Select Committee on Defence Appendices to the Minutes of Evidence


Memorandum submitted by Hodge Jones & Allen, Solicitors (September 2001)



  1.  Hodge Jones & Allen, Solicitors in Camden Town, London NW1, have the generic legal aid contract awarded by the Legal Aid Board (now the Legal Services Commission) to carry out investigations into Gulf War illness. We personally act for over 800 Gulf War veterans in their claims for compensation for illnesses and losses arising out of their service in the Gulf War. We coordinate the claims on behalf of all other Gulf veterans who have their own local solicitors. Many of our clients also have claims for post-combat stress illness which are being brought in the PTSD Group litigation against the Ministry of Defence.

  2.  Service personnel and civilians, who have been seconded or contracted by the MoD, who are injured in the course of their duties must be adequately compensated. This compensation should extend to their dependants where those personnel are fatally injured. Without adequate compensation and financial support for the injured personnel, morale within the services will decline and recruitment will suffer. The nature of the work carried out by its employees means that the MoD has a high moral duty in addition to their obvious legal duty to protect its employees. This should be reflected in any compensation package offered by the MOD to its employees.


  3.  We make our comments on the joint compensation review on behalf of our Gulf War veteran clients but note that the new scheme "would cover illnesses injuries or death attributable to service where the cause occurred on or after the date of implementation of the new scheme" (page 5). Thus, the scheme as drafted, is not intended to apply to Gulf veterans who allege they have suffered injury as a result of service in the Gulf War.

  4.  We consider this is a regrettable feature of the scheme as it would appear that the new compensation proposals would have much to offer veterans claiming for illnesses such as "Gulf War Syndrome". The paper states in its foreword "key to our determination to maintain morale and improve recruitment and retention in the Armed Forces is fundamental reviews of pay, pensions and compensation arrangements for our servicemen and women and their dependants" (3). Such comments could not be more applicable to the situation which has arisen since the Gulf War.

  5.  Nearly 2,000 veterans are suffering from ill health as a result of service in the Gulf and have not been adequately compensated other than by existing war pension arrangements. The dispute over Gulf War illness and compensation has, we believe, affected morale in the Armed Forces and recruitment. It is vital that a scheme be put into place which addresses their needs. Implementing a scheme, which would compensate injured veterans of future campaigns, whilst ignoring Gulf veterans, will cause widespread criticism for the government, making worse the already difficult politically charged situation with Gulf veterans and the perception with the public.

  6.  Including the Gulf veterans in the scheme could have a dramatic effect on morale and recruitment and we therefore urge the MoD to design the scheme in a way that would give veterans of earlier conflicts the option to participate in the scheme.


  7.  We suggest that eligibility for the scheme should be for servicemen and women who claim for illnesses, injuries or death attributable to service where the cause occurred on or after 1 May 1987, which is the date when s12 of the Crown Proceedings Act 1947 was repealed by s1 of the Crown Proceedings Armed Forces Act 1987. This is a watershed date for compensation arrangements when claims for negligence against the government by members of the armed forces were permitted for the first time. Thus veterans of any conflict which took place after May 1987 and servicemen who have developed illnesses attributable to service such as cancer or industrial diseases would be put in the same position and have the option to sue in the civil courts or accept a no fault lump sum and GIS if applicable.


  8.  We agree that the eligible events should be those in paragraph 8.4:

    (a)  terrorism or warlike activities;

    (b)  negligence by the MoD as an employer; and

    (c)  injuries, illness or death attributable to service.

  Existing arrangements should continue for injuries, which are compensated under the CICA or CIC(O) scheme—violence against servicemen abroad which is not warlike activity.


  9.  We support the concept of a simplified no-fault scheme for compensation for those who have suffered injuries as a result of alleged negligence on the part of the MoD, provided that access to the Courts is in no way fettered as a result of the new scheme and that claimants have access to legal advice throughout the process, which is paid for in addition to damages. Claimants must have the benefit of advice to decide whether it is better for them to take their case to court or through the no-fault scheme.

  10.  Once in the scheme, legal advice is vital if the claimant is to obtain the appropriate evidence and supply the correct information needed to obtain the correct level of award. Evidence will include service records, medical records, witness statements, evidence of career path and prospects. We believe that this will be beyond most claimants (as it is in many cases of applications for war pensions now and for any other form of personal injury assessment). The legal tests for entry into the scheme will have to be satisfied. If the cost of legal advice is deducted from the award, many claims will be affected substantially and the compensation intended for the claimant will not be received by the claimant.

