Periodical Payments

How compensation is paid following a serious injury is a matter which requires serious consideration to ensure that there are sufficient funds available to meet an individual’s long term needs.

At the conclusion of most successful personal injury compensation claims damages are paid by way of a single lump sum. In a number of more serious personal injury claims however, a lump sum payment will not be considered appropriate. Instead the Court will make an Order that all or part of the damages will be paid in the form of a continuing series of regular payments. Under the Court Order the ‘periodical payments’ (also known as PPO’s) will be made to the injured person for the rest of their life.

The Court has the power to impose an Order for periodical payments without the consent of the parties should it believe that it is in the best interests of the injured person. Periodical Payment Orders are rare however where damages are less than £1million.

In most cases the Order for compensation will include a lump sum to be paid immediately followed by periodical payments which are made on a regular basis. This will allow steps to be taken to meet existing needs such as the provision of appropriate accommodation, aids and equipment. Thereafter the purpose of the periodical payment is to provide the injured person with a regular income upon which they can rely. Special rules apply to periodical payments and in most cases the income received on an annual basis will not be taxed.

The Court Act does include a provision that the amount payable can be varied every year in line with the Retail Prices Index but also allows the Court awarding the PPO to modify this. In most cases the Court will link the Order to the Annual Survey of Hours and Earnings (ASHE). The payments may also change at normal retirement age to reflect the reduced income that would have been received at this time. Where PPO’s are awarded to younger individuals the annual sum may be increased at a later date to reflect the fact that parents may no longer be able to provide care and more professional help will be needed. Expert advice should be obtained to identify the level of compensation that will be required to ensure that the periodical payments adequately meet the needs of the injured person.

At Sintons our specialist personal injury solicitors have a wealth of experience in pursuing serious, complex and high value compensation claims. Where appropriate we can ensure that you receive the necessary expert advice to identify the potential benefits of a Periodical Payments Order and that all relevant issues are taken into consideration.

All personal injury claims are pursued on a No Win No Fee basis so you can rest assured that there is no financial risk.

To begin a personal injury compensation claim or obtain further advice with no obligation contact Sintons 24/7.