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 
 
 
 
 
 
 

 
 

 
 

          
 
Claims 
 
Annual Report 
2001/2002 
 
 
 

 
 
 
 
 
 
 
 

 
 
DC&L(F&S)Claims 
July 2002 

CLAIMS ANNUAL REPORT 2001/2002 
 
CONTENTS 
 
 

Page Number 
 
Introduction by Chief Claims Officer   

 
 
 
 
 
 

 
Executive Summary    

 
 
 
 
 
 
 
 

 
 
Section One      - 

Introduction   
 
 
 
 
 
 

 
Section Two      - 

Risk Management  
 
 
 
 
 
 

 
Section Three   - 

Public Liability Claims  
 
 
 
 
 
10 
 
Section Four     - 

Service Personnel Employer’s Liability Claims    
 
17 
 
Section Five     - 

Civilian Staff Employer’s Liability Claims  
 
 
21 
 
Section Six      - 

Motor Claims  
 
 
 
 
 
 
22 
 
Section Seven    - 

Clinical Negligence Claims    
 
 
 
 
25 
 
Section Eight     - 

Service Personnel Employment Tribunal Claims   
 
27 
 
Section Nine      - 

Area Claims Officers  
 
 
 
 
 
28 
 
Section Ten     - 

Insurance and Indemnities   
 
 
 
 
35 
 
Section Eleven  - 

Novel and Contentious Claims  
 
 
 
 
37 
 
Section Twelve - 

Law and Practice 
 
 
 
 
 
 
42 
 
Annex A 

   - 
Ministry of Defence, D C&L(F&S)Claims Organisation   
51 
 
Annex B 

   - 
Top 20 cases settled by D C&L(F&S)Claims 2001/2002   
57 
 
Annex C 

   - 
Top 10 Service Personnel cases settled by RSA 2001/2002 
58 
 
Annex D 

   - 
Top 10 Civilian Staff cases settled by AXA 2001/2002 
 
59 
 
 
 
1

CLAIMS ANNUAL REPORT 2001/2002 
 
INTRODUCTION BY THE CHIEF CLAIMS OFFICER 
 
[To a judge who complained that he was no wiser at the end of the case than at the start] 
 
“Possibly not, My Lord, but far better informed” 
 
This is the fifth Claims Annual Report.  I hope that on reading the report you too will be better 
informed – and perhaps a little wiser.  
 
Financial year 2001/02 will undoubtedly feature large in any future review of the Claims 
organisation due to two very high profile High Court cases against the Department.  In January 
2002 a High Court judge declared an incompatibility between the European Convention of Human 
Rights and Section 10 of  the Crown Proceedings Act (which barred Service personnel from suing 
the Crown prior to 15 May 1987).  The Department secured leave to take the matter to the Court of 
Appeal which ruled in favour of the MOD.  The Claimant, however, secured leave to take the 
matter to the House of Lords. 
 
This was followed by the commencement on 4 March of the biggest ever trial against the Ministry 
of Defence to consider allegations that the Department failed to recognise, diagnose and treat 
about 1,700 former Service personnel allegedly suffering from Post Traumatic Stress Disorder.  
The trial is scheduled to run until the autumn with judgment likely to be handed down in the new 
year. 
 
The cost of claims against the MOD continues on an upward path and increased from £88.5 
million in 2000/01 to £91.3 million in the last financial year.  This increase echoes the uplift in the 
award of damages experienced by other employers and generally reflects the litigious nature of 
society.  We cannot limit or place restrictions on the amo unt of damages paid to someone injured 
as a result the Department’s negligence.  It is right and proper that cases are settled in line with 
common law awards of damages, but we must learn how to reduce avoidable accidents by good 
risk management.  Many of the Department’s employees undertake inherently hazardous tasks and 
are necessarily trained to tackle life-threatening events.  I am not for one moment suggesting that 
we will ever eliminate accidents altogether, but, with the support of the Permanent Secretary, the 
Claims Risk Management Group (RMG) was formed in January 2001 and charged with the 
responsibility of analysing data, identifying the most common risk areas, and putting forward 
remedial measures or initiatives to bring about change.  It is unlikely that this work will improve 
matters over night, but it should lay the foundations for greater awareness of the type of risks that 
cause accidents if left unchecked.  I am delighted with the work undertaken by my Risk 
Management team and the very positive feedback received from staff at all levels. 
 
