This is an HTML version of an attachment to the Freedom of Information request 'Statistics on common law compensation claims against the MODs'.



 
 
 
 
 
 
 

         Ministry of Defence 
 
 
 
 
 
 
 
 
 
 
 

          
 
 
 

 
 

DC&L(F&S)CLAIMS 
Annual Report 
2000/2001 
 
 
 

 
 
 
 
 
 
 
 
 
 

July 2001
 

DC&L(F&S)CLAIMS ANNUAL REPORT 2000/2001 
CONTENTS 
 
1. 
Introduction by Chief Claims Officer 
 
2. Executive 

Summary 
 
Part One 
 
3.   Section One – DC&L(F&S)Claims Organisation and Responsibilities 
 
4.   Section Two – Risk Management 
 
5.  Section Three - Claims Handled by the Public Liability Group 
 
6.   Section Four – Claims Handled by the Service Personnel Employer’s Liability Group 
 
7.  Section Five – MOD Civilian Employees Employer’s Liability Claims 
 
8.  Section Six – Third Party Motor Liability Claims 
 
9.  Section Seven – Clinical Negligence Claims 
 
10. Section Eight – Service Personnel Employment Tribunal Claims 
 
11. Section Nine – Insurance and Indemnities 
 
12. Section Ten – Novel and Contentious Claims 
 
13. Annex A – DC&L(F&S)Organisation 
 
14. Annex B – Top 20 cases settled by DC&L(F&S)Claims 2000/2001 
 
15. Annex C – Top 10 cases settled by RSA 2000/2001 
 
16. Annex D – Top 10 cases settled by AXA 2000/2001 
 
Part Two   
 
17. Law and Practice 
 


Civil Justice Reforms 

Structured Settlements 

Third Party Accident Scheme (ToPaS) 
-     Human Rights Act 
 
 
 

 
1

DC&L(F&S)CLAIMS ANNUAL REPORT 2000/2001 
 
INTRODUCTION BY THE CHIEF CLAIMS OFFICER 
 
 “All of us here know that there is no better way of exercising the imagination  
than the study of law” 
 
This is the fourth Claims Annual Report.  The report is again in two parts.  The first covers 
claims activity during financial year 2000/01. The second deals with practice and procedure 
and is largely for new readers who may be unfamiliar with the subject. 
 
Claims continue to be of concern to Ministers and senior officials and of interest to the media.  
The cost of claims against the MOD is on an upward path and in a few short years claims 
expenditure has risen from £25million in 1992/93 to £88.5million in the last financial year.  
This in many ways reflects society at large and the uplift in the award of damages generally, 
but I believe there are things that we can do to slow down the trend. As a result of submissions 
to the Permanent Secretary, supported by DUS(CM), I have put in place the Claims Risk 
Management Group (RMG) who have been charged with the responsibility of analysing the 
data, identifying the most common risk areas, and putting forward remedial measures or 
initiatives to bring about change. This is a significant body of work which the RMG is tackling 
with great vigour and enthusiasm.  There are, however, no quick fixes and the benefits of this 
enterprise are unlikely to be seen for some years. I am, however, confident that we are 
adopting the right approach.  A report by the RMG Team Leader can be found in Part One 
Section Two. 
 
The work in Claims can be complex and requires claims managers to acquire a thorough 
knowledge of the law.  In recognition of this, a Claims and Legal Functional Competence 
Framework was introduced in the year 2000.  The Framework sets out the basic skills and 
knowledge required to become an effective member of the Claims team.  The framework is 
backed by a broad training package, incorporating specialist legal training by recognised 
bodies as well as refresher training kindly provided by our commercial claims handlers.  In 
order to broaden our experience of commercial best practice, we arranged the first secondment 
into MOD Claims of a member of a commercial colleagues’ MOD team. This proved to be a 
great success and I fully intend to take the initiative further by offering secondments out to 
industry as well as to claims organisations in other government departments.   
 
We continue to pursue settlement through Counsel to Counsel conferences.  In 2000/01 9 such 
conferences took place and compensation of  £7.5M  was agreed against claims totalling 
£12.03M. The savings in court time and legal costs were significant. 
 
Claims should not, however, be considered simply in the light of their cost.  There is very 
often real human tragedy behind the figures which are perhaps best exemplified by the facts 
 
2

surrounding the highest claim in MOD Claims history paid in financial year 2000/01. The case 
concerns a soldier deployed on duties involving the transport of army trucks in railway wagons 
in Germany.  The claimant was loading a vehicle on to a train and was told to retrieve a piece 
of equipment which had been left on top of the vehicle.  As he did so, he stood up and hit the 
live overhead power cable. The resultant electric shock threw the claimant from the train.  He 
sustained 60% burns to the body, damage to the skull, electrocution cataracts and a leg had to 
be amputated.  He now suffers tetraplegia and will need 24 hour nursing care for the rest of his 
life.  The Department admitted liability in the case and substantial damages have been paid.   
 
This report will receive a wide circulation.  I should be pleased to respond to any questions on 
the report and to receive comments or observations on how future reports might be improved 
or presented. 
 
Additional copies are available from the DC&L(F&S) Focal Point, 6th Floor, St Giles Court, 1-
13 St Giles High Street, LONDON WC2H  8LD (Tel no 020 7807 0049/0056 or Fax no 020 
7807 0051).  Copies can also be e-mailed via CHOTS or supplied on disc. 
 
 
 
 
3

 
 
DC&L(F&S) CLAIMS ANNUAL REPORT 2000/2001 
EXECUTIVE SUMMARY 
 
1. 
Total DC&L(F&S) expenditure in the year 2000/2001 including legal fees of £21.05 
million was £97.01 million of which £88.5 million was claims expenditure including 
legal costs. 
 
2. 
948 Service personnel employer’s liability claims were settled at a total cost of £36.60 
million.  
 
3. 
1028 civilian employer’s liability claims were settled at a total cost of £14.72 million. 
 
4. 
310 public liability claims were settled at a total cost of £2.524 million. 
 
5. 
4566 third party motor claims were settled at a total cost of £8.78 million. 
 
6. 
79 clinical negligence claims were settled at a total cost of £10.6 million. 
 
7. 
17 Employment Tribunal cases were settled at a total cost of £176,000 
 
8. 
1866 intentions to claim are registered for those alleged to be suffering from Gulf War 
Illnesses. 
 
9. 
290 claims have been received from Service personnel alleging Post-Traumatic Stress 
Disorder. 
 
10. 
Highest ever claim settled at £3.675 million 
 
11. 
At 1 April 2001, the total number of claims lodged with DC&L(F&S) Claims or the 
Department’s commercial claims handlers was 8956 
 
12. 
The forecast claims expenditure for 2001/02 is about £100 million. 
 
13.  
A Risk Management Working Group was fully established in January 2001 
 
14. 
The contract for a new claims database TAURUS 2000 was let in March 2001.  
 
15. 
ToPaS introduced November 2000 
 
 
 
 
4

DC&L(F&S)CLAIMS ANNUAL REPORT 2000/2001 
 
PART ONE SECTION ONE  
 DC&L(F&S)CLAIMS ORGANISATION AND RESPONSIBILITIES 
 
Organisation 
 
1.1 
DC&L(F&S)Claims is primarily responsible for processing common-law, non-
contractual compensation claims against and on behalf of the Ministry of Defence at home and 
abroad.  They are not responsible for contractual, quasi-contractual, sales or estates matters.   
DC&L(F&S)Claims is headed by the Chief Claims Officer (Band B1) and the Senior Claims 
Officer (Band C1). The Chief Claims Officer reports to DGSP Pol through DC&L(F&S). A 
summary of the staffing and work of the Claims organisation is at Annex A    
 
Responsibility 
 
1.2 
DC&L(F&S)Claims, in addition to being responsible for processing common law 
compensation claims also has a number of other important responsibilities such as providing 
claims policy advice, handling Service personnel employment tribunal claims, handling claims 
against foreign forces based in the UK and providing advice on insurance and indemnities. It 
also has a variety of secretariat tasks and during the period of this report the Branch dealt with 
106 Parliamentary Enquiries, 213 Official Action Letters and a handful of Parliamentary 
Questions.  
 
1.3 
Area Claims Officers and their staff are located in areas where there is a sizeable 
defence presence - Northern Ireland, North West Europe, Cyprus, Bosnia and the Falkland 
Islands. Area Claims Officers are accountable to their Command Secretary but have a 
professional responsibility to the Chief Claims Officer.    
 
1.4 
It is important that staff at all levels within DC&L(F&S)Claims acquire the skills, 
knowledge and experience needed to enable them to contribute effectively to the goals of the 
division.  Claims staff, therefore, attend a series of structured specialist training seminars 
covering all aspects of common law compensation.  In recognition of the specialised nature of 
the work, a functional competence framework has been introduced to focus on the key skills 
and training required. In addition, staff have studied for common law diplomas and 
professional insurance examinations. 
 
1.5 
As part of our efforts to learn and maintain best practice in claims management, 
DC&L(F&S)Claims arranged for a secondment from one of our commercial claims handlers 
to fill a short term vacancy in our clinical negligence group. This provided not only an 
opportunity to learn from our commercial colleagues but also a chance for the individual 
concerned to engage in an area of business which he might not otherwise encounter. Our 
secondee  was of the highest calibre and we learned a lot from each other.  It is our intention to 
 
5

repeat this exercise at the next opportunity.  We have also taken steps to forge links with 
claims colleagues from other government departments with a view to establishing best practice 
in government and, we hope, to arrange short-term staff exchanges or longer-term 
secondments.   
 
1.6 
The year 2000/01 also saw the finalisation of the functional requirement for a new 
claims database under the name TAURUS 2000.  A contract for development and introduction 
into service was let to Software Solutions for Business of Swindon in March 2001.  We expect 
to have the new system in place by the end of this year and regular project management 
meetings are being held with the company to ensure that the development is kept on track.  
 
Policy and Procedures
 
 
1.7     When compensation claims are submitted from Ministry of Defence civilian and Service 
employees, former employees and members of the public, they are considered on the basis of 
whether or not the Ministry of Defence has a legal liability to pay compensation.   Where there 
is a proven legal liability, compensation is paid.   To deal with cases on any basis other than 
legal liability requires difficult subjective judgements to be made that would undoubtedly lead 
to inconsistency and unfairness.  
 
1.8  The amount of compensation paid is determined by common law principles which, 
broadly, take account, as appropriate, of the individual’s pain and suffering, degree of injury, 
property losses, past and future financial losses, level of care required, etc. Levels of 
compensation including these elements can vary greatly depending on an individual’s 
circumstances. Advice is sought where necessary from Treasury Solicitor’s Department for 
cases brought in England and Wales; the Crown Solicitor in Northern Ireland; and Robson 
McLean, the Department’s legal advisers in Scotland. Junior and leading counsel are also 
consulted on high profile or complex cases or where a point of law needs to be explored.   The 
majority of cases are settled amicably one way or the other and most payments of 
compensation are made without Claimants having to take the Ministry of Defence to court.    
 
1.9 
In accordance with Treasury policy, the Ministry of Defence does not normally make 
ex-gratia compensation payments in respect of occurrences within the UK. There are, 
however, a small number of exceptions: i.e. low flying claims; claims from volunteers who are 
injured during research work and for certain miscarriages of justice affecting Service 
personnel. In certain overseas areas, because of the provisions of the NATO Status of Forces 
Agreement and other international agreements, the Ministry of Defence is obliged to consider 
making ex-gratia payments following off duty torts.   Such claims arise from a wide variety of 
incidents ranging from minor criminal damage to rape and murder. While there is no legal 
obligation, each case is decided on its merits. A number of factors are taken into account 
including: the degree of infamy (the seriousness of the offence), the conduct of the injured 
party, the practice of the host country in identical circumstances, the degree of financial 
hardship to the Claimant as a result of the incident, the political implications - locally and 
 
6

nationally - on relations with the host country, and the availability and/or financial ability of 
the tortfeasor (wrong-doer) to make satisfactory restitution to the Claimant. 
 
1.10 
In addition to common law claims, DC&L(F&S)Claims also handle claims relating to 
Employment Tribunal applications brought by current or former Service personnel. These 
claims typically involve allegations of sexual/racial discrimination or sexual/racial harassment.   
While the single Service secretariat branches will initially receive and investigate Employment 
Tribunal applications, they have no delegated financial authority and claims can only be 
settled by obtaining the agreement of DC&L(F&S)Claims who hold funds centrally.  The 
Claims section dealing with these ET cases has this year been heavily involved with the claims 
for unfair dismissal lodged by former Service personnel discharged by reason of their 
homosexuality. In this connection as a result of a judgment in the European Court of Human 
Rights, the Secretary of State for Defence authorised that settlement negotiations be entered 
into with the individuals concerned who had Employment Tribunal applications already in 
train and whose account has been accepted as being substantially factually true.  We are 
currently managing 83 such cases. Over 60 offers of settlement have been made and, to date, 
15 individuals have accepted those offers and payments have been made. 
 
SECTION TWO       
CLAIMS RISK MANAGEMENT 
 
All staff can play their part in claims risk management.  
 
2.1 
Since the 1999/2000 DC&L(F&S)Claims Annual Report was published, the Risk 
Management Group (RMG) has been formed within Claims as a separate section. The Group 
consists of a Team Leader, an IT Advisor, a Policy Advisor and an Assistant Policy Advisor.  
 
 
£100,000,000
£80,000,000
 
£60,000,000
 
£40,000,000
 
£20,000,000
 
£0
 
 
997
998
999
00
01
/1
7/1
8/1
/20
/20
 
1996
199
199
1999
2000
 
Expenditure
 
2.2 
The graph above illustrates the increase in claims expenditure over the past five years 
and the background against which the Risk Management Group has been set up. With a greater 
emphasis on risk management within the MOD in general and the large increases evident in 
claims expenditure in particular, it is clear that action needs to be taken to reduce the incidence 
of claims wherever possible. It is also important to identify ways of keeping handling costs to 
a minimum when claims are made. Compensation payments in respect of pain and suffering 
are determined by Judicial Studies Guidelines and apply to all compensators, but legal and 
 
7

other associated costs can be reduced if good records are kept and relevant evidence can be 
assembled quickly to enable an efficient investigation into a claim.    
 
Claims Risk Management Working Group and Objectives 
 
2.3 
As the Risk Management paper in the last Annual Report predicted, a Claims Risk 
Management Working Group (CRMWG) has been formed. A number of meetings have been 
held to discuss the objectives for the RMG and to monitor progress being made. The Chief 
Claims Officer, Senior Claims Officer, Claims Team Leaders and the RMG team are 
permanent members of the Working Group with other personnel from within and outside 
MOD invited to attend meetings as appropriate.  
 
