The HSE has failed in a High Court application to adjourn a significant action by a catastrophically injured boy for orders seeking to treble the value of his special damages claim to €61m.
Oran Molloy’s case, in which liability has been admitted, has “fairly far-reaching” implications for similar cases, Patrick Hanratty SC, for the HSE, told High Court president Mary Irvine.
The 14-year-old boy is seeking a lump sum award of €61m for past and future special damages based on a real rate of return on assessment of future loss of -3pc, not the current rate – set by the Court of Appeal in the 2016 Russell case – of 1.5pc and 1pc in the case of future care.
That would have a major effect on the valuing of the case because, under Russell, the amount would be €20m, while under the new proposal, it would be more than €60m.
Oran, the court heard, would alternatively be happy to accept a periodic payment order (PPO) provided the sum was linked to wage inflation but that option is currently unavailable because, despite a 2010 recommendation from the PPO working group, the index necessary to link PPOs to wage inflation is still awaited.
The case arises from injuries suffered by Oran during his birth at Portiuncula Hospital, Ballinasloe, Co Galway on December 31, 2006. His mother Deirdre Molloy was admitted to the hospital a day earlier at 32 weeks, four days gestation, with substantial antepartum haemorrhage.
When born the following day by emergency Caesarean section, Oran was in poor condition and was later diagnosed with hypoxic ischemic encephalopathy with secondary diplegic cerebral palsy.
Suing through his mother, Oran, of Riverstown, Birr, Co Offaly, is claiming general and special damages, both past and future, for the remainder of his life over alleged negligence in the circumstances of the management of his delivery and birth.
The HSE earlier this month conceded liability but its lawyers this week sought a three to five-year adjournment of the case, listed for hearing next week, for reasons including its concern the current uncertainty over investments returns might result in the boy being over-compensated.
It argued the consequence of current “historically and abnormally low” interest rates is that any lump sum payment based on those rates will discount at “too low a rate”, potentially resulting in “significant overcompensation” to the plaintiff.
The High Court should not, at this time, revisit the real rates of return approved in Russell because, in three to five years when the case might proceed to a final hearing, more “usual” interest rates are likely to prevail and the PPO option might also be available, it was argued.
Mr Hanratty stressed Oran would receive interim settlement payments, either in sums proposed by it of between €4.6m and €4.9m, or as set by the court.
The boy, represented by Jonathan Kilfeather SC, instructed by Michael Boylan Litigation, opposed any adjournment.
It was argued the HSE had been advised from the outset the real rate of return would be a significant issue in the case. It was also argued it was neither just nor fair this claim should be postponed in the expectation new legislation might be introduced to correct deficiencies relating to PPOs.
In her judgment today, High Court president Ms Justice Mary Irvine refused the adjournment.
The interest rate arguments are neither a valid nor appropriate basis for an adjournment and this application was an attempt to “pre-empt” the trial of an issue the plaintiff wants decided, she said.
In this case, the court will hear evidence concerning historic, current, long-term average and anticipated interest rates when considering the real rate of return, she stressed. It cannot act on the “snapshot” of current depressed interest rates when deciding the real rate of return to be applied to the plaintiff’s claim for special damage.
She was also not satisfied it was in Oran’s best interests to defer his claim.