Proper training needed for periodical payment order plans, Faculty states

Special training for judges will be needed if the courts are given power to impose periodical payment orders (PPOs) to resolve damages claims, the Faculty of Advocates claimed today.

Responding to a Scottish Government consultation on draft legislative provisions, Faculty gave a qualified welcome to the plans, which would bring Scotland into line with the rest of the UK by giving courts power to impose PPOs in personal injury litigation without the consent of parties. Currently, payment by instalment can be, but very seldom is, agreed by parties.

PPOs are seen as an effective way of avoiding the risk that lump sum compensation, based on anticipated life expectancy, proves either to overestimate or underestimate the needs of a pursuer.

“We are of the view that judicious use of periodical payment orders by the courts will permit a fair and efficient method of dealing with substantial future losses. The need for evidence about life expectancy will be severely restricted or removed”, Faculty states.

However it proposes a financial threshold, perhaps £500,000, in relation to the value of future loss before a court would be required to consider making a periodical payment order, to avoid investigation where this is clearly unnecessary. "We think that the court should be provided with a specific power to obtain evidence (such as actuarial or financial information) as required to fulfil its new function. Case management provisions contained in the existing practice rules will also require to be enhanced."

It also warns: “The Faculty… is concerned that the court should have the necessary specialist knowledge, experience, training, resources and infrastructure to permit these provisions to be operated successfully.

“The court is being put into a position where it has the responsibility to impose a settlement upon the parties… There will be an increased burden on the individual decision makers… It will require an increase in resources and specialist training for sheriffs and Lords Ordinary.”

One area where the Faculty strongly disagrees with the provisions is in relation to a “bespoke, same-tier review process” for varying or suspending PPOs. The review would be by another sheriff or judge.

“We see no reason why the ordinary right to an appeal to a superior court should be removed", the response argues. Furthermore, it is not clear how many reviews are to be allowed. If only one review is allowed then it seems bizarre that the second decision is treated as more important than the first decision. If more than one is allowed then at what point does review come to an end?

"The review process envisaged by the draft provisions would leave litigants concerned with a PPO enjoying a less robust appeal process than litigants involved in all other types of cases. We consider that any review should be carried out using the standard appellate procedures (Sheriff Appeal Court and Inner House).”

Click here to view the full response.