Commission to rule on PI structures

THE LAW Commission will give its verdict next week on reforms to the system of structured settlements in personal injury cases.

Plaintiff lawyers say clients should have a statutory right to periodic payments rather than a lump sum.

Insurers are also broadly in favour of the principle of structured settlements but want to see changes to the system to make them a more attractive option to defendants.

The commission's report will contain recommendations on whether judges should have the power to impose structured settlements, whether the common law regime should be put on a statutory footing and whether settlements should be made more secure.

It will give details from a survey of how personal injury victims spend their damages and whether predictions on levels of compensation turn out to be accurate.

Jane Horton, secretary of the Association of Personal Injury Lawyers' damages special interest group, says one problem is that if the parties cannot agree on damages there is no power to negotiate a structure once a judge has declared a lump sum.

Tony Cherry, spokesman for the Forum of Insurance Lawyers, says structured settlements have proved expensive to administer.

“The single biggest encouragement would be a tax exemption for payments direct to the plaintiff from the life insurer following the American model.”