The objectives of the RMG are as follows: 
 
a.  Produce a viable database for Claims risk management. 
 
b.  Carry out a preliminary analysis of trends and develop options for addressing problem 
areas.  
 
c.  Produce progress reports to PUS. 
 
d.  Produce quarterly Claims Newsletters 
 
e.  Devise and implement a system for following up risk management aspects of settled claims 
through liaison with claims handlers and solicitors. 
 
f.  Liaise with training establishments and explore the possibility of claims RMG input into 
training courses.  
 
g.  Give presentations and prepare statistics as requested.  
 
h.  Prepare working papers for the Claims Risk Management Working Group and carry out 
follow-up work in line with Working Group endorsement.  
 
i.  Investigate the possibility of recovering sums paid to injured Service and civilian 
personnel during their absence from duty/work from the third parties causing the injuries.  
 
 
2.4 
Central to the work of the team is the first objective which is to construct a risk 
management database containing details of all the claims handled within DC&L(F&S)Claims 
and those handled by AXA and Royal & Sun Alliance on MOD’s behalf. It will also include 
data from IMPACT which is a record of all RTAs involving MOD transport. Once the 
database is up and running, work can begin on the second objective to carry out a preliminary 
analysis of trends and develop options for addressing problem areas. 
 
8

 
2.5 
Of the other objectives, some are already in hand while others will be taken up in the 
following months. The first progress report was delivered to PUS in October 2000 and was 
favourably received. Quarterly Newsletters are now being produced and sent out on a wide 
distribution and are also to be found on MoDWeb. Two Working Papers on the subjects of 
Claims Risk Management in the Defence Secondary Care Agency and MOD Personnel Claims 
Risk Management Training have already been presented to the CRMWG and endorsed. Work 
is progressing in these areas. A further two Working Papers relating to workplace stress claims 
and road traffic accidents are in preparation.   
 
2.6 
As well as spreading the message of claims risk management through publications such 
as the Annual Report and Newsletters, the RMG has continued to give presentations to various 
conferences and interested groups. To begin with, presentations were mostly made to 
audiences with an interest in road safety matters, but more recently the Senior Claims Officer 
and the RMG have spoken at Chiefs of Staff meetings, the International DERA Accident 
Symposium, DSDC staffs at Donnington, Devonport Dockyard, Safety Health Environment & 
Fire Seminars and to staff at Defence Management Training. In each case the presentations 
were designed to highlight the cost of claims and the value of risk awareness for all personnel. 
Presentations are tailored to the requirements of the audience and, where possible, statistics 
relating to the TLB or establishment concerned are included to assist with local risk 
management.  
 
2.7 
Although the risk management database is still in development, some early information 
has emerged: 
 
About 1 in every 113 civil servants presented a claim to MOD in 2000/2001. 
 
About 1 in every 225 Service personnel presented a claim to MOD in 2000/2001.  
 
44% of all claims received during 2000/2001 were attributed to industrial diseases such 
as mesothelioma (caused by exposure to asbestos) and noise induced hearing loss 
which develop over time. 
 
216 Service Personnel Employers Liability claims received, with an estimated cost of 
£4.44 million, were attributed to unsafe environment and working practices. 
 
38% of all claims expenditure during 2000/2001 were Service Personnel Employers 
Liability claims. 
 
 
2.8 
It is hoped that once the RMG can identify trends and hotspots they will provide 
feedback to the areas and establishments concerned. From this feedback action can be taken to 
try and ensure that similar accidents are not repeated and that systems are put in place to foster 
 
9

safe environments and practices for MOD employees and members of the public visiting MOD 
sites. 
 
 

SECTION THREE 
CLAIMS HANDLED BY THE PUBLIC LIABILITY GROUP 
PUBLIC LIABILITY CLAIMS 
 
3.1 
Most claims submitted to the Public Liability Group are for personal injury or property 
damage.   The majority of personal injury claims are from members of the public who have 
either been injured on MOD property e.g. trips and slips, or have sustained injuries whilst 
taking part in the various public relations and recruiting activities run by the three Services e.g. 
assault courses. 
 
3.2 
Property damage claims usually emanate from personnel working and living in service 
accommodation who have had their belongings damaged by the poor maintenance of the 
properties they occupy.   In the past year these have included water damage from burst pipes, 
damp from poor insulation, pot holes in roads, insecure rubbish bins blowing into vehicles and 
soot emissions from boiler room chimneys damaging the paint on vehicles. 
 
Public Liability (PL) Claims 
 
800
 
£3,000,000
700
 
600
£2,500,000
 
500
 
£2,000,000
400
 
£1,500,000
300
 
200
£1,000,000
 
100
£500,000
 0
 
£0
1998/1999
1999/2000
2000/2001
1998/1999 1999/2000 2000/2001
 
Number of PL Claims Received
 
Number of PL Claims Settled
Compensation paid
 
 

 
1998/1999 1999/2000 2000/2001 
Number of PL Claims Received 
563 
722 
556 
Number of PL Claims Settled 
276 
494 
310 
Compensation 
Paid 
£1,357,000 £1,672,000 £2,524,000 
 
 
3.3 
While there was an increase in the number of claims submitted in 1999/2000 due, we 
believe, to a backlog of claims released by solicitors once the new Civil Justice Reforms came 
into force in April 1999, personal injury claims this year have fallen off  slightly from the 
1998/99 figures.   Whilst there is no obvious reason for this, it is thought that it may be due to 
the fact that since the abolition of Legal Aid for personal injury claims and the advent of “no 
win no fee” arrangements, solicitors are only submitting claims where there is a good chance 
 10

they will succeed and therefore some of the more spurious claims are weeded out at an early 
stage.   The large increase in the amount of compensation paid out this year is due to one 
claim, involving the Disposal Sales Agency, which amounted to £630,000.00.  
 
Public Liability Claims – Northern Ireland 
 
3.4 
The Claims PLG also deals with public liability claims from Northern Ireland provided 
they are of a political and/or sensitive nature.   Claims are normally received from members of 
the public who have had some contretemps or other with members of the armed forces whilst 
in support of the RUC.   The majority of claims, therefore, will be for alleged assault, 
harassment or wrongful arrest, quite often at vehicle checkpoints.   As can be seen from the 
table below, the number of claims has decreased due to the cease fire in Northern Ireland 
which has resulted in less military activity in support of the RUC. 
  
Political/Sensitive Public Liability Claims Arising in Northern Ireland 
 
60  
£350,000
50  
£300,000
40  
£250,000
 
30
£200,000
 
£150,000
20  
£100,000
10  
£50,000
 
0
£0
  1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
Number of claims received
 
Compensation paid
Number of claims settled
 
 
 1998/1999 
1999/2000 
2000/2001 
Number of Claims Received 
49 
54 
34 
Number of Claims Settled 
58 
31 
56 
Compensation Paid 
£243,000 
£206,000 
£320,000 
 
MOTOR CLAIMS 
 
“What Englishman will give his mind to politics as long as he can afford to keep a motor 
car?” 
 
3.5 
DC&L(F&S) Claims deals with claims involving Visiting Forces in the UK, and claims 
against the MOD in those non-EU countries not covered by an Area Claims Officer (ACO).  
(AXA Corporate Solutions handle under contract (as distinct from under an insurance policy) 
certain third party claims arising from the authorised operation of UK based vehicles in the 
UK, and in EU countries not covered by an (ACO)).  These claims are handled in exactly the 
same way as other injury claims, and vehicle damage claims are settled on production of a bill 
or an expert’s assessment. DC&L(F&S) Claims does not pay for damage to Ministry of 
 11

Defence owned or hired vehicles as this is the responsibility of the unit involved.  From 1 
April 2001 units are also responsible for claims resulting from “loss of use” and for the “write 
off” of any vehicles damaged beyond economic repair – DCI Gen 108/01 refers. 
 
3.6 
It is not unusual for DC&L(F&S)Claims to receive claims from anywhere in the world 
where British Forces are based, on exercise or even when there is a single defence attaché with 
one car.  In accordance with JSP 341 (to be updated later this year), units and organisations 
should send an F/MT 3 (Initial Accident Report Form) and an FMT 3-1 (the form submitted by 
the user unit notifying details of traffic accidents involving Ministry of Defence owned or 
hired vehicles, and showing that the driver was on duty at the time of the incident), and 
supporting statements to the relevant Departmental Claims Handler or Area Claims Office.  
Unfortunately, this frequently does not happen and claims managers spend a considerable 
amount of time locating these essential documents. 
 
3.7 
Claims managers are required to establish that an authorised driver was driving the 
Ministry of Defence vehicle on an authorised journey and route.  If these criteria are met and 
all the evidence suggests that the Ministry of Defence driver was liable for the accident, then 
compensation will be paid.  Statistics for motor claims for the last three years are shown in the 
table below.  The number of claims received in financial year 2000/2001 shows the overall 
trend is still downward.  We believe that this could be because fewer visiting forces have been 
on exercise in the UK and the  majority of motor claims emanate from this source.   It will be 
noted that despite the downward trend, the level of compensation paid has increased 
dramatically, this being due to one visiting forces claim which was settled for over £600,000.  
 
Motor Claims 
 
 
400
 
£1,200,000
350
 
300
£1,000,000
 
250
£800,000
 
200
£600,000
 
150
 
£400,000
100
 50
£200,000
 0
£0
 
1998/1999
1999/2000
2000/2001
1998/1999 1999/2000 2000/2001
 
Number of motor claims received
Compensation paid
 
Number of motor claims settled
 
 
1998/1999 1999/2000 2000/2001 
No. of motor claims received (excluding claims 
371 357 336 
handled by AXA Global Risk Services UK Ltd) 
No. of motor claims settled (excluding claims 
347 337 265 
handled by AXA Global Risk Services UK Ltd) 
Compensation 
paid 
£687,000 £613,000 £1,076,000 
 
 12

The number of claims in these categories being received should be taken in the context of the 
annual number of hires (approximately 150,000) and miles driven (approximately 45 million). 
 
MARITIME CLAIMS 
 
“A man who is not afraid of the sea will soon be drownded for he will be going out on a day 
he shouldn’t.   But we do be afraid of the sea, and we do only be drownded now and again” 
 
3.8 
Maritime claims by and against the Ministry of Defence result mainly from collisions, 
oil spillage, gunnery/missile firing incidents, damage to static property, wash damage, fishing 
gear damage and the salvage and recovery of MOD property.  Maritime law is complex and 
much of the legislation dealing with the law of the sea was enacted more than ninety years 
ago. 
 
3.9 
In addition to the work undertaken by DC&L(F&S) Claims, Flag Officer Scotland, 
Northern England and Northern Ireland (FOSNNI) and Flag Officer Sea Training (FOST) 
have delegated authority from the Chief Claims Officer to settle claims of up to £8,000 per 
fishing gear claim, £5,000 per collision claim and £1,000 per oil spillage claim. 
 
Salvage  
 
3.10  The Ministry of Defence provides assistance to ships in distress in UK waters and 
regularly helps in other parts of the world.  If as the result of the assistance given by a Ministry 
of Defence owned ship or aircraft a vessel is salved, the Ministry of Defence is entitled to 
claim salvage based on the value of the ship and its cargo.  Part of the amount in salvage is 
paid to the crew of the assisting ship or aircraft in accordance with the Merchant Shipping Act 
1864.  It is Ministry of Defence policy not to claim salvage when life saving has been the main 
aim of the assistance given.  Although uncommon, salvage claims by members of the public 
for the successful recovery of our property can likewise be made against the Ministry of 
Defence. 
 
Maritime statistics for the last three years 
 
160
  £700,000
14  0
£600,000
120 
£500,000
100 
80
£400,000
 
60
£300,000
 
40
£200,000
 
20
£100,000
 0
£0
1998/1999
1999/2000
2000/2001
1998/1999 1999/2000 2000/2001
 
 
Claims received
Claims settled
 
Compensation paid
 13

 
 
1998/99 1999/2000 2000/01 
Claims received 
159 
44 
28 
Claims settled 
24 
27 
23 
Compensation paid 
£698,934 
£109,895 
£165,733 
 
 
Last year has seen a continuation of normal levels of claims activity following the unusually 
high numbers recorded in 1998/1999.  
 
Maritime claims settled by FOST and FOSNNI 
 
60  
£100,000
50  
£80,000
 
40
 
£60,000
30  
£40,000
20  
10
£20,000
 
 
£0
  1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
No. of FOSSNI claims settled
Compensation paid by FOSNNI
No. of FOST claims settled
Compensation paid by FOST
 
 
 
1998/1999 1999/2000 2000/01 
Number of FOSNNI claims settled 
59 
54 
35 
Compensation paid by FOSNNI 
£81,230 
£79,394 
£59,154 
Number of FOST claims settled 
40 
51 
33 
Compensation paid by FOST 
£60,859 
£76,923 
£60,558 
Total compensation paid 
£142,089 
£156,317 
£119,712 
 
Maritime Recoveries and Salvage claims on behalf of MOD 
 
 
£500,000
14  
12  
£400,000
10  
£300,000
 
 
£200,000
 
£100,000
 
 
£0
1998/1999
1999/2000
2000/2001
  1998/1999
1999/2000
2000/2001
  Number initiated
Number settled
Total recovered
 
 14

 
 1998/1999 
1999/2000 
2000/01 
Number initiated 
10 
10 
13 
Number settled 



Total recovered 
£164,804 
£134,164   
£434,099 
 
The amount recovered last year which is a significantly above the previous two years, is 
primarily the result of one particularly high value salvage claim. 
 
MILITARY LOW FLYING CLAIMS IN ENGLAND, SCOTLAND AND WALES 
 
3.11  The activities of low flying military aircraft can sometimes give rise to claims for 
compensation from members of the public.  The most common claims are those involving 
injury to or death of livestock and/or damage to property although claims are sometimes 
received for personal injury.  Many of the claims are for relatively small amounts but low 
flying military aircraft activity is an emotive issue in some areas of the country.  Claims 
arising from low flying military aircraft activity are handled on an ex gratia basis but are 
investigated in the same way as if the principles of legal liability applied.  The foundation of 
this approach is the Royal Prerogative which gives an absolute right for all military flying 
activity and, therefore, an injured party has no legal rights of redress for compensation.  This 
approach was set out in a Lords Written Answer by Lord Drumalbyn on 22 November 1971 
(Official Report Column 888) thus : 
 
"… No remedies exist in law against any military aircraft flying by virtue of the Royal 
Prerogative for the purpose of the defence of the Realm or of training or of 
maintaining the efficiency of the Armed Forces of the Crown.  The ... Ministry of 
Defence will, however, pay compensation on an ex gratia basis if satisfied that the 
damage has been caused by a military aircraft." 

 
3.12 
A procedure has been in place since 1994, following consultation with various farming 
unions and landowners’ associations, for dealing with claims relating to death or injury to 
livestock.  The procedure was most recently updated in December 1999 after a round of 
consultations with the NFU, Country Landowners’ Association and other similar bodies. In 
accordance with the Livestock and Animal Compensation Claims Guidance the claimant 
should report the incident promptly, provide veterinary evidence and a fully quantified claim.  
 
