Consent orders in personal injury cases are a common occurrence. A consent order is an order made by the Court in terms that have been agreed by the parties to the proceedings and which are submitted to the Court for approval. A recent High Court case analysed the practice of the Irish courts accepting the terms of agreed consent orders submitted by the lawyers for the respective parties, without hearing evidence on the subject matter of the consent orders. The case dealt with the issue in the context of 343R of the Social Welfare (Consolidation) Act 2005 (“the Act”) and the State’s Recoverable Benefit and Assistance Scheme which has been in operation since 2014.
The Recoverable Benefit and Assistance Scheme (the “Scheme”)
The Scheme makes it compulsory for all compensators to repay the Department of Employment Affairs and Social Protection (the “State”) any amounts of illness related benefits that have been paid to an injured person by the State arising from the injuries sustained in an accident. The Scheme seeks to ensure that illness related benefits are reimbursed to the State.
According to the Act, Social Welfare payments are to be repaid to the State by the compensator liable for a personal injury. The compensator is only liable to the extent of that amount as ordered or assessed.
The Scheme in practice
It is common that personal injury proceedings are settled out of court. As part of the terms of settlement it might be agreed by the parties that the amount of recoverable benefits (which the Defendant is responsible for) be reduced, having regard to the circumstances of the individual case. If there is an agreement to reduce the amount of recoverable benefits, the State will not be fully reimbursed. It has been argued that this could unfairly prejudice the financial position of the State and taxpayer.
Matthews -v- Eircom
These were personal injuries proceedings which were settled before the full hearing of the case. The parties came before Mr. Justice Cross and asked that the case be struck out with an order for costs in favour of the Plaintiff. Liability was apportioned on a 50:50 basis, and it was agreed by the parties that there would be an appropriate reduction in the amount of recoverable benefits to be paid by the Defendant to the State.
The question for the Judge to consider was whether evidence needed to be heard regarding the amount of recoverable benefits due to the State, or if the Judge could grant the order, as agreed by the parties, without the need to hear evidence on the issue.
In delivering his judgment, Mr. Justice Cross clarified the intention of the governing legislation and in doing so held that consent orders which made apportionments of liability for the purposes of the Scheme were valid.
Cross J. referred to comments made by Mr Justice Keane in an academic article and also to two judgments by Mr. Justice Twomey.
In these judgments Twomey J. had refused to make consent orders which related to loss of earnings and recoverable benefits, even where the terms of the settlement had been agreed between the parties. Twomey J. noted that the term “court order” required an “independent and mutual determination of the evidence”. On this basis the court required a full hearing to make a consent order for the apportionment of recoverable benefits. Twomey J. held that a consent order agreeing reduced liability to pay reduced recoverable benefits could prejudice the financial position of the State and therefore the State’s consent was also required.
In addressing the position taken by Twomey J., Cross J. remarked, “It is unfortunate that Twomey J. was not advised of the universal practice of the personal injury courts or of the fact that this court has expressly found that it had jurisdiction to make declarations sufficient to satisfy s. 343R on consent”.
Cross J. affirmed the jurisdiction of the courts to make consent orders in settled cases without the need for a hearing of evidence on the issue.
Conclusion
The judgment of Cross J. is the first formal written judgment on this well-established practice in the courts. Whilst it cannot be conclusively stated that this issue is now resolved once and for all, it is likely that his judgment in Matthews -v- Eircom will be relied upon by litigants who settle personal injury proceedings involving a reduction of the compensator’s liability to pay recoverable benefits to the State.
This judgment is relevant to all personal injuries cases in this jurisdiction, and will have particular relevance for any Defendant in personal injuries litigation as it will have a tangible impact on its potential financial exposure.
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