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Lord Redesdale: My Lords, rather than entering into what seems to be a slightly political attack from the Front Bench opposite, I want to ask about something that has been niggling me. Regarding compensation culture, the saving of £200 million would be for false claims which would fail on that basis. Is that where the £200 million will be saved over the, I believe, 10 years? Otherwise, we are talking about £200 million, as the noble Lord, Lord Morris of Manchester, said, coming from claims failing that would be accepted at the moment. So, is the Minister saying that we are now actually getting rid of unjustified compensation culture, or is it just a change in the rules which makes the standard higher?

Lord Bach: My Lords, I promise the noble Lord, as I told my noble friend, that I will come to the £200 million in due course and answer his questions.
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I am not making a political point here. We are all concerned about compensation culture. Perhaps I am gently chiding the noble Lord, Lord Astor of Hever, but I hope in a friendly spirit. This is not a political debate in that sense. But there is a point about compensation culture. Everyone, using common sense and being realistic, knows that the Armed Forces are not immune from compensation culture and that under the present arrangements it frankly is too easy for people to claim that they have received an injury or an illness during service, whereas everyone knows that they almost certainly did not. But, because of the burden, and particularly the standard of proof, that person succeeds in their claim. That is what we are trying to stop.

Lord Marsh: My Lords, I follow very clearly the point the Minister is making. The problem is that compensation culture, or lead-swinging as one noble Lord suggested, is rampant and vast in its implications, but it is primarily, I would have thought, at its best—and this is a fact we have to face—in the public sector; whether it is the police, local government or education. The examples where it is exploited are well known. Is there any suggestion that a similar burden of proof should be placed throughout the structure, as is being suggested in this case?

Lord Bach: My Lords, I am grateful to the noble Lord. As I understand it, there is no similar burden of proof to the one found in the present war pension scheme, which we say is out of date and more prone to lead to a possible compensation culture. The noble Lord is right: it is not found elsewhere. I do not want to exaggerate the danger of this in the Armed Forces because I know, as everyone in this House knows, the immense standard of quality from top to bottom that we have in our Armed Forces.

But we must not hide our faces from reality, which is that if you do have a burden and standard of proof like this, it is a temptation, frankly, to claim under it rather than not to. There can be no doubt that it has been claimed under when it should not have been. That is the point that I ask noble Lords to consider and that I am trying to make.

I have provided to a number of noble Lords—those who came to the meeting that was advertised for lunchtime today—some kind of response to the points raised on this issue in the letter from the Royal British Legion. I know that I have gone on for quite a considerable time, but I think that noble Lords who propose and support the amendment realise that it is an important amendment. Let me say a little about the history, how it developed and why we say that the present burden of proof is no longer appropriate today.

The current burden of proof was introduced in December 1943 during the Second World War. During the early years of the war, the rules of entitlement were stringent, as they had been in the First World War, and the scheme only accepted injuries that were directly attributable to or aggravated to a material extent by service—and please note these words—"during the
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war". These rules required definite evidence in contemporary records or, where those were lacking, other definite evidence which would leave no doubt in the mind of the authorities that the disablement was due to war service. Noble Lords will immediately recognise how stringent those rules were, given the circumstances prevailing at the time.

So, faced with a large number of claims from combat and problems with keeping and accessing records, it became difficult to apply the existing rules. Changes were therefore made to remove the onus from the claimant and to relax the previously strict evidential requirements, such that the administrative burden of establishing a claim could be reduced and thus speed up decisions. But, I remind the House, eligibility remained confined to disablement due to war service. Even when the case law expanded the definition of injury to include wounds or disease, very few claims for physical or mental illness succeeded, as the accepted medical understanding was that almost all diseases were a matter of constitution and that their very nature meant that they could not be caused by service.

In 1947, the scheme was further modified to allow claims seven years after the end of service, to cover those who had left the forces early in the war and might otherwise be unable to claim. It was not until 1949 that the war pensions scheme was changed to cover all service, not just war service. When the scheme covered only war service, which involved mostly physical injuries, the requirement to prove that service was not the cause was just not a significant issue. However, once non-war service was included, it was possible for awards to be made for conditions that were almost certainly due to non-service causes, but for which the department just could not demonstrate beyond reasonable doubt that service factors played no part.

The whole House will have sympathy for anyone suffering an illness, but I cannot agree—I invite the House to say that it cannot either—that to pay compensation for conditions that are very likely to be unconnected with service is, frankly, an appropriate use of taxpayers' money. Nor is it fair to those who really have a condition, illness or injury due to service. Such cases might, for example, include cases where ageing, constitution or lifestyle—for example, diet—are by far the most likely cause.