3.13 
Unfortunately, this is a category of work which requires careful monitoring to identify 
potentially fraudulent claims. Once again, however, we are happy to report that no 
investigations into fraud were initiated during 2000/2001. 
 
3.14 
On a local level, where public relations play an important role, RNAS, AAC and RAF 
Station Commanders have delegated authority to settle straightforward claims up to the value 
of £200 where the claimant lives within two miles of the airfield.  The Regional Community 
 15

Relations Officers (RCROs) have been given authority from the Chief Claims Officer to 
recommend fast track settlements for simple straightforward claims up to £250. 
 
Low flying claims statistics for England, Scotland and Wales 
 
 
300
£900,000
 
250
£800,000
 
£700,000
200
£600,000
 
150
£500,000
 
£400,000
100
 
£300,000
£200,000

 50
£100,000
  0
£0
1998/1999
1999/2000
2000/2001
 
1998/1999
1999/2000
2000/2001
Number of claims received
 
Number of claims settled
Compensation paid
 
 

 
1998/1999 1999/2000 2000/2001 
Number of military low flying claims received 
272 
233 
194 
Number of military low flying claims settled 
180 
160 
131 
Low flying compensation paid 
£610,000 
£682,000 
£822,000 
 
 
Once again there has been a slight decrease in the number of claims received.  This again 
reflects the overall general, and continued, reduction in the number of low level sorties over 
mainland Britain due to operational commitments elsewhere.  
  
3.15  The Defence Estates organisation (DE) has delegated authority to settle property 
damage claims arising from military aircraft crashes in the UK within delegated financial 
authority of up to £50,000 per claim.  DE personnel perform valuable work in the aftermath of 
an air crash and have the expertise to assess many different types of damage from forestry to 
buildings.  This was well illustrated following a RAF Hawk crash at Shap, Cumbria in October 
1999 where a number of properties were severely affected by debris from the crash. 
 
Air Crash claims settled by DE 
 
 
35
£200,000
 
30
 
25
 
20
£100,000
 
15
 
10
5
 0 
£0
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
Number settled
Total value
 16

 
1998/1999 1999/2000 2000/2001 
Claims settled 

33 
11 
Total value 
£128,300 
£93,511  
£112,458 
 
 
 
VISITING FORCES CLAIMS 
 
3.16 
DC&L(F&S) Claims handles third party claims by and against Visiting Forces based in 
or visiting the United Kingdom under the provisions of Article VIII of NATO SOFA and 
Section 9 of the Visiting Forces act 1952.  Such claims could be on behalf of any of the states 
who are signatories to the agreement or who are invited to train in the UK, but primarily 
involve the USA, Holland, Belgium and Germany.  Claims are investigated and handled in 
exactly the same way as if British Forces were involved and, if satisfied that the Visiting Force 
is liable, the Ministry of Defence pays compensation on their behalf.  In the case of NATO 
countries, the Sending State is generally billed for 75% of the amount paid, the United 
Kingdom paying the other 25%.  The vast majority of Visiting Forces cases result from road 
traffic accidents. 
 
Visiting Forces Claims 
 
 
90
 
£900,000
80
£800,000
 
70
£700,000
 
60
£600,000
 
50
£500,000
40
 
£400,000
30
 
£300,000
20
£200,000
 
10
£100,000
 0
£0
1998/1999
1999/2000
2000/2001
 
1998/1999
1999/2000
2000/2001
 
Number of claims received
Compensation
Number of claims settled
 
paid
 
1998/1999 1999/2000 2000/2001 
Number of visiting forces claims received 
85 
81 
72 
Number of visiting forces claims settled 
70 
73 
53 
Compensation 
paid 
£241,000 £128,000 £875,000 
 
While again the number of claims received shows a downward trend, the level of 
compensation paid has increased dramatically due to the one motoring claim mentioned in 
paragraph 3.7. 
 17

 
AREA CLAIMS OFFICERS (ACO) 
 
ACO Northern Ireland 
 
3.17  The majority of claims handled by the Area Claims Office in 2000/2001 were as a 
result of helicopter activity.  The main heads of claim were livestock, bloodstock and property 
damage.  The outbreak of foot and mouth in February 2001 had the effect of reducing the 
number of claims being received from the affected area of South Armagh as low flying in this 
area was curtailed.  Claims settled during the year ranged from £28 for a blouse blown off a 
clothesline to £9,500 for damage to an astro-turf hockey pitch. 
 
ACO NI 
 
1000  
800  
£1,500,000
£1,400,000
600  
 
£1,300,000
400  
£1,200,000
200  
£1,100,000
 
£1,000,000
 
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
Number of claims received
Total Paid
 
Number of claims settled
Number of claims repudiated

 
 
1998/1999 1999/2000 2000/2001 
Number of claims received 
834 
858 
832 
Number of claims settled 
809 
708 
747 
Number of claims repudiated 
270 
194 
212 
Total 
paid 
£1,297,000 £1,433,000 £1,210,000 
 
ACO North West Europe 
 
3.18  ACO NWE is part of the Civil Secretariat, United Kingdom Support Command 
(Germany) based at JHQ Rheindahlen.  It is responsible for handling claims by and against the 
Ministry of Defence in Germany, Norway, Holland, Belgium, Luxembourg, France, Austria, 
Switzerland, Poland, Hungary and the Czech Republic.  The Area Claims Officer has 10 staff 
dealing with claims and related issues. 
 
3.19  2000/01 has been a particularly busy year for ACO NWE.  Although Road Traffic 
Accidents continue to form the bulk of the work of the office, claims coverage of exercises in 
Poland, increasing volumes on Personal Injury cases and achieving record recovery levels 
have been the main features of the year. 
 
3.20 Poland 
 
ACO staff have attended every major British Forces exercise in Poland since 
1996.   The aim has been to assess the condition of the training area on take-over; monitor 
damages during the exercise and settle claims at the end.  Until Poland joined NATO the 
 18

provisions contained within the NATO Status of Forces Agreement did not apply and therefore 
the UK was responsible for settling all damages claims, including training area damage.   
Exercise Prairie Eagle 2001 is the first exercise to be conducted under the NATO SOFA 
banner and ACO staff have been involved in the MOU negotiations and are working closely 
with the British and Polish forces to develop new systems for handling claims.  At the time of 
writing Prairie Eagle 2001 has gone well and all parties are happy with the new arrangements 
although claims for the exercise have yet to be finalised. 
 
3.21 
Personal Injury Claims   ACO NWE has responsibility for handling all Personal 
Injury (PI) claims from dependent employees of the Force in Germany and for any claims 
involving children attending Service Children Education establishments in Germany.  Claims 
are on the increase although it has to be said that an increasing number of claims are being 
repudiated. All PI claims are handled in accordance with the Civil Procedure Protocols and 
ACO staff are visiting more incident scenes in order to conduct full investigations in a bid to 
establish liability. 
 
3.22 Recoveries   2000/01 has been a record year for the ACO NWE in terms of recovery 
action, with over £1Million  of MOD losses being recovered.  This is mainly due to the 
successful conclusion of court action which the Force brought against a major German insurer.  
The decision of the German Supreme Court in July 2000 was the conclusion of 8 years 
litigation and finally established the British Forces’ right to recover costs when Service 
personnel passengers are injured in all road traffic accidents.  The decision resulted in around 
80 outstanding claims being settled and almost £500,000 being recovered.  Much credit for 
this outcome must go to ACO staff, particularly Mr John Hawkins who has worked on the case 
since the beginning and saw it through to a successful conclusion. 
 
3.23 
One other significant court decision remains outstanding although ACO NWE remains 
hopeful that the judgement will be in its favour, with MOD seeking to recover around 
£200,000 of losses.  Attempts to maximise recoveries will continue throughout 2001.   
 
ACO NWE 
 
 2000
£2,500,000
 1500
£2,000,000
 
£1,500,000
 1000
£1,000,000
 500
£500,000
 
  0
£0
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
 
Number of claims received
Total Paid
Number of claims closed
Total Recovered
 
 
1998/1999 1999/2000 2000/2001 
Number of claims received 
1,245 
1005 
1158 
Number of claims closed 
1,744 
1011 
1208 
Total 
paid 
£2,206,000 £1,819,000 £1,528,000 
Total 
recovered 
£700,000 £963,000 £1,008,000 
 19

 
 
ACO Cyprus  
 
3.24  ACO Cyprus comprises two members of staff who are responsible for processing 
claims by and against MOD and the Sovereign Base Areas Administration in Cyprus and its 
territorial waters.  The range of claims dealt with is similar to that of ACO NW Europe (road 
traffic accidents, public and employer’s liability, and training and manoeuvre damage), but the 
Cyprus Treaty of Establishment (ToE) rather than the NATO Status of Forces Agreement 
applies. 
 
3.25 
The Cypriot climate and terrain provide excellent training opportunities for the British 
forces, both in the air and on the ground.  Most of this takes place on private land under rights 
granted by the ToE.  Consequently a good deal of ACO’s work involves settling training and 
manoeuvre damage claims arising from the activities of our forces, whether the resident 
battalions and squadrons or those visiting from UK.  These claims are predominantly for loss 
of livestock (which will sustain injury and abortion if panicked by helicopters, pyrotechnics, 
etc.) and crop damage.  In providing a rapid response to the claims and complaints raised by 
farmers and landowners, ACO plays a significant role in maintaining good relations between 
MOD and the local community, a vital ingredient in supporting the UK’s training rights. 
 
3.26 
ACO seeks to reduce the risk of damage being caused and to that end routinely briefs 
all exercise reconnaissance  officers prior to training taking place.  It is of course impossible to 
quantify the savings made with any certainty, but there can be no doubt that the raising of 
awareness of local issues and concerns has contributed at least in part to a continuing reduction 
in claims against MOD.  It should also be borne in mind that the British forces’ sensitivity to 
the needs and wishes of the local population has led to more and more training over the last 
year taking place on those pockets of land which are relatively uncultivated and contain fewer 
livestock, although of course a significant factor in the reduction in claims is due to the fact 
that MOD’s various operational commitments throughout the globe continue to reduce the 
armed forces’ capacity to train in Cyprus at all. 
 
ACO Cyprus 
 
 
£250,000
 
600
 
500
£200,000
 
400
£150,000
 
300
£100,000
 
200
100
£50,000
 
 0
£0
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
Number of claims received
Total Paid
Number of claims closed
Total Recovered
 20

 
 1998/1999 
1999/2000 
2000/2001 
Number of claims received 
519 
389 
364 
Number of claims closed 
509 
371 
365 
Total paid 
£228,000 
£215,000 
£134,000 
Total recovered 
£37,000 
£22,000 
£22,000 
 
 
ACO Bosnia 
 
3.27 
ACO Bosnia is based at HQ Multinational Division (SW) in Banja Luka and deals with 
all claims by and against the UK contingent of SFOR.  The majority of claims continue to be 
as a result of road traffic accidents, which often include personal injuries.  However, property 
damage claims continue to be submitted and as more people return to their properties, claims 
for compensation for roads built on their property are being made.  Claims from Municipalities 
(local authorities) for damage to longer stretches of existing roads and bridges by tracked and 
heavy vehicles are increasing.   
 
3.28  The situation in Kosovo remains unchanged with no claims policy in place.  ACO 
Bosnia continues to hold potential claims and as further action cannot be taken at present the 
claims have been recorded as “closed”.  If a claims policy is agreed as a result of the Technical 
Agreement being signed there could be a substantial liability to the UK contingent. 
 
3.29 
Also included in the “closed” figures are those claims passed to the Legal Adviser for 
MND(SW).  These  claims relate to properties situated on the Glamac Firing Range that were 
destroyed by Multinational Contingents when using the range for live firing.  Should these 
claims become a future liability, they would not all fall to the UK Contingent to settle.   
 
3.30  While the figure for sums recovered remains at Nil, a claim has been registered with 
the Ministry of Justice in Sarajevo.  ACO Bosnia has continued to press for the claim to be 
assessed and a meeting will take place with a Judge who will adjudicate the case. 
 
3.31  The ACO post in Macedonia was withdrawn this year with the responsibilities 
transferring to ACO Bosnia.  The figures reported for this year therefore include those 
transferred from ACO Macedonia.  
 
ACO Bosnia 
 
 

£350,000
 600
£300,000
500
 
£250,000
400
£200,000
 300
£150,000
 200
£100,000
 
£50,000
100
 
£0
0
 
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
Number of claims received
Total Paid
Total Recovered
Number of claims closed
 21

 
 1998/1999 
1999/2000 
2000/2001 
Number of claims received 
321 
440 
288 
Number of claims closed 
221 
208 
578* 
Total paid 
£325,000 
£309,000 
£265,356 
Total recovered 
£NIL 
£NIL 
£NIL 
 
*   Includes 125 Kosovo claims to be actioned when a claims policy is in place in the future 
and 241 claims passed to Legal Adviser MND(SW). 
 
Claims Officer Falkland Islands 
 
3.32 
Claims Officer Falkland Islands has authority to handle common law property damage 
claims up to a value of £5,000 per claim.  Claims are handled in accordance with local law 
which is identical to English law.  In the last year claims have included damage to Landrovers 
involved in RTAs with service vehicles, damage to a contractor’s carpet caused by a burst pipe 
and a claim for time spent gathering sheep that had escaped through a gate left open by service 
personnel. The ACO undertakes a range of other duties for the Civilian Secretary.  
 
  8

£4,000
 
 
£3,000
  7
£2,000
 
 
£1,000
  6
£0
 
2000/2001
2000/2001
 
No of claims received
 
Total paid
Total recovered
No of claims closed
 
 
00/01 
Number of claims received 

Number of claims closed 

Total paid 
£3,471 
Total recovered 
£NIL 
 
 
FINANCIAL RECOVERIES 
 
3.33 
Where the Ministry of Defence sustains loss or damage to equipment which has been 
caused by a third party, DC&L(F&S)Claims seeks to recover those losses from the third party.   
The main causes for taking action against third parties are where MOD static property has 
been damaged by fire, the negligence of a contractor, traffic accidents overseas and damage to 
visiting forces’ vehicles and static property in the UK.   Recovery claims world wide, except 
where there is an Area Claims Officer, are handled by DC&L(F&S)Claims.   The exception to 
this is where a road traffic accident involves a MOD-owned vehicle in the UK.   Where the 
 22

third party is at fault, recovery is pursued, under contract to MOD, by Willis Insurance 
Brokers;  this comprises the bulk of recoveries. 
 
3.34 
The number of recoveries processed by DC&L(F&S)Claims in each of the last three 
financial years is shown in the following graphs and table: 
 
 66
 56
£70,000
 
£60,000
46
 
£50,000
36
 
£40,000
 26
£30,000
 16
£20,000
  6
£10,000
 
1998/1999
1999/2000
2000/2001
£0
1998/1999
1999/2000
2000/2001
 
No of claims notified
 
No of successful recoveries
Amount recovered
 
 
1998/1999 1999/2000  2000/2001 
No of claims notified  
29 
38 
60 
No of successful recoveries 
17 
14 
16 
Amount recovered 
68,000 
45,000 
13,000* 
 
*   A further £16,000 was recovered during March although the payments were too close to the 
end of the financial year to be processed. 
 