Claims staff are now better trained than ever before and have acquired a thorough knowledge of 
the Civil Procedure Rules and the tort of negligence.  The Claims and Legal Functional 
 
2

Competence Framework, which is backed by a broad training package attracting continued 
professional development accreditation, sets out the basic skills and knowledge required to become 
an effective member of the Claims team.  The first secondment from the MOD Claims 
organisation to industry was organised during 2001/02 and helped broaden our view of the way 
commercial claims managers handle claims. 
 
We continue to pursue settlement through Counsel-to-Counsel conferences. In 2001/02 11 such 
conferences took place involving major cases and the savings in compensation, legal costs and 
court time were significant. 
 
I make no apology for repeating a theme mentioned in earlier Annual Reports that claims should 
not 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 some of the cases mentioned in this year’s 
report. It is extremely difficult for most of us to imagine the suffering caused by a catastrophic 
injury which happened in a split second and possibly could have been avoided by good risk 
management. 
 
There have been some organisational changes affecting Claims Branch during the year.  Control of 
the branch at Three-star level and above transferred from the Personnel Director to DCDS(Pers) 
with effect from 1 October 2001.  Within the Branch, a second Senior Claims Officer post was 
created from 1 February 2002 in view of the increasing workload of major cases. 
 
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, Room 601, 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












Some of the Claims management team 
 
Jef Mitchell 
Chief Claims Officer 
Peter Conliffe 
Robin Bonavia 
Senior Claims Officer 
Senior Claims Officer 
Policy, Finance & Risk 
Claims Handling 
Management 
Ian Eastwell 
Pauline Chatterley 
Team Leader 
Norman McNair 
Team Leader 
Clinical Negligence 
Area Claims Officer 
Public Liability 
& Employment     
North West Europe 
Group 
Tribunal Group 
 
 
4

EXECUTIVE SUMMARY 
 
 
1. 
Total DC&L(F&S) expenditure in the year 2001/2002 including legal fees of £24.1 million 
was £104 million of which £91.5 million was claims expenditure including legal costs. 
 
2. 
351 Service personnel employer’s liability claims were settled at a total cost of £32.3 
million.  
 
3. 
950 civilian employer’s liability claims were settled at a total cost of £12.76 million. 
 
4. 
639 public liability claims were settled at a total cost of £13.154 million. 
 
5. 
3503 third party motor claims in the UK were settled at a total cost of £11 million. 
 
6. 
59 clinical negligence claims were settled at a total cost of £8.9 million. 
 
7. 
11 Employment Tribunal cases were settled at a total cost of £215,750 
 
8. 
ACO North West Europe settled 948 cases at a total cost of £1.8 million. 
 
9. 
ACO Cyprus settled 388 cases at a total cost of £282,000 
 
10. 
ACO Northern Ireland settled 538 cases at a total cost of £819,694 
 
11. 
ACO Balkans settled 336 cases at a total cost of £223,247 
 
12. 
ACO Falkland Islands settled 6 cases at a total cost of £44,797 
 
13. 
2032 intentions to claim are registered for those alleged to be suffering from Gulf War 
Illnesses. 
 
14. 
1700 claims have been received from Service personnel alleging Post-Traumatic Stress 
Disorder. 
 
15. 
Highest claim settled in year £3.6 million 
 
16. 
At 1 April 2002, the total number of claims lodged with DC&L(F&S) Claims or the 
Department’s commercial claims handlers was 9840 
 
 
 
 
5

 
SECTION ONE 
 
INTRODUCTION 
 
Organisation 
 
1.1 
MOD Claims branch (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.  It is not responsible for contractual, quasi-contractual, sales or 
estates matters.  It is headed by the Chief Claims Officer (Band B1) and two Senior Claims 
Officers (Band C1).  The Chief Claims Officer reports through DC&L(F&S) and DGSP Pol to 
DCDS(Pers).  Details of the staffing and work of the Claims branch is at Annex A. 
 