I hope that I do not have to tell the House that I of course recognise and support the argument that we should recognise the unique, special contribution made by the Armed Forces by having a generous compensation scheme for injury or illnesses caused by service. Independent review of our proposals demonstrates that they will deliver this. Frankly, it is important that we concentrate what resources we have on cases where service is the likely cause and, in particular, focus our provision on the seriously disabled. That is what we propose. At the same time, I want to make clear that the new scheme is not a cost-cutting exercise. Our best estimate is that its cost will be broadly the same as that of current arrangements.
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Frankly, we cannot afford to improve benefits for the more severely disabled and maintain the current, generous burden of proof. I invite the House to say that we have made the right decision—as I said, it is the head, rather than the heart talking—to make better provision for the more severely disabled, but not to pay benefits in those cases where the illness, injury or death is unlikely to have been caused by service.

Before I sit down, let me turn briefly to the Royal British Legion's claim that 50 to 60 per cent of current war pensions claimants might fail if seeking compensation under the new scheme rules. Let me at once say that I am a huge admirer of the Royal British Legion. I ought to be: I declare an interest as an associate member of the Lutterworth and District British Legion and proud to be so. But I fear that that cannot stop me from saying what I am obliged to say: my colleague, the Minister for Veterans wrote to the Royal British Legion, setting out our view of its analysis.

First, we are clear that the sample used was not representative of the total spectrum of claims. To the extent that there is an issue, it appears to relate to the scheme time-limits for claims, rather than the standard and burden of proof. We think that the Royal British Legion concluded that current claims would have failed where they had been submitted more than five years after leaving service, because they would fail to meet the time limit for the new scheme. We think that that is a false, mistaken analysis. People will be made fully aware of the time limit and, in most cases, will be able to adjust the timing of their claims to meet it. I remind the House that a robust communication strategy is an integral part of the whole new scheme.

In a small number of cases, claimants will not be able to do that because their condition is late-onset or because injury or illness prevents them submitting a claim, but we have recognised that latter problem and the new scheme makes specific provision for late claims in such cases, so we are confident that time limits should not be the problem that the RBL fears that they will be.

In Grand Committee, it was suggested that if we did not accept the RBL's findings, we should at least look in detail at its analysis. We have taken that point on board and, in July, we offered to examine some of the cases used by the RBL to establish the basis on which, in its view, claimants might fail under the new scheme. I must tell the House that, unfortunately, the RBL has now declined our offer. Given that we have not been given visibility of its work, we must retain our concerns that its study did not provide a sound analysis of how past claims would fare under the new scheme.

The important thing is that the new scheme has been designed to admit all reasonable claims, including those which, for good reasons, fall outside the time limit. We believe that it will deliver a fair result, as was confirmed to the independent review carried out by the company Watson Wyatt.
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The suggestion that it would cost disabled ex-servicemen and women £200 million, is, frankly, not true. The cost of the scheme will remain the same; there is no saving. We have put the money into improving benefits for the most severely disabled and to eligibility, as against the current rules for attributable benefits under the Armed Forces pension scheme. The £200 million reflects broad assessments of taking the standard and burden of proof into the new scheme; it does not cover how the new scheme would affect current claimants, but, as I said, we are confident that the 60 per cent figure cited is an overstatement.

We can see no reason why the use of the normal civil test of proof in the new scheme should disadvantage any service person whose injury or illness is caused by service. We will be monitoring the new scheme extremely closely. The Minister for Veterans, in particular, will be watching very closely to see how the new scheme works. We will look at any cases raised by the ex-service organisations, including, of course, the Royal British Legion, where it is thought that reasonable claims have failed.

It is important, in discussing the burden of proof, that we do not lose sight of the overall package that the Bill is designed to deliver. The new schemes will introduce provisions that represent considerable improvements on what is currently available. Some of those improvements were as a direct result of dialogue with the ex-service community, where it has shared its concerns and aspirations. Wherever possible, we have addressed its concerns and the final package has been welcomed by the majority of the community.

The two new schemes can only work and proceed together. They support and complement each other in a balanced package designed to meet the needs of Armed Forces personnel and their families today. If there were to be a significant change to any area of the proposals, we would have no choice but to look again at the overall package; and there is no guarantee that we could deliver the schemes in such circumstances.

I end by reminding noble Lords of two things. First, the chiefs of staff, on behalf of the Armed Forces, are in favour of our proposals. I submit that that should have some influence on this House. I very much hope that the House will reject the amendment, for the reasons that I have outlined. I apologise to the House for taking so long to respond to the amendment.

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