3.35 
Willis Ltd recover on behalf of the Ministry of Defence the cost of damage caused to 
its vehicles in accidents which are the fault of a third party.  The number of recoveries 
and the amounts received are shown in the charts below. 
 
 
 706
 
£700,000
606
 
£600,000
506
 
£500,000
406
 
£400,000
306
 
£300,000
206
 
£200,000
106
 
£100,000
6
£0
 
1998/1999
1999/2000
2000/2001
1998/1999
1999/2000
2000/2001
 
No of recoveries
 
Amount recovered
 
 
 
 
 
 23

 
1998/99 1999/00 2000/01 
Number of 
Amount 
Number of 
Amount 
Number of 
Amount 
recoveries 
recovered
recoveries 
recovered 
recoveries 
recovered 
made 
(£M) 
made 
(£M) 
made 
(£M) 
 
 
 
 
 
 
 
495 
0.458 
626 
0.645 
208 
0.173 
 
 
 
SECTION FOUR 
CLAIMS HANDLED BY THE SERVICE PERSONNEL 
EMPLOYERS LIABILITY GROUP 
 
 
4.1 
Prior to 1948, it was not possible for any individual to sue the Crown. This was 
because of the long held principle that ‘the Crown could do no wrong’. However, in 1947, 
legislation was passed enabling the Crown to be sued for acts of negligence. Section 10 of that 
legislation, The Crown Proceedings Act 1947, prevented Service personnel who were on duty 
or on any land, premises, ship, etc. being used for the purposes of the Armed Forces from 
suing for compensation.  This position remained until 15 May 1987 when The Crown 
Proceedings (Armed Forces) Act 1987 repealed Section 10 of The Crown Proceedings Act 
1947.  Since then Service personnel have, like any other employee, been entitled to sue the 
MOD for compensation where they have suffered as a result of the Department’s negligence.  
The repeal of Section 10 was not made retrospective. 
 
4.2 
Compensation in the form of a war pension and associated benefits is, also  available to 
all former members of HM Forces suffering from Service attributable illness or injury. War 
Pensions are administered and paid by the Department of Social Security’s War Pensions 
Agency and are non-discretionary, not means-tested and are made on a no-fault, tax free and 
retrospective basis. They are uprated annually. Most pension and related benefit rates vary 
depending on the degree of physical disability and do not reflect actual financial losses or 
hardships.    
 
4.3 
During the last financial year 924 employer’s liability compensation claims were 
received from Service and ex-Service personnel. During the same period 948 cases were 
settled for approximately £36.6 million (including adverse legal costs) and a further 397 were 
either repudiated or withdrawn. These on the whole consisted of personal injury cases which 
were handled by Royal and Sun Alliance who, since 1 July 1996 have been contracted to 
handle such claims.  The contract for this work was extended for one year to bring its term in 
line with our claims handling contract with AXA enabling us to mount a single competition for 
the work.  
 24











 
 
£40,000,000
 
£30,000,000
 
 
£20,000,000
 
£10,000,000
 
£0
 
 
 
 
Expenditure
 
F/Y 
Compensation paid (£M) 
00/01 36.6 
99/00 31.0 
98/99 26.7 
97/98 25.3 
96/97 14.5 
 
 
 
BRIEF SUMMARY OF GROUP CLAIMS 
 
Post Traumatic Stress Disorder 
 
4.4 
The Department’s position concerning stress is that we acknowledge that some 
members of the Armed Forces may, during the course of their careers, be subjected to 
traumatic experiences and may suffer stress as a result. This does not necessarily mean that the 
MOD has been negligent. The Department does, however, have a duty to ensure that Service 
personnel receive proper treatment and where we fail in this respect, and the individual suffers 
some loss or damage as a result, then that individual may be entitled to compensation. 
 
4.5 
About 290 claims have been received from former members of the Armed Forces 
mainly relating to service during the Falkland conflict, Gulf conflict, Bosnia and Northern 
Ireland. Because many of the claims contain similar allegations a Group Action was set up by 
the Supreme Court last year.  The allegations in general terms are that the Department was 
negligent in that it failed to properly recognise, diagnose and treat those said to be suffering 
from post traumatic stress disorder. The Group Action consists of two groups: Group 1 where 
the earliest alleged failure by the MOD occurred before 15 May 1987 (the date on which 
section 10 of the Crown Proceedings Act 1947 was repealed) and Group 2 where the earliest 
alleged failure took place after 15 May 1987.  
 
 25

4.6 
At the direction of the High Court solicitors acting for the claimants have been 
permitted to ‘advertise’ the Group Action for a six month period commencing April 2001 to 
ensure that all those who believe they may have been treated similarly have the opportunity to 
join the action. 
 
4.7 
The case comes before the High Court in February 2002 when a Judge will hear 
evidence from both sides and rule on the issue of liability.  The ruling in each of these lead 
cases will be binding in regard to the similar non-lead cases. A pre trial review will be held 
before the trial judge sometime between 1 June and 31 July 2001. 
 
Asbestos-related Disease 
 
4.8 
The legal position is that even if an ex-Serviceman only now discovers he has an 
asbestos related disease, he cannot sue for compensation if exposure was before the repeal of 
Section 10 of The Crown Proceedings Act 1947. Given that controls over the use of asbestos 
were introduced in 1970, this is and will be the case for the vast majority of ex-Service 
claimants. (The time between exposure to asbestos dust and fibre and the first signs of disease 
is typically between 15 and 40 plus years).  This legal restriction does not apply to civilians 
who are entitled to claim compensation if they were exposed after 1 January 1948 by virtue of 
the 1947 Act.  Former member of HM Forces suffering from asbestos related illness associated 
with their service are, however, eligible for compensation in the form of a war pension and 
associated benefits.  
 
4.9  The issue of the apparent unfairness in compensation arrangements for ex-MOD 
employees with asbestos related disease has already been highlighted by MPs. Minister (AF), 
alongside the Under Secretary of State at the Department of Social Security (then responsible 
for War Pensions), chaired a meeting with interested  MP's at the beginning of last year, to 
discuss compensation for ex-Service personnel suffering from asbestos related disease.  
 
Nuclear Test Veterans  
 
4.10 
There have been no significant developments in this area since March 2000 when the 
European Court of Human Rights (ECHR) rejected a request for the revision of the judgment 
in 2 test cases (McGinley and Egan -v- UK and LCB -v- UK) where the ECHR had ruled in 
favour of the UK. 
 
Gulf Veterans' Illness - Intentions to claim   
 
4.11  The  Department has still not received any writs or claims of detail stating specific 
allegations of negligence sufficient to start considering these claims. The Ministry of Defence 
has not accepted either cause or negligence but has acknowledged less than satisfactory 
handling of a number of matters, such as the failure to transfer details of vaccination to 
permanent records, the way in which "informed consent" was implemented and the initial 
failure to provide information about the use of organophosphates.  
 26

 
4.12  During the reporting year, DC&L(F&S)Claims received 40 notifications from Gulf  
conflict veterans, their families and civilians of an intention to claim compensation.  The total 
number of such notifications as at 31 March 2001 was 1866. 
 
4.13 
Further information on Gulf veterans’ illnesses issues is available from the Ministry of 
Defence’s Gulf Veterans Illnesses Unit (Helpline number: Freephone 0800 169 4495, Fax 020 
7305 2374); the Ministry of Defence’s internal CHOTS web site at: 
‘Personnel/Military/Veterans/Gulf Veterans Illnesses’ or on the Internet at: 
http://www.mod.uk/policy/gulfwar/index.htm.  The postal address for enquiries is Gulf 
Veterans Illness Unit, Room 6/75, Ministry of Defence, St Christopher House, Southwark 
Street, London SE1 0TE    
 
Radiation Compensation Scheme 
 
4.14 
The MOD is a member of the nuclear industry’s Compensation Scheme for Radiation 
Linked Diseases.  This is a no fault scheme where there is no requirement for claimants to 
prove negligence on the part of the Department in order to receive compensation.  The 
Scheme, which MOD joined in 1994, was set up and is run jointly by the participating 
employers and Trade Unions and does not affect the claimants’ right to seek legal redress.  The 
Scheme provides for the assessment of a case, on an agreed technical basis, in order to 
determine the probability that a cancer contracted by a worker could have been caused by 
occupational radiation exposure.  The amount of compensation payable in a successful case is 
determined by negotiation between the solicitors representing the parties based upon the same 
guidelines that  would apply if the case had proceeded to Court.  The Scheme provides for 
payments to be made for lower levels of causation probability than would be allowed by the 
Courts.  In addition the Scheme provides a “full” payment at a level of 50% causation 
probability and lesser payments down to a level of 20% causation probability.  In this way the 
assessment of a case recognises that even below the balance of probability there is a chance 
that exposure to occupational ionising radiation played a role in the disease. 
 
4.15  During financial year 2000/01, the Scheme received nine new claims from former 
Ministry of Defence employees (military and civilian) who believe their illness is associated 
with exposure to occupational ionising radiation.  No claims were settled during the period.  
(Since 1994 four Ministry of Defence cases have been settled under the Scheme). 
 27

 
SECTION FIVE - MOD CIVILIAN EMPLOYEES 
 EMPLOYER’S LIABILITY CLAIMS 
 
5.1 
Since 1982, the Ministry of Defence has contracted out the handling of its civilian 
employee's employer's liability claims.  AXA Corporate Solution Services Ltd hold the current 
contract, which expires in 2002.  A follow-on contract to last for a period of five years will be 
awarded by competitive tender. 
 
5.2       Civilian Ministry of Defence employees injured in the course of their official duties 
may be able to claim compensation.  Details on how to submit a claim are contained in 
Volume 16, Section 7 of the Ministry of Defence Personnel Manual.  The main types of claims 
received in the last three years from current or former Ministry of Defence civilian staff are 
shown in the charts below. 
 
 
 
 
 
600
 
500
Asbestos related disease
 
400
 
Noise Induced Hearing Loss
 
300
 
200
Vibration White Finger
 
100
 
Accident Injury
  0
1998/1999
1999/2000
2000/2001
 
 
 
Type of Claim 
Number of claims received in each FY 
 
1998/99 1999/00 2000/01 
Asbestos-related disease 
237 
223 
215 
Noise Induced Hearing Loss 
297 
202 
143 
Vibration White Finger 
90 
53 
35 
Accident Injury 
562 475  498 
(Falls/Machinery/Lifting) 
TOTALS 1186 
953 
891 
 
 
 
 
 
 
 

 28

 
 
 
 
 

Civilian Employees Employer's Liability Claims - Compensation Paid
£8,000,000
£7,000,000
Asbestos-related disease
£6,000,000
£5,000,000
Noise Induced Hearing Loss
£4,000,000
£3,000,000
Vibration White Finger
£2,000,000
£1,000,000
Accident Injury
(falls/machinery/lifting)

£0
2000/2001
 
Type of Claim 
Cost of Claims 
 2000/01 
2000/01 
total paid 
outstanding 
estimate 
Asbestos-related disease 
£7.115 
£4.331 
Noise Induced Hearing 
£0.682 
£0.362 
Loss 
Vibration White Finger 
£0.115 
£0.123 
Accident Injury 
£6.806 
£4.220 
(Falls/Machinery/Lifting) 
TOTALS £14.718 
£9.036 
 
SECTION SIX   
THIRD PARTY MOTOR CLAIMS 
 
6.1 
Since 1982, the Ministry of Defence has contracted out the handling of third party 
motor claims against the Department.  The current contract, which expires in 2002, is held by 
AXA Corporate Solution Services Ltd.  A follow-on contract to last for a period of five years 
will be awarded by competitive tender.  Details of MOD’s liabilities in respect of motor 
vehicles can be found in DCI GEN 42/00
 
6.2 
The majority of motor accidents involving Ministry of Defence vehicles occur within 
the UK, although AXA do handle around 40 third party claims each year from UK based 
vehicles travelling in mainland Europe. The number of third-party claims received by AXA is 
shown in the charts below. 
 29

3000
 
2500
 
 
2000
 
1500
 
 
1000
 
500
 
0
 
1998/1999
1999/2000
2000/2001
 
 
Army
Navy
RAF
Other
 
Service 1998/99 1999/00 2000/01 
Army 2652  2261  1944 
Navy 356  337  271 
RAF 593  537  443 
Other 258  349  373 
TOTALS 3589 
3484 
3031 
 
 
6.3        In Financial Year 2000/01, AXA settled claims worth £8.777M, on behalf of MOD, in 
relation to Third Party Motor Claims against the MOD.  
 
6.4      Claims arising from non-UK based vehicles overseas are handled by the appropriate 
Area Claims Officers (ACO) or DC&L(F&S)Claims where no ACO exists in that 
geographical area.  
 
6.5 
In addition, DC&L(F&S) Claims handle third party claims involving Visiting Forces in 
the UK.  Any personal injury element of such claims is handled in exactly the same way as 
other injury claims, and damage claims are settled on production of a bill or an expert’s 
assessment. DC&L(F&S)Claims does not pay for damage to Ministry of Defence owned or 
hired vehicles as this is the responsibility of the unit involved.  
 
SECTION SEVEN 
CLINICAL NEGLIGENCE CLAIMS 
 
“When religion was strong and medicine weak, men mistook magic for medicine” 
  
7.1 
In a clinical negligence case the Claimant is not home and dry by merely proving 
negligence.  He or she must successfully overcome the hurdle of causation. Even if a medical 
practitioner or hospital has been negligent it does not always follow that the negligence was 
causative of the claimant’s injury or illness now claimed. Causation issues arise in a relatively 
high proportion of clinical negligence claims, and those submitted to the Department by their 
 30

very nature tend to be long drawn out affairs, involving clinical experts in different specialisms 
preparing reports for both parties.  
 
7.2 
If  some solicitors are to be believed, a very large percentage of personal injury and 
clinical negligence actions are pursued successfully. Defending such claims is an inherently 
complex business, but we estimate that about half of clinical negligence claims submitted to 
the Department are successfully repudiated, withdrawn or not pursued. 
 
7.3 
During financial year 2000/2001 the Claims Section dedicated to the handling of 
clinical negligence cases received 128 new claims. The number of active clinical negligence 
claims at the end of the financial year was 244 compared to 280the previous year. 79 claims 
were settled during the period at a value of £10,617,263 which included two claims which 
settled in excess of £1.5 million each. Details covering the past four years are shown below: 
 
£12,000,000
350
 
£10,500,000
300
 
£9,000,000
250
 
£7,500,000
200
 
£6,000,000
150
 
£4,500,000
100
 
£3,000,000
50
 
£1,500,000
0
£0
 
1997/1998
1998/1999 1999/2000
2000/2001
1997/1998 1998/1999 1999/2000 2000/2001
  Number of claims received
 
compensation paid
Number of claims settled
 
 
1997/1998 1998/1999 1999/2000 2000/2001 
Number of Clinical 
308 255 147 128 
Negligence claims received  
Number of Clinical 
58 112 79  79 
Negligence claims settled   
Compensation plus cost of 
£3,545,060 £9,816,803 £9,688,420 £10,617,263 
claims settled  
 
 
7.4 
The rate of new claims received continues to fall compared with previous years, 
probably due to the closure of some service hospitals. The variety of clinical negligence claims 
is wide ranging and includes allegations of wrongful or late diagnosis of medical conditions, 
fractured limbs, incorrect or negligently performed medical procedures by military clinicians 
and brain damaged babies at birth.     
 
