High Court judges continue to have split opinions on orders made regarding loss of earnings

By: Conor Rubalcava BL

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Where an individual finds themselves out of work for a considerable period of time, such as following an accident at work, they may be entitled to illness-related social welfare payments. The Recovery of Benefits and Assistance Scheme, provided for in ss. 13–14 of the Social Welfare and Pensions Act 2013, allows the Minister for Social Protection (“the Minister”) to recover the value of such social welfare payments made to an injured party from the compensator in a related personal injuries action. However, if the injured party was contributorily negligent in the injury suffered, then the compensator does not have to repay the Minister for the full loss of earnings paid, with regard to s.343R (2) of the Social Welfare (Consolidation) Act 2005 (“the 2005 Act”).

If a case has settled and the injured party has been paid a total sum for loss of earnings by the Minister, but liability was apportioned on a 50/50 basis, the compensator is only liable to pay back half of the sum to the Minister for loss of earnings and not the full amount, as it is conceded that the compensator is only 50% liable.

This issue has split opinions among judges on whether it is good practice to allow consent orders apportioning liability in personal injury action even where it is sought solely for the purpose s.343R (2) of the 2005 Act.

Coffey J in Jarmula v DSG Solutions Limited [2022] IEHC 674 upheld this practice, stating that the function of the court is not to determine what is agreed but what is not agreed (para. 8). He applied this principle to any claim for loss of earnings, concluding that the parties must decide what is in issue and what is agreed upon. Coffey J went on to point out that the 2005 Act allows for the determination of how much liability can be attributed “through the mechanism of giving legal effect to the amount of the relevant compensation payment which has already been specified in a previous ‘assessment’ or ‘order of a court’ which relates to the claim" (para. 10). Coffey J did highlight that this “assessment” or “order” determines the compensator's liability to the state, but does not alter the fundamental arbitral process in which an order or assessment is made. It only gives the order legal effect.

In Kuczak v Tracy Tyres (Portumna) Limited (No. 2) [2022] IEHC 619, Twomey J differed. He was of the view that an “order from the court” denotes a decision “after hearing evidence under cross-examination in an adversarial hearing” (para. 20). Twomey J referred to an article written by Keane J in the Irish Judicial Studies Journal. He stated that (para. 68):

“the article highlighted concerns about whether courts should be putting in a court order what they are told by lawyers is the agreed proportionate liability of the parties (rather than independently verifying the position by means of evidence and cross examination during a court hearing), particularly when this is in both parties’ financial interests, but to the financial detriment of an unrepresented third party (the taxpayer).

 Barr J in Wilson v Leonardi and Anor [2022] IEHC 670 adopted the view of Coffey J rather than Twomey J, commenting that judges should be allowed to take consent orders apportioning liability where there is “some rational and fair basis for making those determinations” (para. 29). Coffey J made a similar point to Barr J in Jarmula. Counsel detailed to the Court the factual and legal basis upon which the apportionment was agreed. Coffey J noted at the end of his judgment that all legal practitioners should follow this practice as the Court has discretion to refuse or make the order sought. It can be argued that this will prevent a fraudulent order from being made where the injured party was not contributory negligent, but the compensator would only settle the matter if liability was split, causing the compensator to only pay a portion of funds to the Minister.

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