MoD compensation appeal could cost £150m
Updated on 04 September 2009
The government has been warned it faces an extra £150m bill to improve the "paltry" compensation settlements it has made with injured soldiers, Channel 4 News online can reveal.
Internal auditors have told the Ministry of Defence (MoD) it will have to pay out the huge sum if it loses a controversial Court of Appeal case to be decided next month.
Critics say the £150m estimate – which does not even take into account the cost of new compensation cases – explains why the MoD is currently fighting such an unpopular battle in the courts.
The Court of Appeal case relates to the MoD's bid to overturn a tribunal ruling that increased payments to Corporal Anthony Duncan, who was shot in 2005 while on patrol in Iraq, and Royal Marine Matthew McWilliams, who fractured his thigh in a military exercise the same year.
Duncan was awarded £9,250 under the MoD’s Armed Forces Compensation Scheme (AFCS), but that was increased to £46,000 by the tribunal. McWilliams's £8,250 award was increased to £28,750. If the ruling stands, they will also both benefit from a guaranteed annual income when they leave the services.
The AFCS has faced much criticism in recent months for supposedly provided inadequate damages for soldiers’ injuries. In July, defence secretary Bob Ainsworth ordered an emergency review of the scheme.
Hilary Meredith, a solicitor who specialises in military compensation claims, told Channel 4 News online: "I think this [£150m] estimate definitely shows why the MoD is fighting such an unpopular case in the Court of Appeal.
"We are being approached by more and more soldiers now in terms of compensation claims. Both those with new claims and those who want to now appeal against previous settlements.
"As far as I understand the British legion has been inundated now too.
"The biggest problem for the MoD is that it called the AFCS a compensation scheme – when it’s not really. The payments are paltry.
"When you use the term compensation people expect to see a parity with payments that are made in the courts, and that’s not the case.
"Soldiers are coming back from Afghanistan with multiple injuries and the ACFS is simply not adequate."
The £150m bill – the first time a total has been put on the liability the MoD faces for its controversial settlements for injured soldiers – is revealed just hours after defence aide Eric Joyce quit government accusing it of "failing to empathise with the military."
Joyce’s resignation has undermined a speech today by Gordon Brown in which he will outline his ongoing plans for Afghanistan.
The £150m estimate was detailed in the last sentence, of the last paragraph of the Armed Forces Pension Scheme resource accounts for 2008/09, which were quietly published earlier this summer.
On the subject of the Court of Appeal judgement it says: "As well as impacting on future cases there may be a requirement to conduct a retrospective exercise to adjust some awards already made.
"Current best estimate for this liability as at 31st March 2009 is £150m."
An MoD spokesman said: "The court of appeal case was about getting clarity on how the armed forces compensation scheme should work.
"Of course this clarity and indeed the review of the entirety of the armed forces compensation scheme that we have announced will lead to increased costs.
"We are happy to pay those costs as long as awards continue to reflect the simple principle that the most seriously injured receive the most money."
Interview: former minister Tony McNulty
Former security and counter terrorism minister, Tony McNulty, told Krishnan Guru-Murthy that there should be public debate on the British strategy in Afghanistan, but that "we must get the job done".
"The whole issue of terrorism, very happily from our own perspective, has largely gone away from public perception because the security services and the police have been so successful.
"But let's be very, very clear, over three quarters of the assorted plots foiled over the last couple of years in this country have emanated from this nexus of the Afghanistan and Pakistan border.
"Two hundred and twelve deaths in Afghanistan is 212 too many, but we really must learn from history, even very recent history.
"When the soviet regime fell, when their puppet regime fell, the West upped sticks and moved away and into that very vacuum when the Taliban and subsequently al-Qaida because we left before the job was finished.
"We can't repeat that very recent history, we must work as closely as we can with our allies.
"There is nothing simple about it, but at the very time that the Pakistan government is finally getting to grips with the Talibanisation of its own frontier provinces, if we up sticks and walk away from the Afghanistan half of that equation, then I think it will lead to more nightmarish consequences for us.
"I do accept the point that given we are putting our young people in mortal danger on a daily basis, quite rightly there should be a full and frank public debate on strategy.
"But lets have that in a cool and calculated fashion in the serious manner which it deserves given what we are doing to our young people in Afghanistan."
