Periodical Payments Following Personal Injury & Medical Negligence Settlements

Following a personal injury or medical negligence settlement, a Claimant will receive compensation from the responsible party for the injuries and losses that they have sustained as a result. In a lot of cases this settlement will be paid as a single lump sum payment. However, in claims involving more serious injuries where a Claimant may have care or other future needs as a result, the Courts may decide that part of the settlement or award is to be paid to the Claimant on an annual basis, over an extended period of time, together with an initial lump sum payment. This is known as a Periodical Payments Order, sometimes referred to as a PPO, and aims to best serve the long-term needs, interests and requirements of the Claimant.

The reason why more serious claims are likely to result in higher financial settlements is because the injuries sustained are likely to have life-changing consequences for those involved. The Claimant will generally require help and support to recover and rebuild their life, which in some cases involves the need for rehabilitation assistance, enduring care and long-term financial support.

Overview of Periodical Payments

Periodical payments aim to help the Claimant manage a large settlement amount over many years and offer comfort to someone in knowing that a continuous annual income will be received every year for the remainder of their life. A traditional lump sum award may include future losses but these will be based on a guesstimate of future life expectancy, which could result in either under or over payment to the Claimant, depending upon how long he or she actually survives, and is therefore very uncertain and potentially unfair.

Another benefit of periodical payments is that they are index-linked, which means that the payments increase with inflation according to indices published by the Office for National Statistics, which track the increase in cost of the item or service the periodical payment is intended to cover. The Courts can also decide that periodical payments should change at different stages of a Claimant’s life, as and when their needs are predicted to change.

Finally, another advantage with periodical payments is that they are exempt from income tax.

How Nelsons Can Help

At Nelsons, we have a team of lawyers with particular expertise in serious injury claims. We have helped many victims with brain injuries, spinal injuries, amputations and other forms of serious personal injury sustained as a result of accidents or medical negligence claim compensation.

Our dedicated solicitors also know how serious injury can affect families’ lives as well as that of the Claimant, and have extensive experience of managing complex cases, being recognised as approved solicitors by Headway and the Spinal Injuries Association (SIA).

Periodical PaymentsOnce a claim is settled we have Independent Financial Advisers, who can advise on appropriate investment of damages to ensure long term needs can be met and also offer a professional Deputy service to those clients who are unfortunate enough to have sustained such severe brain injury as not to be able to manage their affairs, and therefore fall under the jurisdiction of the Court of Protection.

Bruce Williams is a Partner in Nelsons’ Medical Negligence and Personal Injury teams.

If you have any questions in relation to the topics discussed above, please contact a member of our expert Personal Injury or Medical Negligence team on 0800 024 1976 or contact us via our online form.