7.5 
During financial year 2000/01, a number of claims for compensation were received 
from members of the 1st Battalion, the Parachute Regiment who allege that they contracted 
malaria, as a result of clinical failure to ensure they had proper anti-malaria protection prior to 
their deployment to Sierra Leone in May 2000.  These claims are ongoing.       
 31

 
7.6 
In addition, we received notification of a small number of claims involving NHS 
patients who were treated by Service clinicians in NHS Trust hospitals. Service clinicians 
regularly work in NHS hospitals and under the terms of a Service Level Agreement between 
the Department and the respective NHS Trusts, these claims are handled by the Trust’s 
solicitors. However, the NHS Trust will look to the Department to meet the costs in full  where 
negligence is established on the part of the Service clinician or contribute to the costs where 
there is partial liability.   
 
 
SECTION EIGHT 
SERVICE PERSONNEL EMPLOYMENT TRIBUNAL CLAIMS 
 
8.1 
In addition to common law claims, DC&L(F&S)Claims also handles claims relating to 
Employment Tribunal ( ET )  applications brought by current or former service personnel. ET 
applications made by the Department’s civilian employees are handled and settled by the 
appropriate Civilian Personnel Management Authority. There is no DC&L(F&S)Claims 
involvement with such claims .Employment Tribunals provide a forum in which most legal 
disputes between employer and employee are resolved.   They are intended to be relatively 
simple and informal without the absolute need for lawyers to represent applicants.. 
 
8.2 
Service personnel have the right to submit complaints to ETs under the Sex 
Discrimination Acts 1975 and 1986, the Race Relations Act 1976 and the Equal Pay Act 1970.    
The regulations, which came into force on 1 October 1997, require personnel first to have 
made a complaint on the same matter under the service redress procedures and for that 
complaint not to have been withdrawn.      
 
8.3 
Claims brought typically involve allegations of unfair dismissal, sexual/racial 
discrimination or sexual/racial harassment. While the single service secretariat branches will 
initially receive and investigate Employment Tribunal applications, they have no delegated 
financial authority to pay such claims which can only be settled by agreement of DC&L(F&S) 
Claims who hold funds centrally.  
 
8.4 
Legal Aid is not available for representation at Tribunals, but some applicants do 
receive financial assistance in bringing their claims from organisations such as the Equal 
Opportunities Commission or the Commission for Racial Equality. The issue of costs is  
different from common law claims. A party cannot normally expect a Tribunal to award costs 
if they win nor will they generally be ordered to pay the other side’s costs if they lose.  A 
Tribunal can exceptionally award costs, if, in its opinion, a party  (Applicant or Respondent ) 
has,  in bringing or conducting the proceedings, acted frivolously, vexatiously, abusively, 
disruptively or otherwise unreasonably. 
 
8.5 
While there are limits in the amount of compensation a Tribunal can award in unfair 
dismissal cases, there is no upper limit in sex, race or disability discrimination cases. Tribunals 
 32

tend to exercise their powers to make higher and higher awards – particularly where the 
Respondent is a large well-funded  organisation, such as the Ministry of Defence. In such 
cases it has been suggested that Tribunals make higher compensation awards because it is felt 
such organisations should have the resources to ensure that internal policies and procedures are 
such that acts of discrimination/harassment do not occur in the first place.             
 
8.6 
It has been reported in the Press recently that research carried out by the Trades Union 
Congress (TUC) suggested that awards for sex discrimination in Employment Tribunals across 
the country have almost doubled in the past year to an average of £17,000.  The TUC also 
pointed out that Unions are  winning or settling more Tribunal cases then ever before with 
total compensation of £14M being awarded.  In addition, the TUC claim that about 95% of 
cases taken up by a trade union are won at Tribunal or settled beforehand by the employer.  
 
8.7 
The following facts and figures give a flavour of the increasingly difficult legal 
environment in which the Department is required to work.             
 
Unfair Dismissal  
 
8.8 
Service Personnel are debarred from bringing unfair dismissal claims against the 
Department.  19 claims were however received in this period and 12 claims were either 
withdrawn by the Applicant or struck out by the ET.   
 
Equal pay  
 
8.9 
During 2000/2001, 10 new claims were received which involved equal pay, 
redundancy or pensions matters. No claims were settled in this period and 1 claim was struck 
out by the ET.         
 
Sex Discrimination  
 
8.10  During 2000/2001, 21new claims were received alleging sexual discrimination, 2 of 
which also involved allegations of sexual harassment.   7 sexual discrimination claims were 
settled during the period at a cost of  £63,500.  8 cases were withdrawn by the applicant or 
struck out by the ET. 
 
Sexual Harassment  
 
8.11  During 2000/2001, 2 new claims were received alleging sexual harassment. 3 sexual 
harassment cases were settled in the period at a cost of £15,000. 3 cases were either withdrawn 
by the applicant or struck out by the ET.  
 33

 
Racial Discrimination  
 
8.12  During 2000/2001, 12 new claims were received alleging racial discrimination of 
which 4 also involved allegations of racial harassment. 6 racial discrimination cases were 
settled during the period at a cost of £47,500. 7 cases were either withdrawn by the applicant 
or struck out by the ET.   
 
Racial Harassment  
 
8.13  During 2000/2001 4 new claims were received alleging racial harassment. 1 racial 
harassment case was settled during the period at a cost of £50,000. No cases were withdrawn 
by the applicant or struck out by the ET.   
 
Homosexuals  
 
8.14  The Ministry of Defence previously operated a policy, which debarred homosexuals 
from serving in the Armed Forces.  The Department’s view was that nothing unlawful was 
done under domestic law, in terms of the Sex Discrimination Act 1975, or under European law 
in terms of the Equal Treatment Directive.      
 
8.15  This policy was challenged in the European Court of Human rights (ECHR) by four 
ex-Service personnel dismissed on the grounds of their homosexuality. On the 27 September 
1999 the ECHR ruled that in relation to these cases, there had been a violation of those 
individuals’ right to respect for their right to private life under Article 8 of the European 
Convention on human rights.  The Court further ruled that two of the applicants also had their 
rights violated under Article 13 – the right to an effective domestic remedy.   
 
8.16  In response to the ECHR ruling, the Secretary of State made an immediate public 
statement, accepting the ruling of the ECHR and suspending the policy of discharging 
personnel on the grounds of  homosexuality.  Following a thorough policy review the 
Secretary of State made an announcement in the Houses of Parliament on12 January 2000, to 
the effect that homosexuality was no longer to be a bar to recruitment or retention in the 
Armed Forces.  
 
8.17 
Meanwhile the ECHR still had to decide what level of compensation to award the four 
ex-Service personnel. Separate submissions to the ECHR were made by both the United 
Kingdom Government and the legal representatives acting for the four applicants.  On 25 July 
2000, after considering all the submissions, the ECHR promulgated its decision.  The 
compensation sums varied from £59,000 to £113,875. Legal costs were also awarded, which is 
normal practice, bringing the total cost to the Department of the four claims to £406,075.  The 
compensation sums awarded were higher then the sums offered by the United Kingdom 
government, but were significantly lower then the sums claimed by the four applicants. Five  
 34

similar cases are currently being considered by the ECHR and a decision on the awards of 
compensation is expected during financial year 2001/2002.   
 
8.18  Following the ECHR decision on 27 September 1999, a decision was taken at 
ministerial level that attempts should be made to settle those claims from ex-service personnel 
who had been discharged as a result of their homosexuality, whose claims were already in 
train before an Employment Tribunal and whose accounts of the events leading up to their 
dismissal were accepted as being substantially factually true.  5 such claims were settled 
during the financial year 2000/2001, and compensation of £79,250 paid. Negotiations are 
continuing in an attempt to reach amicable settlements in the remaining cases. 31 new ET 
applications were received during Financial Year 2000/2001. 
 
SECTION NINE 
INSURANCE AND INDEMNITIES 
 
Insurance 
 
9.1 
Treasury guidelines generally discourage public bodies from insuring risks unless it 
can be shown that the potential costs of claims paid, together with the cost of handling such 
claims, will exceed the cost of purchasing insurance.  As the costs of premiums compared to 
the amounts paid in compensation would normally favour insurance companies, the Ministry 
of Defence self-insures its core activities. 
 
9.2 
DC&L(F&S)Claims takes the policy lead on all Ministry of Defence non-contractual 
insurance issues and encourages units and establishments to transfer risks arising from non-
core activities away from the Department. 
 
9.3 
Willis (Aerospace) provide insurance, which is self-financing, for four specific non-
core aviation risks: 
 
Military aircraft attendance at air displays 
 
Civil Use of Military airfields 
 
Search and Rescue training with civilian organisations 
 
Fare paying passengers on military aircraft 
 
Indemnities 
 
9.4 
DC&L(F&S)Claims is responsible for all non-contractual indemnity matters, ranging 
from issuing indemnities to land owners who are letting the Armed Forces use their land for 
exercises to commenting on different clauses within Defence Estates licenses, indemnity 
provisions within MOUs and other international agreements. 
 35

 
9.5 
The Ministry of Defence always seeks an indemnity against claims arising from 
activities or events that are not considered to be core business, or when activities or events do 
not further the interests of the Department. A frequent example is the Services’ participation in 
charity fund-raising events eg inviting members of the public to take part in assault courses, or 
giving rides to prize-winners in service helicopters. The Ministry of Defence must seek 
indemnity in such instances as there is no provision in the Defence Estimates to meet claims 
which are not Defence related.  Indemnities must be backed by insurance or a guarantee for 
those companies/organisations that self-insure.  The only exceptions to the requirement for 
indemnity are when the Ministry of Defence is dealing with other Government Departments.  
This is because of the principle of indivisibility of the Crown. 
 
9.6 
DC&L(F&S)Claims issued around 155 indemnities in 2000/2001 and commented on a 
similar number of other indemnity issues. 
 
9.7 
Indemnities that arise from the Department’s contractual business are the responsibility 
of the appropriate Commercial Branch, with policy guidance provided by the Defence 
Procurement Agency (Defence Commercial Policy2). 
 
Wider Markets 
 
9.8 
Income-generating activity under the Government’s initiative for Selling Government 
Services into Wider Markets is an exception to the rule that the Ministry of Defence does not 
purchase insurance.  Budget Holders undertaking this work must obtain a full range of relevant 
business insurances.  The cost of the insurance premium should be recovered in the charges 
raised from customers.  The purchasing of insurance is necessary in order to ensure that the 
full cost of undertaking commercial activities is borne by the customer, rather than the 
taxpayer, and that the Ministry of Defence does not have an unfair financial advantage over 
commercial companies which are in competition for the same work. 
 
9.9 
Advice about insurance and risk reduction may be obtained from DC&L(F&S) Claims 
and from the Ministry of Defence’s insurance brokers, Willis Ltd, in accordance with DCI Gen 
254/98.  Willis have created a specialised package of insurance policies offering a full range of 
business insurances for Budget Holders undertaking income-generating activity. 
 
 
SECTION TEN 
NOVEL AND CONTENTIOUS CLAIMS 
 
Electrocution Injuries 
 
10.1  While serving with the Army in Germany, the Claimant was loading vehicles onto 
railway wagons in a marshalling yard, when he was ordered to climb onto the roof of one of 
the wagons to retrieve an oil can that inadvertently had been left there.  While on the roof of 
the wagon he came into contact with a live overhead power cable which he had been assured 
 36

had been made safe.  The resultant electric shock threw him to the ground.  He sustained 60% 
burns to the body, damage to the skull, electrocution cataracts and a leg had to be amputated.  
He suffers tetraplegia and needs 24hrour nursing care  for the rest of his life.  The MOD 
admitted liability and the case was settled for £3,675,000 by way of a Counsel to Counsel 
settlement conference- the highest amount of compensation ever paid by MOD Claims. 
 
Horseplay 
 
10.2 
A former member of HM Forces pursued a claim for compensation through the Civil 
Courts having sustained serious head injuries while serving in the Army, when he fell from the 
tailgate of a moving Army lorry returning to camp from a night out in a local town. The 
claimant was on the tailgate attempting to “windsurf”. Allegations of negligence against the 
Ministry of Defence included that of failure to enforce discipline in the rear of the vehicle, 
failure to give a specific command so as to prevent horseplay, and unnecessarily exposing the 
claimant to risk of injury.   
 
10.3  Following a trial on liability in the Royal Courts of Justice, London. judgement was 
handed down in the Department’s favour. The claimant was, however, granted leave to appeal.  
 
10.4 
The Appeal was heard in the Court of Appeal where the Judges found in favour of the 
claimant but stated that contributory negligence played an important part in this case.  Liability 
was therefore split 75% claimant to 25% MOD. Following subsequent negotiations between 
the two parties, the claim was settled for £75,000 (£225,000 less than the value of the claim 
had it been on the basis of 100% liability).  
 
Head injury 
 
10.5    The Claimant, then serving in the Royal Corps of Transport in Munster Germany, 
suffered serious head injuries when, on 1 May 1988, he fell from a window ledge on the top 
floor of his accommodation block, while cleaning a window in preparation for an inspection.  
He submitted a claim for compensation against MOD alleging that the accident, and 
subsequent injury was the result of MOD negligence. 
 
10.6 
On legal advice MOD accepted liability on a two thirds/one third split in favour of the 
Claimant. However, as neither party had been able to agree on the level of damages payable, 
the case proceeded towards trial where a Judge sitting in the Royal Court of Justice, would rule 
on the matter.  However, the claim was settled on the steps of the Court for £85,000 (£42,500 
less than the value of the claim had it been on the basis of 100% liability). 
  
Smoke inhalation 
 
10.7    The action arises out of a incident off Gibraltar when on 1 December 1987 a missile on 
board HMS Brazen was accidentally discharged causing a fire.  The Claimant, who was then a 
serving member of the Royal Air Force Ordnance Disposal Team in Gibraltar, was ordered to 
attend the incident in order to deal with the missile warhead, which fortunately had not 
detonated. The conditions in which he had to work , without proper breathing apparatus, 
caused him to inhale smoke and fumes leading to the development of asthma. Subsequently he 
 37

made a claim against the Ministry of Defence for compensation, alleging that as a result of his 
asthma he was unable to progress his military career and was obliged to seek lower-paying 
civilian work after his discharge from the Royal Air Force at an earlier time than he would 
otherwise have been discharged.     
 
