Reform on periodical payments orders welcomed as ‘long overdue’

03 Sep


PROPOSED legislation to give Scottish courts the power to order damages awards to be paid periodically has been hailed by the Faculty as a “long overdue reform”.

The Faculty has also welcomed provisions in the Damages (Investment Returns and Periodical Payments) (Scotland) Bill to change the way the personal injury discount rate is set and reviewed.

Views on the Bill were sought by the Scottish Parliament’s Economy, Jobs and Fair Work Committee

Currently, unlike in England and Wales, courts in Scotland can make a periodical payments order, but only when both parties consent.

In a response, the Faculty said it agreed that legislation was required in this area, and in relation to the discount rate.

“We have no doubt that it is necessary to provide Scottish courts with the power to order damages to be paid by way of periodical payments orders. We think that the draft provisions provide a reasonable basis to allow this long overdue reform to be made,” stated the Faculty.

“We think that particularly where there is a significant dispute between the parties relative to life expectancy, the ability to make a periodical payments order will be attractive and will be used.”

In relation to the discount rate, the Faculty said: “We agree that a statutory methodology for calculating the discount rate is necessary. We also agree that establishing a timeframe for regular review of the discount rate is essential.

“We find it difficult to comment upon some of the specific provisions such as the standard adjustments and the composition of the notional investment portfolio. We would defer to expert professional opinion.

“The key point is that someone who has been catastrophically injured and who is in need of permanent round the clock care should not be required to take any significant risk with investment to meet those anticipated needs.”

The Committee voiced concerns that views in previous consultations in this area had tended to be polarised between pursuer and defender interests.

The Faculty said it was an independent body, whose members regularly gave independent advice to claimants and to defenders.

“Our response to this consultation and our responses to previous consultations in this area have always been intended to be independent. Our general impression is that, subject to the matters which we would defer to expert professional opinion, the Bill balances the interests of parties.”