Responsibilities 
 
1.2 
In addition to being responsible for processing common law compensation claims, Claims 
branch also has a number of other important responsibilities such as provid ing 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 undertakes a variety 
of secretariat tasks and during the period of this report dealt with 129 Ministerial Correspondence, 
301 Official Action Letters and 25 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, Kosovo 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 Claims branch  acquire the skills, knowledge 
and experience needed to enable them to contribute effectively to the goals of the division.  Claims 
staff 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, 
secondments are arranged with industry.  This year a member of the Risk Management Group was 
seconded to one of our commercial claims handlers where she was able to gain wider experience 
from dealing with claims for other large organisations. 
 
1.6 
This year also saw the long awaited introduction of a new claims database for in- house 
claims under the name of RAPID.  This will enable more information to be stored which will assist 
in  the handling of individual claims and permit more detailed analyses to be undertaken for 
purposes of risk management and financial reporting. 
 
6

 
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. claims arising from military low flying aircraft; 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 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, Claims branch also handles 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 Claims branch which holds 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 the ir homosexuality.  As a result of a judgment 
 
7

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 77 alleged homosexual dismissal cases.  We are 
actively seeking to have them struck out by the Employment Tribunal.  Settlement offers were 
previously made in all those cases where the Department felt compensation was warranted, and, to 
date, 17 individuals have accepted an offer and payments have been made.  
 
 
SECTION TWO 
 
RISK MANAGEMENT 
 
“Precaution is better than cure” 
Sir Edward Coke 
 
2.1 
At the beginning of the Risk Management section in the last Claims Annual Report was the 
headline ‘All staff can play their part in claims risk management’.  This is a message that the RMG 
has aimed to promote throughout the past year by various means such as presentations, the Claims 
Newsletter, articles in MOD publications and at meetings.  It is a message that has been well 
received at all levels, especially when people realise how much money compensation claims cost 
the Department and how much suffering is caused. 
 
 
£120,000,000
 
 
£100,000,000
 
£80,000,000
 
 
£60,000,000
 
£40,000,000
 
 
£20,000,000
 
£0
 
92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02
 
 
2.2 
It is important to note that the compensation payment and associated legal costs may not be 
the only financial consequence for the Department.  If an individual is very badly injured and is 
either medically discharged or unable to carry out the same work as before, MOD may have to 
recruit and train new staff. 
 
2.3 
The most obvious way for an individual to play a part in claims risk management is to take 
steps to ensure their own physical safety as well as that of their colleagues and members of the 
public.  Risk assessments are now in place for all establishments, but they can only address issues 
apparent at the time of assessment.  For example, after an office reorganisation or the introduction 
of a new piece of equipment, a new risk assessment should be carried out. In the same way, 
everyone can take simple and straightforward action to alert the appropriate authority if problems 
 
8

develop.  For example, if a flight of steps become dangerous because of loose tiles or concrete, 
carpets fray in offices or lights become defective.  Too often after an incident people are inclined 
to say “It was an accident waiting to happen, but I thought somebody else would report it.” 
 
2.4 
Our hope is that in the future more people will think “There’s an accident waiting to 
happen which could be prevented if I were to report it” 
 
2.5 
Many claims made against the MOD relate to physical injury, but there are other categories 
of claim which staff can help eliminate.  These include claims arising from racial and sexual 
discrimination, harassment, failure to follow laid down procedures or providing incorrect advice. 
 
2.6 
We of course acknowledge that accidents and incidents giving rise to compensation claims 
will never be completely eliminated.  When such cases arise staff at all levels have a role to play 
by assisting Claims staff in establishing the facts of the case so that a view on liability is reached 
as quickly as possible.  One issue that the RMG has become involved with over the last year is the 
retent ion of records, given the importance of documents such as accident reports, inquiries and 
personnel files to claims handling.  If an accident takes place, it is important that all necessary 
documentation is completed promptly and accurately.  This will allow the handling of any claim 
made in respect of the incident to be dealt with effectively and efficiently.  This is beneficial both 
to the Claimant and MOD on the grounds that liability is established in a timely manner and the 
cost of additional investigations is kept to a minimum. 
 
