Record €30m birth injury settlement may spark demand for higher awards

The HSE’s agreement to a record €30 million birth injury settlement for a teenage boy with cerebral palsy is likely to spark demand for higher settlements and awards for catastrophically injured plaintiffs.

Pending the expected introduction next year of regulations concerning what discount rates should apply when assessing damages for future financial loss in such cases, the State Claims Agency may find it difficult to oppose such claims.

The value of 14-year-old Oran Molloy’s case, under the current discount rate, was an estimated €18-20 million, which his lawyers argued would not meet his lifetime care needs.

His solicitor Gillian O'Connor, of Michael Boylan litigation law firm, sought a €30 million settlement that would acknowledge interest rates are at abnormally low levels, meaning lower returns on investments. She said that while it was a lot of money, "the Molloys would give it back in a heartbeat" if what happened to Oran at birth "could be changed and the errors erased".

From Birr, Co Offaly, Oran sued the HSE over alleged negligence in the circumstances of his birth at Portiuncula Hospital in Ballinasloe on December 31st, 2006. His mother was admitted the previous day at 32 weeks' pregnant with an antepartum haemorrhage.

Emergency caesarean

Oran was born by emergency caesarean section and required intensive resuscitation. He suffered a lack of oxygen and was diagnosed with cerebral palsy. He cannot walk or stand unaided, uses crutches and a wheelchair for longer distances. He has normal cognitive function, attends school and his ambition is to be an electrical engineer.

Court documents on behalf of the HSE outlined that the Department of Justice has decided, based on a public consultation, that it is in the public interest to determine the discount rate in line with section 24.1 of the Civil Liability and Courts Act 2004. Discount rate means the rate applied by the High Court to determine the current value of any future financial loss.

Section 24 provides for the Minister for Justice to make regulations prescribing the discount rate and for the court to apply a different rate if it considers the rate prescribed by the Minister would result in an injustice.

The Minister is expected to soon approve the convening of an expert group to determine the appropriate rate in relation to such settlements, which would be reviewed regularly. It is expected that the group would be set up within six months and the Minister could make regulations in the first half of next year.

In the interim, lawyers representing catastrophically injured plaintiffs are likely to seek settlements akin to that agreed in Oran’s case.

Adjourn

The HSE admitted liability last month and then sought to adjourn the case for three to five years, essentially to see would interest rates improve.

After High Court president Ms Justice Mary Irvine refused an adjournment as not in Oran's best interests, the settlement was reached after mediation.

Oran’s side said the €30 million sum reflected a discount rate, or real rate of return of minus 1.5 per cent, not the discount rate of up to plus 1.5 per cent determined by the High Court in 2014, but that issue was not agreed by the HSE.

His lawyers previously told the HSE they would be happy with a periodic payment order (PPO), allowing for annual payments to meet his care needs over his lifetime, if that was linked to wage rather than price inflation. Because such a PPO was not available, they opted for a lump sum.