10.8  The Ministry of Defence accepted liability on legal advice. The case was settled for 
£160,000 following negotiations between the two parties.  
 
Crush Injury 
 
10.9  The Claimant was a volunteer with the RAF Reserve and instructed cadets in glider 
flying.  At the end of a day’s flying while attempting to place the glider trailer onto the tow-bar 
at the rear of a 4 ton truck, he trapped his head between the chassis and trailer when the 
vehicle, which the driver had left in gear, moved back.. The Claimant sustained severe head 
injuries, which included epilepsy, facial paralysis and a total loss of taste and smell.  
 
10.10  Prior to the accident, he worked in the City as a Senior Broker.  However, as a result of 
his injuries he was unable to continue with his job and was eventually made redundant on 
medical grounds. A significant compensation claim totalling £1.2 million was submitted.  
However, the claim was eventually settled for £500,000. 
 
Motor Bike Accident 
 
10.11  The Claimant was a member of a TA motor cycle display team.  During the course of a 
public display he was one of a group whose job it was to lie down in front of a motorbike that 
would mount a ramp and attempt to jump over the group.  Unfortunately, the rider misjudged 
the jump, landing on the Claimant rendering him paraplegic. 
 
10.12  As a result of the accident he was unable to continue with his job as a fitter.  A claim 
against MOD was made alleging that the accident was the result of an 'unsafe system of work', 
and compensation was sought for loss of earnings and future care.  The case was eventually 
settled for £320,000 through negotiation without the issue of legal proceedings. 
 
Gunshot Injury 
 
10.13  The Claimant sustained a serious gunshot injury to his leg when a fellow soldier 
negligently discharged his weapon while on exercise in Kenya, resulting in his medical 
discharge from the Army.   
 
10.14  A claim for future loss of earnings was submitted. The MOD claims handlers instituted 
a rehabilitation programme shortly after his discharge.  He fully engaged in the programme 
and so impressed the rehabilitation company that they offered him a permanent job. This 
enabled a prompt return to the labour market, thereby capping the potential value of the claim. 
 38

 
Accident in Rough Seas 
 
10.15  The Claimant, a submariner, submitted a compensation claim against MOD alleging 
that he suffered personal injury as a result of the submarine, of which he was a crew member, 
being struck by a large wave during a surface patrol. His solicitors argued that the MOD had 
breached its duty of care as the surface patrol was too dangerous given the rough sea 
conditions.  Enquiries by the MOD claims handlers established that he was provided with 
adequate personal protective equipment including waterproofs and a harness.  Moreover, while 
the boat surfaced during rough seas the force of the storm did not exceed the maximum 
possible permitted guidelines for surface patrol. 
 
10.16  Consequently, the claim was repudiated and subsequently withdrawn without recourse 
to legal proceedings.       
 
MacDonald -v- MOD    (Homosexual Dismissal)   
 
10.17  Mr MacDonald was a serving Flight Lieutenant, whose resignation from the RAF was 
compulsorily effected in 1997 because of his voluntary declaration of homosexuality. He lost a 
claim at a full hearing at an Employment Tribunal (ET) that he had been discriminated against 
unlawfully on grounds of sex, contrary to the Equal Treatments Directive 76/207/EEC and 
section 6 of the Sex Discrimination Act 1976. However, following the ruling by the ET, Mr 
MacDonald was granted leave to take his case to the Employment Appeals Tribunal (EAT).  
 
10.18  Mr MacDonald’s EAT hearing took place in Edinburgh on 19 September 2000 before 
His Lordship Lord Johnstone, a Judge of the Court of Session. A decision was given on 25 
September 2000 that the EAT found in favour of Mr MacDonald in respect of his claim that he 
had been discriminated against unlawfully on grounds of sex, contrary to the Equal Treatments 
Directive 76/207/EEC and section 6 of the Sex Discrimination Act 1976. The EAT overturned 
the original judgement of the Employment Tribunal (ET) and gave a radical interpretation of 
the Sex Discrimination Act, which appeared to run contrary to the European Court of Justice’s 
previous judgements.  
 
10.19  The judgement of the EAT was radical in that it overturned the previously accepted 
interpretation of the Sex Discrimination Act 1975: it found that the word “sex” should be 
interpreted to include not just gender but also sexual orientation.  At a meeting in October 
2000 with legal advisers from a number of government departments, it was agreed that the 
decision of the EAT should not go unchallenged, as it would have wide implications, far 
beyond those relating to the termination of the service of members of the armed forces on the 
grounds of homosexuality.  In particular, in widening the scope of liability under the Sex 
Discrimination Act, the EAT’s decision could give rise to claims under that Act against private 
employers as well as those bodies providing education and those providing goods, facilities 
and services in the commercial sector.  Moreover, such a decision, if it remained unchallenged, 
would also extend the scope of liability in respect of claims for indirect sex discrimination. 
 
 39

10.20  Although the appeal was lodged in January the judgment was not handed down until 1 
June.  The Inner Court of the Court of Session (equivalent to the Court of Appeal in England 
and Wales) ruled in favour of the Ministry of Defence and ordered that the decision of the 
Employment Tribunal be restored. 
 
Sex Harassment /Victimisation        
 
10.21  An Employment Tribunal application was made by an Acting Sgt (Male) who claimed 
that he was sexually harassed by his female superior Officer (Sgt.) during a period when they 
worked together. He claimed that he was subjected to both verbal and physical harassment 
from the female Sgt who it was claimed admitted she wanted to have a sexual relationship 
with him.  Furthermore he claimed that when he rejected her advances their working 
relationship deteriorated and he was, against his wishes, posted away from the unit.     
 
10.22  The Army’s Equal Opportunities Investigation Team investigated these matters and 
concluded that there was independent evidence to confirm the version of events made by the 
Acting Sgt.   The female Sgt readily admitted to harassment during interview but claimed she 
was confused as she was taking the anti-depressant drug Prozac at the time and this effected 
her judgement.  There was no evidence however that the Acting Sgt’s posting away from the 
unit was for any reason other then poor performance. 
 
10.23  An amicable settlement of £2000 was arranged with the Acting Sgt prior to a full 
Tribunal hearing in December 2000.  
 
Racial Discrimination       
 
10.24  An Employment Tribunal application was made by an RAF Sqn Ldr, a serving Medical 
Officer,  (of ethnic origin) who claims that he had been discriminated against, in that he was 
not considered for specialist registrar training, and the failure to allow his appeal against this 
decision.  The applicant also alleged that he had been racially harassed by a colleague making 
racially derogatory comments.   The outcome of the applicant’s redress of complaint upheld 
the racial harassment element allegations, but the major complaint over the specialist training 
was not upheld. 
 
10.25  Legal advice, obtained from Counsel, suggested that despite the findings of the internal 
investigations into the applicant’s complaints the Department had only a 40% chance of 
successfully defending this case at the 6 day ET hearing.   Employment Tribunals recognise 
that racial discrimination is rarely blatantly carried out and that where it is apparent that 
individuals of an ethic minority have been disadvantaged in comparison with their white 
colleagues inferences of racial discrimination can be, and are often, made.   It was decided that 
in the circumstances that the Department should seek an amicable settlement of this claim, 
prior to the ET hearing – on a strict without admission of liability basis.    
 
 40

10.26  The applicant originally sought the sum of £3 million by way of compensation, but 
eventually informed the Department that he would accept £30,000 in settlement. The 
Department offered the sum of £6,000 which was accepted.   
 
Racial Discrimination  
 
10.27  An Employment Tribunal application was made by a former member of the Jamaican 
Defence Force  who alleged that he had been subjected to racial discrimination by members of 
the staff at the Royal Military Academy, Sandhurst (RMAS)  while undergoing training there 
as an Officer Cadet in 1998. The allegations included, verbal abuse, victimisation, and being 
wrongfully accused of theft. He was discharged early from RMAS on 5 November 1998.  
 
10.28  The Army’s Equal Opportunities Investigation Team investigated thoroughly the 
complaints made, but found no evidence to support the contention made by the applicant that 
he had been discriminated against because of his race.      
 
10.29  The applicant failed to bring his case within the statutory time limits and the 
Department argued that the Tribunal had no jurisdiction to hear this case.  This issue was 
resolved at a preliminary hearing before London South ET on 13 November 2000. The 
Tribunal agreed with the Department and unanimously dismissed this case on the jurisdiction 
point.   
 
Clinical Negligence     
 
10.30  The Claimant joined the Army in August 1996.  He reported to his training 
establishment to commence fitness training. During basic training he developed pain in his 
groin and left thigh and as a result was unable to complete his Basic Fitness Test. A medical 
examination took place and he was prescribed a painkiller and physiotherapy. The pain got 
worse and at a subsequent medical examination he was given crutches and sent home on sick 
leave. At home he suffered a fall down some stairs and was taken to hospital where a medical 
examination found that he had originally suffered a stress fracture to the neck of his femur 
(thigh bone) which had displaced as a result of his fall at home. As a result of these injuries the 
Claimant was discharged from the Army.  
 
10.31  The allegations of clinical negligence surrounded the alleged negligent medical 
treatment he was initially given, i.e. the failure to take an X ray of his leg and properly 
diagnose his condition, and to send him home when it was quite unsafe to do so. Independent 
clinical advice was obtained and the advice of Counsel. It was felt that the Department would 
be found liable should this claim go to court. Consequently an amicable out of court settlement 
was negotiated with his solicitors.  His legal advisers originally claimed £308,000 in 
compensation, a significant proportion to cover future loss of earnings. This was opposed and 
the claim was eventually settled for the sum of £95,000 in January 2001.        
  
 41

Clinical Negligence    
 
10.32  The Claimant, the wife of a serviceman, underwent a hip replacement operation in 
August 1984.  She claimed that the surgery, carried out by Service doctors, was performed 
negligently in relation to the manner of insertion of the prosthesis into the femur which caused 
her ongoing pain and suffering. There are also allegations concerning the failure to advise and 
counsel her about the outcome of the operation and to discuss with her the option of re-
operation of the hip. This claim was first intimated in 1989.  Numerous medical and care 
reports were sought and the legal advice received was clear that liability should be conceded.     
However the Department argued strongly that she had failed to mitigate her pain and suffering 
by not having a further operation to correct the failures of the original operation.   The 
Claimant’s solicitors put forward an offer to settle the claim in the sum of £395,000. The claim 
was settled amicably in January 2001 for £300,000.        
 
Clinical Negligence     
 
10.33  The Claimant suffered from the condition of osteoid osteoma in his right shin. In 
November 1993 he was seen by a Service clinician who eventually carried out an operation on 
the leg in January 1994. Unfortunately the procedure (a 13.5 en bloc bone resection) used by 
the clinician did not resolve the problem and the leg became infected which resulted in a 
below knee amputation. The Claimant was medically discharged from the Army and since that 
time has suffered serious drug abuse problems and depressive illness.  
 
10.34  The allegations of clinical negligence focused on the actions of the Service clinician 
and the operation he performed. Independent medical opinion was that the operation had been 
carried out negligently. In fact serious questions were raised as to why the clinician even 
attempted to carry out this type of surgery, which was described by medical experts as 
“extremely aggressive”. Liability was conceded.  The Department did however highlight the 
fact that he was a heavy smoker and this may have had an adverse effect on matters. This 
claim was amicably settled in February 2001 for £490,000. 
 
Exaggerated Claim 
 
10.35  Following an alleged accident in the course of his employment, the Claimant issued 
proceedings against MOD and served a schedule of loss valuing his claim in excess of 
£100,000.  In an attempt to further promote his claim, he advised a local newspaper of his 
case.  The local paper obliged with a double page spread including a large colour photograph 
of the Claimant posing with his crutches.  It later transpired that the crutches were for 
"decoration purposes only".  The claim was forcefully repudiated . The Claimant  withdrew his 
claim, incurring liability for his own solicitor’s costs.   
 
Visiting Forces Claim 
 
10.36  The Claimant brought a claim against the United States of America following a RTA  
when the Claimant’s vehicle was struck head on by a US Government owned vehicle 
 42

attempting to overtake a parked vehicle.  The Claims Public Liability Group adjudicated the 
claim under the terms of NATO SOFA. The claimant, a scientist, suffered severe injuries 
which resulted in his temporary paralysis and short term memory loss. The claimant’s 
predicament was exacerbated by the fact that he had just completed a dissertation which, 
during the crash, was scattered to the four winds. The claim was settled at £667,000 with a 
large proportion covering care costs and future loss of earnings. 
 
 
 43

 
 
 
 
 
 
 
 
 
 
 
ANNEX A 
 
DC&L(F&S)Claims - Organisation 
 
Chief Claims Officer Grade B1 
 
Senior Claims Officer Grade C1 
 
Policy & Finance Group (formerly Claims 1) 
 
Staff 
 
 
Team Leader – Band C2 
 
Budget Manager – Band D 
 
Indemnities & Insurance Adviser – Band D 
 
Assistant Adviser Indemnities & Insurance – Band E1 
 
Policy & Contracts Adviser – Band D 
 
Budget Officer – Band E1 
 
Payments Co-ordinator – Band E2 
 
Focal Point Manager – Band E1 
 
2 Focal Point Administrators – Band E2 
 
Responsibilities 

 
 
 
Financial Management 
Budget management and financial planning for DC&L(F&S) and the financial management of 
C&L(F&S)Claims. 
 
 
Non-contractual insurance 
Non-contractual insurance (principally non-core aviation risks), including liaison with 
Ministry of Defence’s insurance brokers, indemnities and the claims aspects of MOUs. 
 
MOD Civilian employees employer's liability and third party motor claims 
Policy relating to Ministry of Defence civilian employees employer's liability claims and Third 
Party motor claims handled on behalf of the Ministry of Defence by AXA Corporate Solution 
Services Ltd. 
 
 
Regulational claims policy 
Regulational claims are received from employees for loss of or damage to personal property in 
the course of their employment.   The Policy & Finance Group 1 is responsible for the claims 
handling policy. 
 
 DC&L(F&S)Claims 
administration 
 
Claims co-ordination and Focal Point (i.e. Registry functions). 
 44

 
 
Service Personnel Employer’s Liability Group (formerly Claims 2) 
 
 
Staff 
 
 
  Team 
Leader 
– 
Band 
C2 
 
 
4 Case Managers – Band D 
 
 
1 Section Administrator – Band E2 
 
 
Responsibilities 
 

 
Service personnel employer's liability claims 
Handling of Service personnel and ex-Service personnel employer's liability claims received 
before 1 July 1996 and managing the contract with Royal and Sun Alliance who have dealt 
with this type of claim since 1 July 1996. 
 
 
Section 10 claims 
Claims from members of the Armed Forces barred by Section 10 of the Crown Proceedings 
Act 1947. 
 
 
Radiation claims 
Claims for compensation due to illness alleged to have been caused by exposure to radiation. 
 
  
Gulf War illness 
Potential claims for alleged Gulf War illness. 
 