2.7 
The list of documents which would prove useful to a claims handler, and the Courts might 
later require, is predictably extensive.  However, the following list includes some of the most 
frequently required documents: 
 
Accident Book entry 
Accident report form (MoD Form 2000) 
Complaint records 
First Aider’s report 
Health surveillance records 
Instructions for use of personal protective equipment 
Maintenance and repair records  
Risk assessments 
Training records and syllabuses 
Witness statements 
 
2.8 
If all staff were routinely to ensure that the necessary documents are raised and retained, 
MOD could save money by repudiating claims expeditiously where it can be shown there is no 
liability or dispense with the need for prolonged and costly investigations where liability is clear.  
It is conceivable that were MOD unable to disprove allegations of negligence because evidence 
was not available compensation would have to be paid. 
 
2.9 
A major part of the work of the RMG, in order to create a greater awareness of risk 
management issues, is the provision of statistics to units and establishments about the claims 
activity relating to their areas of responsibility.  This information provides a useful indicator for 
local management of measures to be taken to reduce risk in areas giving rise to claims.  The 
benefit of such work is twofold in providing an improved working environment and saving money. 
 
9

 
2.10 
The above gives a flavour of the type of awareness that can reduce accidents and play an 
important part in driving down the number of compensation claims.  Our firm aim is that the 
statistics compiled in future years will demonstrate that improved risk management awareness has 
resulted in a safer working place. 
 
 
 
SECTION THREE 
 
PUBLIC LIABILITY CLAIMS 
 
 

Personal injury and property damage claims  
 
3.1 
The majority of claims submitted to the Public Liability Group (PLG) are for personal 
injury or property damage.  Most 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 and damage caused by  potholes in roads.  Interestingly, there have also been a 
substantial number of claims resulting from the improper operation of security barriers at check 
points which have resulted in damage to privately owned vehicles.  Perhaps the most unusual 
property  damage claims we have received this year resulted from a Chinook helicopter attempting 
to land in a car park. 
 
  
 

£12,000,000
 
800
£10,000,000
 
700
 
600
£8,000,000
500
 
£6,000,000
400
 
300
£4,000,000
 
200
 
£2,000,000
100
 
0
£0
98/99
99/00
00/01
01/02
 
98/99
99/00
00/01
01/02
 
Number of claims received
Amount paid
 
Number of claims settled
 
 
 
 

 
10

 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
563 
722 
556 
570 
Number of claims settled 
276 
494 
310 
356 
Amount Paid (£) 
1,357,000 
1,672,000 
2,524,000 
11,324,000 
 
 
3.3 
Whilst there was a substantial increase in the number of claims submitted in 1999/2000 
probably due to a backlog of claims released by solicitors after the new Civil Justice Reforms were 
introduced on 26 April 1999, public liability claims this year have again increased slightly over 
last year’s figures although not to the 1999/2000 levels.  The large increase in the amount of 
compensation paid out in FY01/02 is due to one personal injury cla im which settled for £1.925 
million and MOD’s contribution to a multi- national settlement of compensation payments made to 
the families of 24 passengers and crew killed in an accident at Pristina airport in November 1999 
involving a civilian aircraft ferrying aid and relief workers  
 
Political or sensitive claims in Northern Ireland 
 
3.4 
Claims PLG also deals with public liability claims from Northern Ireland which are of a 
political and/or sensitive nature.  Claims are normally received from members of the public who 
have had some contretemps with members of the armed forces which are in support of the Police 
Service for Northern Ireland (PSNI) (formerly the RUC).  The majority of claims, therefore, are 
for alleged assault, harassment or wrongful arrest, quite often at vehicle checkpoints.  As can be 
seen from the table below, the number of claims continues to decrease due to the cease fire in 
Northern Ireland which has resulted in less military activity in support of the PSNI.  There was 
also a considerable drop in the amount of compensation paid last year (an average of just under 
£2,500 per claim as opposed to an average of over £5,500 in the previous year and about £6,500 in 
1999/2000). 
 
