Background Damages
224.These sections aim to promote the widespread use of periodical payments as the means of paying compensation for future financial loss in personal injury cases. In principle, periodical payments made as the needs arise provide a more appropriate means of compensating claimants than lump sums.  The sections amend provisions in the Damages Act 1996 relating to periodical payments and structured settlements (which are periodical payments funded by an annuity). At present, the court can only order that an award of damages for personal injury be made by way of periodical payments where both parties consent, and otherwise will order payment by way of a lump sum.
225.The Act enables courts in England, Wales and Northern Ireland to order periodical payments for future loss and care costs without the consent of the parties. It also gives the Lord Chancellor a power to enable awards or agreements for periodical payments to be varied under specified circumstances, and prevents the assignment of the right to receive payments unless the court is satisfied that there are special circumstances which make this necessary.
226.Provision is made to extend the statutory protection given to structured settlements under the 1996 Act, and ensure that the continuity of periodical payments is fully protected where the payments are self-funded by an insurer, a public sector body protected by Ministerial guarantee, or a specified Government or health service body, or where payments are funded by an annuity. These provisions will apply to the whole of the United Kingdom.
227.These sections implement proposals set out in Damages for future loss: Giving the courts the power to order periodical payments in personal injury cases, a Consultation Paper published by the Lord Chancellor's Department on 13 March 2002. The post-consultation report was published on 7 November 2002. These documents have been placed in the Libraries of both Houses.