The Damages (Variation of Periodical Payments) Order 2005

Explanatory Note

(This note is not part of the Order)

This Order enables courts to vary orders and agreements in personal injury cases under which all or part of the damages take the form of periodical payments. Articles 2 and 9 restrict the circumstances in which variation is permissible to those where there is a chance that the claimant will develop some serious disease or suffer some serious deterioration, or enjoy some significant improvement, in his physical or mental condition, and the court has ordered, or the parties have agreed, that the order or agreement is to be capable of variation.

The decision that an order may be varied in the future may be made on the application of a party, or with the consent of the parties or of the court’s own initiative (Article 2). In the case of an order, the court’s permission for an application to vary the order is required, unless the court decides otherwise (Article 5); in the case of an agreement, the court’s permission is always required (Article 9).

Article 10 requires the person applying for permission to apply to vary an order or agreement to show that the specified disease, deterioration or improvement has occurred and that it has caused or is likely to cause an increase or decrease in the claimant’s financial loss. The application for permission is to be dealt with on the papers. If permission is refused the claimant may ask the court to reconsider the matter at a hearing (Article 11). No appeal from the grant of permission or the refusal of permission on a reconsideration is possible (Article 12).

On a successful application for the variation of an order or agreement, the court may order that the amount of the annual payments to the claimant is to be varied (Article 13). It may also order that a lump sum be paid in addition to the periodical payments. Article 13 further provides that, as with the original order, the court must be satisfied that the continuity of payment as varied is reasonably secure, under section 2(3) of the Damages Act 1996.