 
 
 
£350,000
60
 
£300,000
50
 
£250,000
  40
£200,000
  30
£150,000
  20
£100,000
  10
£50,000
  0
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of claims received
Amount paid
 
Number of claims settled
 
 
 
 
 

 
11

 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
49 
54 
34 
28 
Number of claims settled 
58 
31 
56 
30 
Amount paid (£) 
243,000 
206,000 
320,000 
74,000 
 
 
Maritime Claims  
 
“Smooth seas do not make skilful sailors” 
African proverb 
 
3.5 
Maritime claims by and against the MOD 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. 
 
3.6 
The MOD 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 a vessel is salved, the Department 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 MOD 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 Department 
 
  
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of property claims 
159 
44 
28 
30 
received  
Number of property claims 
24 
27 
23 
32 
settled  
Amount paid (£) 
698,934 
109,895 
165,733 
217,830 * 
Number of salvage claims 
Included 
Included 
Included 

received  
above 
above 
above 
Number of salvage claims 
Included 
Included 
Included 

settled  
above 
above 
above 
Amount paid (£) 
Included 
Included 
Included 
271,200 # 
above 
above 
above 
 
*  Includes payments of £139,106. as a result of an oil spill in Portsmouth harbour in 1997. 
 
#  Includes £200,000 paid to date towards the salvage of HMS Grafton. 
 
 
 
 
12

14
£450,000
 
12
£400,000
 
10
£350,000
 
£300,000
8
£250,000
 
6
£200,000
 
£150,000
 
4
£100,000
 
2
£50,000
 
£0
0
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of maritime recovery & salvage
Amount Recovered
 
claims initiated
 
Number of maritime & salvage claims
 
settled
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of maritime recovery 
10 
10 
13 
13 
and salvage claims initiated  
Number of maritime recovery 



Nil 
and salvage claims settled 
Amount recovered (£) 
164,804 
134,164 
434,099 
Nil 
 
 
3.7 
In addition to the work undertaken by Claims branch, Flag Officer Scotland, Northern 
England and Northern Ireland (FOSNNI) and Flag Officer Sea Training (FOST) have delegated 
authority to settle claims of up to £8,000 per fishing gear claim, £5,000 per collision claim and 
£1,000 per oil spillage claim. 
 
 
 
1998/1999 
1999/2000 
2000/01 
2001/20002 
Number of claims settled by 
59 
54 
35 
43 
FOSNNI 
Amount paid by FOSNNI (£) 
81,230 
79,394 
59,154 
55,495 
Number of claims settled by 
40 
51 
33 
40 
FOST 
Amount paid by FOST (£) 
60,859 
76,923 
60,558 
45,900 
Total amount paid (£) 
142,089 
156,317 
119,712 
101,395 
 
 
Low Flying Military Aircraft Claims  
 
3.8 
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.  Such claims are handled on an ex 
gratia basis but are investigated in the same way as if the principles of common law legal liability 
 
13

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): 
 
"… 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."  

 
3.9 
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. 
 
3.10 
Unfortunately, this is a category of work which requires careful monitoring to ident ify 
potentially fraudulent claims.  It was necessary to initiate one investigation into fraud during 
2001/2002. 
 
3.11 
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.  In addition, the Regional 
Community Relations Officers (RCROs) have been given authority from the Chief Claims Officer 
to recommend fast track settlements for simple straightforward claims up to £250. 
 
 
 
300
£1,200,000
 
250
£1,000,000
 
200
£800,000
 
150
 
£600,000
100
 
£400,000
 50
£200,000
  0
 
98/99
99/00
00/01
01/02
£0
98/99
99/00
00/01
01/02
 
Number of claims received
 
Amount paid
Number of claims settled
 
 
 
 
 
 
14

 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
272 
233 
194 
182 
Number of claims settled 
180 
160 
131 
127 
Amount paid (£) 
610,000 
682,000 
822,000 
1,046,895 
 
 
3.12 
The slight downward trend in the number of claims received has continued.  Once again 
this is a reflection of the overall general, and continued, reduction in the number of low level 
sorties over mainland Britain due to operational commitments elsewhere.  Whilst the amount of 
compensation paid has risen to a little over £1 million, nearly 50% of this is attributed to two 
claims. 
 
