Personal Injury Discount Rate | PPOs

Our experts, Tim Horlock KC of Deans Court Chambers and Alex Payne of Clyde & Co’s actuarial subject matter group address the nuts and bolts of Periodical Payment Orders (PPOs), the background to these and when these are appropriate.

This podcast assumes a certain level of familiarity with PPOs (which are when all or part of damages for future loss are awarded in the form of a series of annual payments continuing until the death of the claimant), indexation of awards, and with statutory funding of care and related services. This podcast was recorded earlier this year.

PPOs were identified in the Ministry of Justice’s (MoJ) ‘call for evidence’ on Dual or Multiple Personal Injury Discount Rates (see questions 21 and 22), which concluded in April and is due to respond next month. It is yet to be seen whether the MoJ’s response will include concrete proposals in relation to PPOs given the reference to them in the ‘call for evidence’. As the topic evolves, we will keep you updated here: Personal Injury Discount Rate.

Glossary:

• PPO – Periodical Payment Order
• MIB/Bureau – Motor Insurers’ Bureau
• FSCS protected – the claim and/or the insurer is protected by the Financial Services Compensation Scheme
• CoP/deputyship fees – Court of Protection/deputyship fees
• CCG funding – funding (of care or other services) provided by a Clinical Commissioning Group (CCGs are part of the NHS structure)
• ‘Flat’ PPO – the annual payment under the PPO remains the same for life, other than being indexed to allow for the effects of inflation
• ‘Stepped’ PPO - this is a PPO that takes important foreseeable milestones in the claimant’s life, such as anticipated changes in care needs, into account at the outset and eg provides for a step change in the annual amount at a particular point in the future 
• ‘Variable’ PPO – the PPO includes an express provision, again at the outset, by which variation of the annual payment is permitted where it is proved or admitted that there is a chance the C will suffer some serious disease or deterioration or enjoy some significant improvement; the triggers will be set out in the PPO (meaning this is similar to a provisional damages clause in a lump sum award)

Sources and case law referred to:

• Damages Act 1996
• Damages (Variation of Periodical Payments) Order 2005 
• Sarwar v Ali & Motor Insurers’ Bureau [2007] EWHC 274 (QB)
• Martin v Salford Royal NHS Foundation Trust [2022] EWHC 532 (QB)