A High Court judge has said a law aimed at providing for the lifetime care needs of catastrophically injured people is "a dead letter" in its current form.
Ms Justice Deirdre Murphy ruled no judge could approve payments under the legislation. This was because of "weighty" evidence that the linking of payments under the 2017 law to the index of consumer prices meant plaintiffs who had been catastrophically injured would not get enough compensation.
The bulk of awards are spent on wages for carers. These generally rise faster than price inflation, meaning catastrophically injured people would be unable to pay for carers in the last years of their lives.
The judge said the expert evidence was that "no competent financial expert" would recommend periodic payments linked to the consumer price index to provide for the future care needs of such a plaintiff.
The court has the power to refuse approval for a periodic payment order linked to the index and can assess an interim payment, a lump sum or a payment on account.
However, she said it had no power to fix an order to a different index as only the legislature could do that.
She said therefore, the law in its current form was "regrettably a dead letter". The one potential chink of light, was if parties could agree on fixing an order for periodic payments to an index taking account of wage inflation.
This was a test case with significant implications for many catastrophically injured plaintiffs.
The 2017 Civil Liability Amendment Act commenced last year and provides for periodic payment orders (PPOs) designed to meet the needs of plaintiffs over their lives.
A PPO is a full and final settlement but is paid out periodically.
Ms Justice Murphy's judgment was given in the case of a 4-year-old boy who was catastrophically injured after his birth at Cork University Hospital in 2014. He suffers from cerebral palsy and requires lifetime care.
The hospital admitted negligence and an interim €1.6 million settlement was agreed in October 2016. An assessment of the rest of his claims was adjourned to last month.
The boy's solicitors had engaged with the State Claims Agency about a further interim payment. But the agency had said it would only deal with such plaintiffs on the basis of PPOs, following the enactment of the 2017 legislation.
The High Court President, Mr Justice Peter Kelly directed a preliminary hearing on the issues.
Ms Justice Murphy found the 2017 Act does not get rid of the court's inherent power to assess damages for the boy's needs on an interim basis. She held the best interests of the boy would be met by an interim three year payment.
She noted that the inter-departmental working group which opted for this kind of indexation wanted to minimise volatility in the payments and provide as much certainty as possible for defendants.
It had rejected the wage based indexation used by the courts in England and Wales.
But she said the Court's duty and obligation is to provide 100% compensation to a catastrophically injured plaintiff.