this statement within 4 weeks of the request being made;
3. On receipt of the statement, the defendant can request the Minister to provide a breakdown of the recoverable benefits;
4. The defendant shall make payment to the Minister in respect of the recoverable benefits before making any compensatory payment to the injured party.

If payment is not made to the Minister for the amount of the recoverable benefits, the Minister may demand such payment within a five year period from the date of the compensatory award. The scheme will inevitably lead to increased costs to defendants regarding personal injuries claims. The Positives

• If a defendant pays an equal amount to the total amount of recoverable benefits, they may in turn reduce the compensation payment payable to the injured person by that amount, reimburse the Minister and pay the balance to the injured party.
• The scheme ensures against double compensation.
• 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.

The Negatives

• Failure to comply with the scheme could see a party liable to the Minister for up to five years.
• 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 obviously lead to an increase in costs for defendants.

The Department of Social Protection is due to issue a Guidance note on how the scheme will work over the coming weeks. Mark Kelly is a solicitor in the Dispute Resolution and Litigation team. For further information please contact Mark Kelly or Killian O’Reilly at the Dispute Resolution and Litigation team at McDowell Purcell.