Air Crash claims settled by Defence Estates 
 
3.13 
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.  The total amount paid by DE in 
respect of this crash was in the region of £245,000 
 
 
 

35
£140,000
 
30
£120,000
 
25
£100,000
 
20
£80,000
 
15  
£60,000
10  
£40,000
 
£20,000
 
£0
98/99
99/00
00/01
01/02
 
98/99
99/00
00/01
01/02
 
Number of claims settled by DE
Amount paid
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims settled by DE 

33 
11 

Amount paid (£) 
128,300 
93,511 
112,458 
119,000 
 
 
Visiting Forces Claims  
 
3.14 
Claims PLG 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 can be on behalf of any of the states who are signatories to 
 
15

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, MOD 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 and statistics are given in Section 6. 
 
Financial Recoveries 
 
3.15 
Where MOD sustains loss or damage to equipment or property which has been caused by a 
third party, Claims PLG will seek to recover those losses from the third party in the UK and 
overseas.  The main causes for taking action against third parties are where MOD static property 
has been damaged by vehicles, fire, the negligence of a contractor, road traffic accidents overseas 
and damage to visiting forces’ vehicles and static property. 
 
3.16 
Claims PLG does not handle recoveries in those countries covered by Area Claims Officers 
(see Section 9) nor in respect of road traffic accidents in the UK for which recoveries are pursued 
under contract to MOD by Willis Ltd (see Section 6). 
 
 
 
  
60
£2,500,000
  50
£2,000,000
  40
 
£1,500,000
  30
£1,000,000
  20
 

£500,000
10
 
  
0
£0
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of recoveries initiated
 
Amount recovered
Number of reciveries settled
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of recoveries 
29 
38 
60 
38 
initiated  
Number of recoveries 
17 
14 
16 
24 
settled 
Amount recovered (£) 
68,000 
45,000 
13,000 
2,016,000 
 
 
3.17 
The large sum recovered in the last financial year is mostly due to £1.8 million recovered 
on the MOD’s behalf by the United Nations Compensation Commission for the compensation paid 
to members of the British Liaison Team who lost all their personal possessions when Iraq invaded 
and occupied Kuwait in 1990, and a recovery of £104,000 made  following damage to an RAF 
Tristar aircraft at Ancona Airport when it was hit by motorised passenger steps.  The recovery not 
only included the costs of the damage to the aircraft itself but also the cost of aircrew, fuel, 
 
16

operating and engine costs incurred in flying the damaged aircraft from Italy to UAE where the 
repair was carried out.  These two recoveries aside, Claims PLG recovered nearly 2.5 times the 
amount recovered in the previous year. 
 
 
SECTION FOUR 
 
SERVICE PERSONNEL EMPLOYERS LIABILITY CLAIMS 
 
“Do not needlessly endanger your lives until I give you the signal” 
Dwight D Eisenhower 
 
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 MOD’s Veterans Agency (formally the 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 
Royal and SunAlliance plc handle claims from Service and ex Service personnel which 
were notified after 1 July 1996 on behalf of MOD under contract.  Claims notified before that date 
and some more recent political or sensitive claims are handled by the Claims Service Personne l 
Employers Liability Group.  The number of claims and amounts paid are shown below:- 
 
 
 
 
 
 
 
 
 
 
 

 
17

1000
£40,000,000
 
£35,000,000
 800
£30,000,000
 600
£25,000,000
 
£20,000,000
 400
£15,000,000
 
£10,000,000
200
 

£5,000,000
£0
  0
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
 

Number of claims received
Amount paid
Number of claims settled
 
Number of claims repudiated
 
 
1998/99 
1999/2000 
2000/01 
2001/02 
Number of claims received 
738 
752 
924 
819 
Number of claims settled 
412 
504 
948 
351 
Number of claims repudiated 
165 
344 
397 
253 
Amount paid (£) 
26,700,000 
31,000,000 
36,600,000 
32,312,369 
 
 
Trends  
 
4.4 
The number of registered personal injury claims against MOD from Service and former 
Service personnel during the period of the report being handled by Royal and  Sun Alliance has 
steadily risen over the last 5 years from 715 in 1997/98 to 797 in 2001/02.  The average cost of the 
claims registered is, however, lower during the reporting period than in the previous 5 years.  In 
certain categories of claim the numbers have diminished, but have increased at the lower end of 
the scale; 
 