Post Traumatic Stress Disorder  
Claims from Service and ex-Service personnel alleging failure of the MOD to recognise, 
diagnose and treat their PTSD. 
 
 
Miscellaneous claims 
Miscellaneous claims from Service and ex-Service personnel including defective enlistment, 
false prosecution, unlawful detention. 
 
 
Public Liability Group (formerly Claims 3) 
 
Staff 
 
 
Team Leader – Band C2 
 
5 Case Managers – Band D 
 
4 Assistant Case Managers – Band E1 
 
 45

Responsibilities  
 

 
Public liability claims 
Public liability claims, including personal injury, and property damage.  
 
 
Visiting Forces 
Claims against visiting forces in the UK (under Section 9 of the Visiting Forces Act 1952 and 
Article VIII of the NATO Status of Forces Agreement). 
 
 
Low flying 
Claims relating to military low flying activity in England, Scotland and Wales. 
 
Northern Ireland claims 
Politically sensitive claims from members of the public arising from the activities of the 
Armed Forces in Northern Ireland. These range from unlawful detention to shootings. 
 
 
Maritime claims 
Maritime claims including accidents, salvage, collisions and damage to fishing gear. 
 
 
Vehicle claims 
Privately owned vehicle damage claims. 
  
 
Overseas operations 
Claims policy relating to overseas operations and advice to Area Claims Officers in Northern 
Ireland and overseas. 
 
Ex-gratia payments 
Responsible for ex-gratia payments, including the DERA/INM no-fault compensation 
schemes. 
 
 
Criminal injuries compensation 
Responsible for criminal injuries compensation claims from MOD Civil Servants’ dependants 
based overseas. 
 
 
Non-maritime recoveries 
Recovery of MOD's uninsured financial losses, excluding those arising from traffic accidents 
in the UK. 
 46

 
Clinical Negligence/Employment Tribunals Group (formerly Claims 4) 
 
Staff 
 
 
Team Leader – Band C2 
 
3 Case Managers – Band D 
 
2 Assistant Case Managers – Band E1 
 
Responsibilities  
 
Clinical Negligence
 
Claims for compensation where it is alleged that MOD has acted negligently.  
 
Employment Tribunals  
Co-ordination of the MOD's response to claims put to Employment Tribunals by current and 
former Service personnel. 
 
 
Risk Management Group 
 
 Staff 
 
 

 
Team Leader – Band C2 
 
 
1 Risk Policy Adviser – Band D 
 
 
1 RISK & IT Manager – Band D 
 
 
1 Assistant Adviser Risk & IT  - Band E1 
 
 Risk 

Management 
Development and implementation of a Risk Management strategy to identify the 
circumstances which give rise to claims for compensation and devise ways of reducing the 
causes of incidents. Secretariat to the Claims Risk Management Working Group. Risk 
management statistics. Claims and risk presentations 
 
 
Information technology systems 
DC&L(F&S)Claims information technology (IT) systems (CHOTS, RM database, TAURUS 
III, CHASP and TAURUS 2000). 
 
 
 47

 
DC&L(F&S)CLAIMS STAFF, PROGRAMME AND OPERATING COSTS - 
FINANCIAL YEAR 2000/2001 
 
 
Costs 
 
 
 

Operating Costs  

£0.97 million 
 
 
 
Programme Costs 

£87.53 million (compensation, legal costs, experts’ fees, 
 
 
 
 
 
etc.) 
 
 
Total Costs 
 

£88.5 million 
 
 
 
DC&L(F&S) staffing as at 31 March 2001 
 
GRADE ESTABLISHED 
POSTS 
ROLE 
B1 

Chief Claims Officer 
 
C1 

 Senior Claims Officer 
    
C2 5 
Team 
Leaders 
 

17 
12 Claims Managers 
1 Budget Manager 
1 Policy & Contracts Adviser 
1 Insurance and Indemnities Adviser 
1 Risk Policy Adviser 
1 Risk & IT Manager 
 
E1 
11 
7 Assistant Claims Managers 
1 Asst Adviser Risk & IT 
1 Budget Officer 
1 Asst Adviser Indemnities & Insurance 
1 Focal Point Leader  
 
    E2 

1 Payments Co-ordinator 
1 Administrator Service Personnel Claims 
2 Focal Point Administrators 
 
 
 48

ANNEX B 
 
 

TOP TWENTY CASES (BY VALUE) SETTLED BY DC&L(F&S)CLAIMS IN 
FINANCIAL YEAR 2000/2001 
 
“A lawyer with his briefcase can steal more than a thousand men with guns” 
 
CLAIMANT TYPE 
OF 
INJURY/LOSS 
COMPENSATION 
 
 
 
ARMY 
Received electric shock and left 
£3,650,000.00 
quadraplegic 
ROYAL NAVY 
Negligent treatment of cancer  
£1,950,000.00 
CIVILIAN (child) 
Negligent treatment of Downs Syndrome 
£1,650,000.00 
child. 
ROYAL NAVY 
Claimant left paraplegic when fell from the 
£1,408,771.63 
top of a mast 
ARMY 
Abseiling incident left claimant tetraplegic 
£1,215,715.05 
ARMY 
Claimant received electric shock after 
£978,250.00 
banging head on cable 
CIVILIAN 
Driver of a vehicle hit head on by a U.S. 
£667,422.00 
military vehicle. Injuries led to loss of 
qualification and employment opportunity. 
ARMY 
Shot in leg, leading to amputation 
£639,957.27 
ARMY 
Fatality, due to helicopter collision. 
£575,000.00 
ARMY 
Suffered head injuries when jumping from a  £502,158.91 
vehicle which experienced brake failure. 
CIVILIAN 
Operation on right arm that caused claimant  £490,000.00 
to lose the use of the arm.  
ARMY 
Negligent treatment of bone tumour leading 
£490,000.00 
to Deep Vein Thrombosis (DVT) 
CIVILIAN 
Negligent treatment of Diabetes resulting in 
£480,000.00 
impaired vision. 
ROYAL AIR FORCE 
Fatality in Hercules crash 
£475,000.00 
ARMY 
Fatality in helicopter crash 
£475,000.00 
ARMY 
Negligent treatment of a rectal fissure 
£470,000.00 
ARMY 
Injured in a Road Traffic Accident 
£395,508.50 
ARMY 
Claimant sustained chest injury 
£387,000.00 
ARMY 
Negligent treatment of warts 
£382,999.42 
ARMY 
Frostbite to feet in Canada, Inadequate 
£377,348.15 
protection provided. 
  
 
 49

 
ANNEX C 
 
TOP TEN (BY VALUE) SERVICE PERSONNEL EMPLOYER’S LIABILITY 
CLAIMS SETTLED BY ROYAL AND SUN ALLIANCE IN FINANCIAL YEAR 
2000/2001 
 
TYPE OF INJURY/LOSS 
COMPENSATION 
 
 
Struck by motor vehicle while on march 
£1,360,000 
 
 
 
Serious back injury following RTA 
£1,325,000 
 
 
 
Injured following aircraft collision 
£776,130 
 
 
 
Fell from cliff face 
£650,000 
 
 
 
Disease from solvent exposure 
£545,880 
 
 
 
Injured back as a result of slipping on oil 
£541,346 
 
 
 
Serious head injury as a result of being crushed  
£529,109 
 
 
 
Killed following aircraft crash 
£505,651 
 
 
 
Injured following aircraft crash 
£480,500 
 
 
 
Injured in RTA 
£420,000 
 
 
 
 50

ANNEX D 
 
 

TOP TEN (BY VALUE) CIVILIAN EMPLOYEE EMPLOYER’S LIABILITY CLAIMS 
SETTLED BY AXA GLOBAL RISKS IN FINANCIAL YEAR 2000/2001 
 
TYPE OF INJURY/LOSS 
COMPENSATION 
 
 
Serious multiple injuries 
£423,868 
 
 
 
Severe injury to right forearm 
£308,463 
 
 
 
Asbestos related - Mesothelioma 
£261,482 
 
 
 
Fractured skull 
£224,565 
 
 
 
Very serious injuries to left leg and right forearm 
£202,878 
 
 
 
Asbestos Related – Mesothelioma 
£181,144 
 
 
 
Serious knee injury 
£175,863 
 
 
 
Injury to wrist 
£172,140 
 
 
 
Asbestos Related – Mesthelioma 
£162,223 
 
 
 
Back injury 
£161,014 
 
 51

DC&L(F&S)CLAIMS ANNUAL REPORT 2000/2001 
PART TWO - LAW AND PRACTICE 
SECTION ONE – CIVIL JUSTICE REFORMS 
 
This part of the Annual report deals with civil law and practice.  It includes a brief summary of 
the 1999 Civil Justice Reforms.  Although these reforms have been in place for some time 
now, we believe it is important to recapitulate the main aims and procedures, to serve both as a 
reminder for regular readers of these reports and as a simple digest for those unfamiliar with 
the subject. 
  
Civil Justice Procedures 
 
The greatest upheaval ever in the Civil Litigation process occurred when the New Civil 
Procedure Rules were introduced on 26 April 1999. The Rules, which replaced the existing 
High Court and County Court Rules, have significantly changed the way common law claims 
are handled, in an attempt to speed up, simplify and make the whole process less expensive. 
The Rules, which include pre-action protocols, govern the conduct of litigation and encourage 
the appointment of a single expert to provide an independent opinion. 
 
The overriding objective of the rules is to enable the court to deal with cases justly in ways 
which are proportionate to the amount of money involved, the importance and complexity of 
the case, and to the parties’ financial position.  
 
Aims 
 
•  Litigation will be avoided wherever possible 
 
•  Litigation will be less adversarial and more co-operative 
 
•  Litigation will be less complex 
 
•  The timescale of litigation will be shorter and more certain 
 
•  Parties will be on a more equal footing 
 
•  There will be clear lines of judicial and administrative responsibility for the civil justice 
system 
 
•  The structure of the courts and the deployment of judges will be designed to meet the 
needs of litigants 
 
•  Judges will be employed effectively so that they can manage litigation in accordance with 
the new rules and protocols 
 
 52

•  The civil courts system will be responsive to the needs of litigants   
 
In keeping with the reforms the Courts have continued to take a pro-active approach to case 
management setting down directions which decide the order in which issues are to be resolved 
and fix timetables to control the progress of the case. In addition, they encourage the parties to 
co-operate and consider adopting other methods of settlement such as alternative dispute 
resolution.  
 
Proportionality plays an important part in the new system and the courts will consider whether 
the potential benefit of taking a particular step justifies the cost. 
 
Experts 
 
In the majority of cases a single expert will be instructed and evidence, assuming the case 
proceeds to court, will normally be in the form of a written report. The Defendant and 
Claimant may submit written questions to the expert and both sides will see the expert’s 
response. If the parties to an action cannot agree upon an expert witness they may instruct their 
own choice of expert but, if the court decided that either party has acted unreasonably, they 
will not be able to recover the costs of obtaining the expert report. 
 
Pre Action Protocol 
 
Lord Woolf in his final ‘Access to Justice’ report of July 1996 recommended the development 
of pre-action protocols: “To build on and increase the benefits of early but informed settlement 
that genuinely satisfy both parties to dispute.” The Lord Chancellor strengthened this message 
in the Foreword of the New Civil Procedures Rules when he stated “We must not forget, 
however, that we should see litigation as the last resort and not the first resort in the attempt to 
settle the dispute”.  
 
A number of pre-action protocols, including ones for personal injury cases and clinical 
negligence, have now been published. Eventually all types of litigation will be categorised 
and, if appropriate, pre-action protocols developed. 
 
The aims of the pre-action protocol are to promote more pre-action contact between the 
parties, better exchange of information, better pre-action investigation and thereby to put the 
parties in a position to settle cases fairly and early, reducing the need for litigation.    
 
If defendants are unable to comply with the pre-action protocols the courts will have the power 
to impose sanctions due to non-compliance when proceedings are commenced.  Sanctions will 
likely include a refusal to grant further extensions of time for serving a defence or evidence 
and costs penalties. 
 53

 
Fast-Track and Multi-Track 
 
Personal injury claims will be assigned to either a fast-track or multi-track. 
 
Fast-track cases will be limited to a value up to £15,000 and will proceed to a hearing quickly. 
There will be an automatic timetable for compliance with the various stages of the litigation. 
The hearings are designed to be relatively short and in the majority of fast-track cases written 
evidence only from a single expert will be accepted. 
 
Multi-track cases will generally involve claims with a value in excess of £15,000 or which 
feature complex issues. Case management by the courts will play an important part in setting 
the timescales for certain stages of the case and defendants may possibly be required to attend 
a case conference before a judge, when decisions will be made as to the future conduct of the 
claim. 
 
The personal injury pre-action protocol (primarily designed for cases with a value of less than 
£15,000) sets out the following stages: 
 
Letter of claim 
 
The letter of claim will contain a clear summary of the facts on which the claim is based, 
including allegations of negligence, and will include details of any injuries suffered or 
financial losses incurred.  
 
Defendant’s reply 
 
The defendant should acknowledge within 21 calendar days of the date of posting of the letter 
of claim in Personal Injury cases and 14 calendar days in Clinical Negligence cases. 
 
Claim investigation 
 
The defendant will have a maximum of three months from the date of acknowledgement of the 
claim to investigate.  No later than at the end of that period the defendant must inform the 
Claimant or their legal representative whether liability is admitted in full, denied or there is a 
partial admission.  If the defendant denies liability they should enclose with the letter of reply 
documents which are material to the issues between the parties, and which would be likely to 
be ordered to be disclosed by the court. If a defendant is unable to comply with the 
requirements of the pre-action protocol, the Claimant will be able to issue proceedings at the 
end of the three-month period. 
 
 54

If the defendant makes a proper denial of liability giving the detailed explanation and 
documents required under the protocol, many cases will proceed no further. In such cases it 
will be for the Claimant to make a decision whether to proceed with the case. 
 
Defendants will no longer be able to delay making a decision as to whether to settle or fight 
and they will no longer be able to make a simple blanket denial of liability without giving 
reasons. 
 
Proceedings  
 
There will be a strict timetable for dealing with the Defence. In the majority of cases the time 
limit will be 28 days after proceedings are served. One extension of time may be granted, 
although in circumstances where the defendant has failed to comply with the pre-action 
protocol, it is very unlikely that any extension will be given. 
 
The Defence must also fulfil new requirements under the rules. The new requirements are as 
follows: 
 
•  the Defence must state which facts are admitted; 
 
•  the Defence must state which facts are denied and provide supporting documentary 
evidence; 
 
•  the Defence must state the defendant’s own version of events; and  
 
•  the Defence must identify which facts the defendant is unable to admit or deny and which 
the Claimant is required to prove. 
 
Statement of Truth 
 
Under the new rules a statement of truth must verify the Defence.  The form of the statement is 
as follows: 
 
“The defendant believes that the facts stated in this defence are true.” 
 
