Compensation for Wrongful Injury in Ireland: Principles, Practice and Cost to the State

Abstract

Compensation for future loss due to wrongful injury in Ireland is currently determined at discount rates that do not take account of current market conditions and on a historic mortality basis. We quantify the impact of assessing damages using a more appropriate discount rate, mortality basis, and method of capitalising the loss. This results in the quantum of damages increasing significantly, and figures are given quantifying the increase by the term of the loss. Total outstanding liabilities of the State Claims Agency now exceed €3 billion, about half of which is in respect of catastrophic birth injuries caused by negligence in the delivery of maternity services. The change in the basis by which compensation is calculated outlined in this paper would increase the estimate of outstanding liabilities by over €1 billion and perhaps closer to €2 billion. We argue the current under-compensation of plaintiffs incentivises the State to settle by way of lump sum and is therefore an obstacle to the required legislation for appropriately indexed periodic payment orders.