 
Category 
1996 
1997 
1998 
1999 
2000 
2001 
Bullying 
21 
13 

12 
14 

Parachuting 






Slip/trip 
36 
62 
66 
75 
80 
88 
 
 
BRIEF SUMMARY OF GROUP ACTIONS 
 
Post Traumatic Stress Disorder (PTSD) 
 
4.5 
While recognizing the emotive and sensitive nature of the issues the PTSD group actions 
raise, it is important that they are set out within a factual context.  Stress related medical disorders 
are recognised by the Armed Forces as potentially serious and disabling conditions.  PTSD was 
not internationally recognised as a medical condition until the 1980s and methods of treatment 
have subsequently developed in the medical world and in the Armed Forces.  The measures now in 
place to combat PTSD in  the Armed Forces have, therefore, evolved and been enhanced over a 
 
18

number of years to reflect our improving knowledge of the condition, its effects and the best 
methods of remediation. 
 
4.6 
MOD acknowledges 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.  MOD does, however, have a duty to ensure 
that Service personnel receive proper treatment and where we fail in this respect, and the 
individual suffers loss or damage as a result, then that individual may be entitled to compensation. 
 
4.7 
About 1700 PTSD claims have been received from former members of HM Forces.  These 
claims mainly relate to service during the Falkland conflict, Gulf conflict, in Bosnia, and in 
Northern Ireland.  Because many of the claims contain similar allegations the Lord Chief Justice 
set up a Group Action in 2000.  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 
PTSD.  The Group Action commenced on 4 March in the High Court and is expected to conclude 
in November 2002 with judgment to be handed down at some unspecified date.  It would therefore 
be inappropriate to comment further save to say that it is important to emphasise that this litigation 
is not about the validity of PTSD as a psychiatric disorder, nor is it about soldiers unjustifiably 
suing for being exposed to traumatic incidents while serving in HM Forces.  The Claimants’ case 
is that PTSD is detectable and preventable, and that proper systems would or should have achieved 
these objectives in the vast majority of cases. 
 
Nuclear Test Veterans  
 
4.8 
There have been no significant developments over the period of this report. 
 
Radiation Compensation Scheme  
 
4.9 
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 
amo unt 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 “full” payment 
of compensation 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. 
 
4.10 
During financial year 2001/02, the Scheme received 23 new claims from former MOD 
employees (military and civilian) who believe their illness is associated with exposure to 
 
19

occupational ionising radiation.  Over the same period 1 claim was settled.  (Since 1994 five 
Ministry of Defence cases have been settled under the Sche me). 
 
Exercise Dynamic Impact  
 
4.11 
Exercise Dynamic Impact took place in May 1984.  Personnel from 1st Battalion The 
Parachute Regiment and the Pathfinder Platoon 5 Airborne Brigade were flown from the UK and 
parachuted from their aircraft, landing on a  military drop zone (DZ) in Capo Teulada, Sardinia.  
UK forces were to act as the ‘enemy’ in a NATO exercise.  A total of 76 of 480 men who 
parachuted into the DZ sustained injuries, the majority of which were not serious. 
 
4.12 
Compensation claims were however, subsequently made against MOD by 20 of the injured 
parachutists.  Following legal advice from Counsel, MOD conceded liability in March 1998, and 
work began on attempting to settle each of the claims.  This year has seen the last of the claims 
settled.  The total amount of compensation paid in damages to those injured was £1.74 million. 
 
Gulf Veterans’ Illness 
 
4.13 
MOD has still not received any writs or claims of detail stating specific allegations of 
negligence sufficient to start considering these  claims.  MOD has not accepted either cause or 
negligence but has acknowledged less then 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 imple mented and the initial failure to provide information about the use of 
organophosphates. 
 
4.14 
During the period of this report, Claims branch received an additional 60 notifications from 
Gulf veterans, their families and civilians of an intention to claim compensation.  The total number 
of such notifications as at 31 March 2002 was 2,032, of which 1,929 are deemed to be currently 
‘active’. 
 