The statement is not sworn, but must be signed by: 
 
•  a senior officer of the company, corporation or organisation; 
 
•  a partner in control of a business; or 
 
•  a legal representative. 
 
 55

The person signing the statement of truth must identify his or her office or position in the 
organisation.  It follows that the person signing must have authority to sign on behalf of the 
organisation.  If a legal representative signs, he or she is deemed to have explained the 
consequences to the defendant and the penalties are the same as if the defendant had signed. 
 
A person who signs without honest belief in the truth of the Defence is guilty of contempt of 
court.  In an extreme case this could result in a fine or even a prison sentence for the person 
who approved the contents of the Defence and authorised its signature. 
 
It follows that in future solicitors will always ask the defendant either to sign the Defence or to 
approve the contents of the Defence before signing on the defendant’s behalf. 
 
If the Defence is not signed the court will strike it out and the defendant will lose his or her 
opportunity to defend the claim. 
 
Bearing in mind the tight time schedules, the Department will need to be in a position to deal 
with the Defence quickly. In the case of Claims against the Ministry of Defence the 
appropriate persons to sign the Statement of Truth or verify the Defence will be the Chief 
Claims Officer or the Senior Claims Officer. 
 
Disclosure  
 
The new Civil Procedure Rules specify the type of documents which the defendant must 
disclose and set time limits for doing so. Many of these documents will have been disclosed 
under the pre-action protocol: i.e. within the initial three-month period for investigation. 
 
Under the new rule, standard documents to be disclosed include: 
 
•  all documents which could adversely affect the case;  
 
•  all documents which could adversely affect the other side’s case; and 
 
•  all documents which could support the other party’s case. 
 
A defendant is required to make a reasonable search for documents depending on: 
 
•  the significance of the document; 
 
•  the number of documents; 
 
•  the complexity of the case; and  
 
•  the ease and expense of retrieval. 
 56

 
Disclosure Statement 
 
The list of documents which is sent to the other side will include a disclosure statement 
containing the following information: 
 
•  the identity of the person making the statement; 
 
•  the extent of the search that has been made to trace documents; 
 
•  why the person signing the statement is the appropriate person; 
 
•  confirmation that he or she understands the duty to disclose; and 
 
•  confirmation that that duty has been carried out to the best of his or her ability. 
 
There will clearly be an onus on the defendant to make sure that the documents can be 
obtained quickly and that they are up-to-date. The person who signs the disclosure statement 
or who authorises the solicitor to sign it on the defendant’s behalf, must understand his or her 
duty and have the appropriate authority within the organisation. 
 
Way Forward
 
 
The implementation of the reforms involved a massive change in working practices. At the 
outset, and indeed some time before the changes took place, Claims officials undertook 
additional specialist training to ensure they would comply with the new rules.  Updating and 
refresher courses and workshops have been undertaken during the last year.  The acquisition of 
new and specialist skills has been recognised by the introduction of the Claims & Legal 
Functional Competence Framework.    
 
Units and Establishments have also become aware of how the new protocols and rules operate. 
Claims officials will continue to work closely with and remind Units and Establishments of 
their duties to co-operate in supplying information and assisting in defence of claims.  
 
Accidents must be reported promptly and accurately with improvements made to document 
handling and availability. 
 
Witnesses must be identified and made available for interview early in the claims process.  
Similarly, defendants will need to be able to identify and find relevant documents. 
 
 The courts will not be sympathetic to the Department arguing that there has been insufficient 
time to investigate a claim. Neither will the courts deem the Department to be a special case 
because of its size, widespread locations or deployment of key witnesses overseas.  
 57

 
Legal Aid 
 
It is over fifty years since the Legal Aid and Advice Act was enacted. For the first time, it gave 
access to justice to a range of people who beforehand could not afford to bring a case in 
criminal or civil law. Eligibility for legal aid depended on the applicant’s disposable income 
and capital but anecdotal evidence is plentiful about how legal aid is wrongly or rightly 
distributed and it therefore came as no surprise that Legal Aid for personal injury claims was 
abolished in April 2000. The majority of such claims are now likely to be the subject of a 
conditional fee whereby a Claimant’s solicitor can uplift his normal charging rate by 100% if 
successful (providing the success fee does not exceed more than 25% of the total 
compensation). 
 
Conditional fees can cause problems for Claims officials when trying to estimate the legal 
costs element of settling a claim. One method of overcoming this problem is to ask the 
Claimant’s solicitor to clarify the basis of funding the costs together with an indication of the 
success fee agreed. However, as the Rules stand, solicitors are not obliged to provide this 
information to the Defendant and to do so might give an indication of the strength of their 
client’s case. In many cases, therefore, the level of the success fee will not be known until after 
the case has settled. 
 
 In these cases there will be a far greater opportunity to recover our legal costs because as part 
of the conditional fee arrangements a claimant will likely take out insurance to protect against 
the risk of losing the action and to provide an indemnity for the defendant’s legal costs.  It will 
therefore be our practice, and the practice of our commercial claims handlers, to pursue 
claimants with conditional fee arrangements for our costs in the event that we are successful in 
defence of the claim 
 
 
 
 
 
PART TWO SECTION TWO 
ALTERNATIVE DISPUTE RESOLUTION AND COUNSEL TO COUNSEL 
CONFERENCES 
 
Alternative Dispute Resolution/mediation is considered in cases where there is some evidence 
to support a claim of negligence.  In cases where there is currently no evidence it is not 
deemed appropriate. 
 
In cases where liability is not an issue, counsel to counsel settlement conferences are an 
innovative and financially attractive way of settling cases without going to trial or settling at 
the court room door. A round table consultation is arranged with the Department represented 
by counsel, the Chief Claims Officer or Senior Claims Officer and Treasury Solicitor. This 
method of negotiated settlement has had a significant effect on the way claims are handled due 
to the Claimant and defendant showing an element of goodwill combined with a realistic 
approach. This has demonstrated that it is possible to agree a settlement without recourse to 
 58

the courts. An added benefit is that the Claimant does not need to undergo the trauma of a 
court case to secure compensation for an injury or loss caused by the Department’s negligence. 
 
In 2000/2001, for example, 9 such conferences were held and compensation totalling £7.5M 
was agreed against claims totalling £12.03M Had these cases run to court, the legal costs 
payable by the Ministry of Defence would have been significantly higher.  
 
PART TWO SECTION THREE 
THIRD PARTY ACCIDENT SCHEME (ToPaS) 
 
If MOD civil servants or Service personnel are injured by a third party while on duty it is the 
individual's own responsibility to pursue a claim for compensation without any assistance or 
involvement by the Department.  The only exception to this has been that civil servants injured 
in road traffic accidents can have their legal costs underwritten by their TLB. This 
arrangement does not, however, apply to Service personnel or to civil servants injured in other 
circumstances. This position has long been a cause of considerable dissatisfaction to staff and 
led to heated correspondence about it in Paperclips in late 1998.  
 
Although, on the face of it the policy seems harsh, it is consistent with the approach adopted 
by many large private sector companies. The reason why MOD cannot support staff in such 
circumstances is that MOD, in common with all other government departments, may only pay 
compensation, or become involved in pursuing claims, where it has a legal liability to do so.  
Any other policy would involve the misuse of public funds and the making of subjective 
judgements which could give rise to inequitable treatment of claimants. Under common law 
MOD has no standing or vicarious liability in these cases and it does not have the authority to 
pay compensation to such claimants nor to fund the cost of legal action on their behalf.    
 
In order to relieve concerns expressed by MOD staff (both Service and civilian), the Third 
Party Accident Scheme -ToPaS - was devised to provide legal assistance to staff in the UK on 
a conditional fee basis (so-called no win, no fee).  The scheme is operated by Betesh Fox & 
Company, a firm of solicitors which specialises in personal injury claims. 
  
In the event of injury caused by a third party while on duty, be it a road traffic accident, 
assault, or any other form of accident, MOD staff (Service or civilian) will be able to contact 
the solicitors direct and obtain immediate advice and assistance free of charge. All legal costs 
will be reclaimed as part of the compensation awarded by the insurance company or, in the 
event that the matter proceeds to trial, by the courts. If the action is unsuccessful there will be 
no charge to the MOD or the individual concerned.  
 
The proposal was subject to formal consultation and has the support of the industrial and non-
industrial trade unions. Details of the scheme were published in a DCI Gen 273/00.  A wide 
ranging publicity campaign, including an eye catching poster for general distribution, has been 
mounted and a number of presentations have been given at key MOD sites. 
 
 59

Anyone wishing to use the scheme should contact Betesh Fox & Co on 0161 832 6131. E-mail 
xxxxx@xxxxxxxxx.xx.xx  Website: www.beteshfox.co.uk 
 
PART TWO SECTION FOUR 
HUMAN RIGHTS ACT and SECTION OF THE CROWN PROCEEDINGS ACT 1947 
 
Many commentators believed that the enactment of the Human Rights Act would lead to an 
increase of claims generally by virtue of the ‘right to a fair trial’.  In particular, in the Ministry 
of Defence, it was considered likely that claimants would use the Act to challenge Section 10 
of the Crown Proceedings Act 1947. 
 
Some solicitors representing former Service personnel barred by Section 10 of the Crown 
Proceedings Act 1947 from pursuing common law claims against MOD have argued that a 
Section 10 defence is an infringement of their clients Human Rights.  The Department's 
position on this matter is that although the Human Rights Act 1998 incorporates the European 
Convention on Human Rights into domestic law, it does not give rise to any new rights under 
the Convention.   
 
Article 6.1 of the Convention provides that everyone is entitled to a fair hearing in the 
determination of his civil rights.  It does not, however, define what constitutes a civil right.  
That is a matter, according to the case law of the European Court of Human Rights, to be 
decided by domestic legislatures and courts.  Section 10 of the Crown Proceedings Act 1947 
therefore remains compatible with the European Convention on Human Rights.  
 
 
 
 60

C&L(F&S)CLAIMS ANNUAL REPORT 2000/2001 
DISTRIBUTION LIST 
 
 
APS/Secretary of State  
CIVSEC/HQNI 
APS/Minister(AF) 
CS/HQ UKSC(G) 
APS/Minister(DP) 
CS HQ BF Cyprus 
APS/USofS 
CS HQ BFFI 
Parliamentary Branch 
CS/Gib 
 
 
DPSO/CDS 
PJHQ J5/J9 
PS/VCDS 
 
CNS 
Sec Met O 
CGS 
CESO (MOD) 
CAS 
CESO(RAF) 
CE/DPA 
CESO(Army) 
CE/DLO 
CESO(N) 
CinC Fleet 
D SEF (Pol) (ESTC) 
Chief of Fleet Support 
Health & Safety Executive 
CinC Naval Home Command 
DGTS SE (Pol) 
CinC Land 
 
AG 
Area Claims Officer NI 
QMG 
Area Claims Officer North West Europe 
AOCinC(STC) 
Area Claims Officer Cyprus 
AOCinC/AML 
Area Claims Officer Bosnia 
AOCinC/AMP 
 
Surgeon General (2 copies) 
CE/AFPAA 
 
CE/ABRO 
DCDS ( C ) 
CE/ABSDA 
DCDS(P&P) 
CE/APC 
DCDS(S) 
CE/ATSA 
 
CE/Army Training and Recruiting Agency 
PS/PUS 
CE/DASA 
PS/2nd PUS 
CE/Defence Animal Centre 
PS/CSA 
CE/Defence Bills Agency 
Personnel Director 
CE/DCTA 
Finance Director 
CE/DCA 
Policy Director  
CE/DCSA 
Science & Technology Director 
CE/Defence Dental Agency 
DG SP (Pol) 
CE/Defence Housing Executive 
DGS&S 
CE/DE 
DGCM 
CE/Qinetiq 
DG Commercial 
CE/DISC 
DGMO 
CE/DMTO 
DGICS 
CE/DPCSA 
 
CE/DSA 
D C&L(F&S) 
CE/DTMA 
 61

DC&L(F&S) Legal 
CE/DVA 
D SP Pol(P&W) 
CE/DSA 
SP Pol 2 
CE/Duke of York’s Royal Military School 
DD SP Pol Vets 
CE/JARIC 
DP&A 
CE/LISA 
DLO/SpOps4 
CE/Medical Supplies Agency 
 
CE/Meteorological Office 
Hd GVIU 
CE/Military Survey Defence Agency 
GVIU 1 
CE/MDPA 
 
CE/NARO 
Legal Adviser 
CE/NBSA 
JAF 
CE/NMA 
JAG  
CE/Naval Recruiting and Training Agency 
DALS 
CE/Pay and Personal Agency 
DLS(RAF) 
CE/RAFLSS 
CNJA 
CE/RAFMGDA 
Robson McLean WS (2 copies) 
CE/RAFPMA 
Treasury Solicitor (5 copies) 
CE/RAFSEE 
Crown Solicitor (3 copies) 
CE/RAFTGDA 
Chambers of: 
CE/SCE 
Robert Jay QC (5 copies) 
CE/Warship Support Agency 
Ian Burnett QC (5 copies) 
CE/Hydrographic Agency 
Philip Havers QC (5 copies) 
CE/DSCA 
Stephen Irwin QC (5 copies) 
 
 
Fin Pol 
CM(PAS) 
RP(Fin) 
CM P&B1 
RP(Navy) 
Equal Opportunities Team 
RP(Army) 
PMA (CS)1b 
RP(Air) 
Secretary – CCSU 
 
CM Industrial Relations Unit 
DISN 
 
DPR(N) 
SGD/DBM+S 
DPR(A) 
Med L(N) 
DPR(RAF) 
AMD (Med Leg) (2 copies) 
 
Med Org 2(RAF) 
DTMSC (all members) 
SO1 Prev Med UKSC(G) 
JSRTR (all members) 
APC (Litigation) 
Master Driver HQ2 (SE) Brigade 
APC(Sec) 
TCWO HQ 42 Brigade 
NMA Sec 2 
SO3 Log Sp 
NP Sec 2 
Master Driver HQ 49 inf Brigade 
NP Sec 3 
Command Master Driver HQNI 
AMP Sec (ET) 
OC Log Sp unit 
 
 
Sec CFS 
Chief Press Officer (10 copies) 
Command Sec CINCFLEET 
 
H&S FOSF 
 
 62

Hd NP Sec 
Royal British Legion (3 copies) 
 
 
Command Sec AG 
Association of Personal Injury Lawyers 
Command Sec HQLAND 
(5 copies) 
APC Secretariat (2 copies) 
 
PM(A) 
 
Hd QMG Sec 
AXA Corporate Solutions (UK) Ltd 
DG/CE AITO 
Willis Ltd 
H/CE(H) 
Royal & Sun Alliance 
 
Betesh Fox & Co 
CS(STC) 
 
Cmd Sec(LC) 
All Claims staff 
Cmd Sec RAF Personnel and Training Cmd 
 
Hd of DAS 
File 
House of Lords Library 
House of Commons Library 
MOD Library 
 
JSCSC (Bracknell) 
 
 
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