  11.  We note that the scheme is intended to be cost neutral (paragraph 1.5). Therefore the cost of legal advice currently paid for should continue to be available. To put a fetter on legal advice (by making all claimants pay for their own) will probably breach Article 6 of the ECHR.


  We are concerned at the idea that the scheme should be run by the MoD. There was much to be said for the War Pensions Agency, an organisation at arms length and separate from the MoD and part of the DSS, running the War Pensions scheme. We regret the recent decision (June 2001) for the WPA to be transferred to the MoD.

  The proposal for the MoD to run the new scheme would not have the confidence of veterans. There is a conflict of interest which may be impossible to resolve and may contravene the ECHR. Those employed by the MoD to advise and run the scheme, such as doctors, lawyers and administrators, might see the interests of their employers best served by rejecting awards or keeping awards low. We suggest that the scheme should be run by an independent agency within the DSS, with ECHR compliant rules, and with an independent, fully ECHR compliant appeals tribunal.


  The idea of a tariff scheme is attractive for a simplified no-fault scheme provided that it does justice to the applicants. We believe that the proposed tariffs are too few and too simplistic. Much work has already been done by the Criminal Injuries Compensation Authority to establish a range of bands for compensation for those claiming criminal injuries. It does not seem necessary to re-invent a scheme when this work has been done effectively and we propose that this scheme should adopt the CICA bandings and in particular, the rule by which the CICA to take 100 per cent of the band for the most serious injury, followed by 30 per cent of the second most serious condition and 15 per cent of the third most serious condition. It should be noted that the top award of 250,000 in the CICA scheme is the same as that proposed in the new military scheme.


  We support the idea of a guaranteed income stream, which is linked to the tariffs and intended to compensate for loss of earnings and care. However, it is impossible to comment on the proposal as there is no detail in the paper. Paragraph 6.7 states "we concluded that a formula could be devised based on the tariff level of disablement and differing percentages of the salary in payment at the time of retirement multiplied by the number of years left until normal retirement age for the Armed Forces Pension Scheme of 55 . . . our economists and statisticians have designed a formula which they believe will provide a reasonable approximation for lifetime earnings".

  15.  No such formula has been revealed in the paper and we therefore cannot comment on the practicality or suitability of the guaranteed income stream. It is disappointing that such vital detail is missing from a paper, which has apparently been over four years in preparation.

  16.  We support the idea that the GIS would be paid for life and uprated annually in line with inflation (6.9 on page 19).


  We agree that the present arrangements for pensions payable under the War Pension Scheme and the Armed Forces Pension Scheme lead to unnecessary complications and there is merit in having a single pension and compensation scheme for attributable injury, illness and death.

  However, we are concerned the present proposals will lead to a real cut in benefits to many members of the Armed Services. Without further detail, we are unable to comment further at this stage on the fairness of the proposed scheme.


  The three-year period for claims to be lodged from the end of service (8.16) is too restrictive. There may be complex and significant conditions, which emerge some years after a conflict but which are clearly attributable to service. To define exceptions such as cancer or psychiatric conditions in a list is too restrictive. There should be a three year cut off period to make a claim from the date when the claimant first became aware that the injury was attributable to service, (similar to the Limitation Act). If there is to be an overall cut off period, it should be generous—say 10 years—and with an exception list and with discretion to come into the scheme later if there are good reasons for the late application.

  We consider the proposed time limit to make a claim within one year from medical diagnosis of disablement is too short. The normal time limit for claims in negligence is three years from the date of injury or from the date when the applicant became aware of the condition, which could give rise to a claim. A one-year period is unduly restrictive. There should in any event be discretion to allow claims submitted later in a similar provision to that of section 33 of the Limitation Act.


(a)   Should the existing diverse arrangements for compensating service personnel be replaced by a single new scheme?

  We support the streamlining and simplification of the system for compensating service personnel. However, streamlining should not be at the expense of fairness and justice. There is little point in having a scheme that is so rigid in its structure that it allows unfair or perverse awards/decisions to be made. We consider that this would lower morale rather than maintain or improve it. More detail is required before we can comment on the overall fairness of the proposed new scheme.

(b)   Should this be owned by the MoD?

  We consider that an independent agency should run the scheme, independent of the MoD. An MoD run scheme may conflict with the ECHR. Conflicts of interest may be impossible to resolve. Even now, many servicemen and women are reluctant to make a claim for an attributable injury whilst still in service for fear of the effect on their career. The situation would get worse if all financial claims (including war pension type payments and compensation) are dealt with within the MoD. Independence is of benefit to both sides. It will protect the MoD against accusations of bias or prejudice and it will reassure servicemen and veterans that their claims are being dealt with fairly.

