To PPO, or not to PPO, that is the question: we report on a recent attempt by a claimant in a living mesothelioma claim to obtain a periodical payments order. Whilst defending a living mesothelioma claim brought by a Claimant represented by a large trade union firm, receipt of the updated schedule of special damage provoked this article.

Liability was admitted and the initial schedule was pleaded on a lump sum basis of over £450,000, however the revised schedule drafted by the Claimant’s QC sought a lump sum of £300,000 and a periodical payments order (PPO) for £20,000 per month for the remainder of the Claimant’s life.

Mesothelioma has a fatal prognosis and at best the Claimant had a further 12 months life expectancy. At the time his care needs were minimal but, as his condition deteriorated, they would become draconian. Payment on a PPO basis might have seen a reduced compensation award and avoided the risk of overpayment. However, the decision had to be weighed up against (a) the risk of substantial compensation if the Claimant exceeded his life expectancy and (b) the administration costs to the insurer of making monthly payments for an unspecified period.

To our knowledge a PPO has never previously been sought in a mesothelioma claim, due to the life expectancy being short and their being normally reserved for longer term catastrophic injury cases. In discussions with Claimant’s counsel his argument was that the fact it had not been done before did not mean Master Whitaker could not do so in this case.

Legal background

The legislation governing the award of a PPO was originally set out in s.2 Damages Act 1996, now replaced by s.100 Courts Act 2003, which provides that “A court awarding damages for future pecuniary loss in respect of personal injury: (a) may order that the damages are wholly or partly to take the form of periodical payments, and (b) shall consider whether to make that order”.

The procedural rules governing the award of damages by way of periodical payments are set out in CPR 41.4 to 41.10. CPR 41.7 provides that when considering whether to make an order “the court shall have regard to all the circumstances of the case and in particular the form of award which best meets the claimant’s needs, having regard to the factors set out in Practice Direction 41B.” These factors include the scale of the payments and the reasons for each party’s preference.

Outcome

In this case it was difficult to predict the Claimant’s future care requirements. He had no family living in the UK and would therefore be dependant on private carers, hence his preference for a PPO. Ultimately the case was settled on a lump sum basis of £190,000. The Claimant’s counsel indicated that he would pursue this issue in future cases where appropriate.