  Experts assessing the injured party should also be independent so there is no suggestion of bias or prejudice in their assessments.

(c)   Are the principles guiding the review the right ones?

  We do support the guiding principles outlined at the beginning of the review but simplicity or streamlining should not take precedence over fairness and equity. It should be possible to have a balanced scheme, which is not compromised by trying to be too administratively simple.

(d)   Is it right to base the new scheme on the principle of compensating financial loss rather than on pensions?

  It all depends on the detail. We are concerned that a one off lump sum instead of a pension payment will be insufficient compensation to a claimant whose earning capacity is affected.

  We cannot judge whether many personnel will be worse off under the new scheme because insufficient detail has been provided.

  However, we support the introduction of lump sums to pay for expensive items for the severely disabled which could not be purchased under existing pension arrangements (paragraph 5.5).

(e)   Do you support the approach of making a greater proportion of compensation available through lump sums?

  The guiding principle for compensation must be to put the person back into the position they would have been in but for the injury. That means a lump sum for pain and suffering and periodical payments (or a commuted lump sum instead) for future losses. We are concerned that a commuted lump sum will be wasted by many claimants who will lack the discipline or skill to invest the sum wisely. A one-off lump sum instead of a pension payment (eg under the existing war pension arrangements for someone with 40 per cent assessed disability) will be insufficient compensation to a claimant whose earning capacity is affected.

  Loss of earnings compensation should be approached in the same way that loss of earnings are approached in civil cases with a basic calculation to which multipliers and multiplicands are applied. There should also be provision for care claims and aids and adaptations where necessary.

  We agree that the best way to compensate for pain and suffering is with a lump sum (paragraph 5.6.3). The effect of the pain and suffering on earnings however, should be compensated with a disability pension.

(f)   Is the proposed tariff approach sensible?

  A tariff scheme has the advantage of simplicity for a no-fault scheme. However, the proposed tariffs are too limited and should be extended into further categories. For example, there should be a higher top-level award for psychiatric injury as per the Judicial Studies Board Guide of 40,000-50,000. We suggest that the CICA tariffs are adopted with one or two simplifications (where the categories are plainly designed with criminal injuries in mind) and that the CICA system of 100 per cent for the first injury, 30 per cent for the second injury and 15 per cent for the third is used.

(g)   Is the approach to generating a GIS sensible?

  We support the idea of a guaranteed income stream for life, uprated for inflation each year to compensate for future losses such as income and care. The calculation must have reference to the scale of the likely losses including the effect on non-service earnings. The paper does not give the formula referred to so we cannot comment further.

  A rough and ready formula leading to a modest GIS will lead many claimants to take their cases to the courts for a higher award, thus defeating the cost savings which are hoped for.

(h)   Does the scheme strike the right balance in focusing compensation on the most severely disabled?

  We have difficulty with this concept. We believe that compensation should be fair and designed to put the person back into their pre-accident state, so far as is possible. We do not support taking funds away from those with moderate claims. All should receive fair compensation for the scheme to gain acceptance and respect. To target the scheme on the most seriously injured will produce far more losers and winners. This would be very unpopular and unfair.

(i)   Is the approach outlined for determining eligibility to claim and entitlement sensible and reasonable?

  We believe that the scheme should be backdated to events after 1 May 1987 as outlined above. This would give a level playing field to all who have suffered injury or illness since then, including those with emerging industrial diseases. They would have the option of a civil suit in the courts (claims for which began in May 1987) or a no-fault payment. The proposed scheme as it stands would exclude large numbers of existing veterans and servicemen.

  We believe that the time limits are too restrictive, particularly the proposed overall cut-off period of three years. If there is to be a cut off, it should be 10 years and with discretion to allow later claims with good reasons. In addition there should be a list of conditions which are exempt from the cut off. Claimants should also have three years from the incident or diagnosis/knowledge that the claim is attributable to service to bring the claim—not one year as proposed. There should also be discretion to allow late claims as per section 33 of the Limitation Act.

  We do not disagree that the new burden of proof should be on the balance of probabilities for entry to a new unified scheme.

(j)   Are the proposals for dependants and reservists correctly pitched?

  We agree that reservists should be treated no differently to full time members of the Armed Services (paragraph 9.4).

  The scheme should compensate reservists for loss of earnings based on their civilian earnings, where this salary is significantly higher than the reservist pay.

  There should be equality between widowers and widows.


  If the scheme is backdated to cover incidents after 1 May 1987, there will need to be transitional arrangements. Veterans and servicemen and women should have the option of coming into the new scheme and to reject an award and keep their existing award (made for example under War Pensions legislation) if the earlier award turns out to be more valuable or advantageous to them.


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