4.15 
Further information on Gulf veterans’ illnesses issues is available from the MOD’s Gulf 
Veterans Illness Unit web site at:  www.mod.uk/issues/gulfwar. 
 
Asbestos Related Diseases 
 
4.16 
Prior to May 1987, Service personnel were prevented from pursuing claims for 
compensation from MOD by Section 10 of The Crown Proceedings Act 1947. (Crown Immunity 
prevented claims from being made prior to 1947.)  However, Section 10 was repealed by The 
Crown Proceedings (Armed Forces) Act 1987.  Since the change in the law, which was not made 
retrospective, Service personnel who suffer  loss or injury as a result of negligence by the Ministry 
of Defence have been entitled to make common law claims for compensation.  When 
compensation claims are submitted, 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 legal liability to pay 
compensation we do so. 
 
4.17 
At the time of the passage of the 1987 Bill, the question of retrospection was debated and 
motions to allow member of the Armed Forces, past and present, to pursue claims for injury or 
 
20

death suffered in incidence since 1947 were moved.  They were however defeated or withdrawn.  
The view that prevailed at the time was that there would have been no logical point at which to 
draw a line, short of trying to cover all incidents and all types of injury going back to 1947 and 
that to make the Act retrospective would create many new examples of unfairness and injustice. 
 
4.18 
An ex-serviceman, (Mr Matthews) suffering from an asbestos related disease mounted a 
lega l challenge that Section 10 of the Crown Proceedings Act 1947 is incompatible with the 
European Convention on Human Rights.  Mr Matthews alleged a breach of Article 2 (right to life) 
and Article 6 (due process rights) of the Human Rights Act.  The case under Article 2 was that by 
exposing him to asbestos dust the Crown was in breach of its obligation to take positive steps to 
safeguard Mr Matthews' health.  The case under Article 6 was that Section 10 Crown Proceedings 
Act is a 'blanket' immunity, which deprives Mr Matthews of his right of access to the Court.  The 
matter was heard in the High Court on 10 and 11 December 2001.  Mr Justice Keith handed down 
judgment on 22 January 2002 in favour of the Claimant.  The Department secured leave to take 
this matter expeditiously to the Court of Appeal on the basis that we believed the judgment to be 
flawed and should therefore be subject to a legal challenge.  Lord Phillips, Master of the Rolls, 
Lord Justice Mummery and Lady Justice Hale heard the Department’s appeal on 22 and 23 April.  
A unanimous judgment was handed down on 29 May in favour of the Department.  The Court of 
Appeal, however, granted leave for the Claimant to take the matter to the House of Lords. 
 
 
SECTION FIVE 
 
CIVILIAN STAFF EMPLOYER’S LIABILITY CLAIMS 
 
5.1 
Since 1982, MOD has contracted out the handling of its civilian employee employer's 
liability claims.  The contract was held by AXA Corporate Solution Services Ltd up to 30 April 
2002, but following a competitive tender Royal and SunAlliance plc will handle this work with 
effect from 1 May 2002 until 30 April 2007. 
 
5.2       MOD civilian 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
 
 

400
 
300
 
200
 
 

100
 
0
98/99
99/00
00/01
01/02
 
 

Asbestos
NIHL
VWF
Accidents
 
21

 
1998/99 
1999/00 
2000/01 
2001/02 
Asbestos-related disease 
237 
223 
215 
368 
Noise Induced Hearing Loss 
297 
202 
143 
110 
Vibration White Finger 
90 
53 
35 
70 
Accident Injury 
562 
475 
498 
573 
(Falls/Machinery/Lifting) 
TOTAL 
1186 
953 
891 
1121 
 
 

£7,700,000.00
 
£6,600,000.00
 
 

£5,500,000.00
 
£4,400,000.00
 
£3,300,000.00
 
£2,200,000.00
 
£1,100,000.00
 
 

£0.00
98/99
99/00
00/01
01/02
 
 

Asbestos
NIHL
VWF
Accidents
 
 
1998/99 
1999/00 
2000/01 
2001/02 
Asbestos-related disease (£) 
4,247,777 
1,151,621 
7,115,000 
2,803,629 
Noise Induced Hearing Loss (£) 
748,202 
270,979 
682,000 
4,682,601 
Vibration White Finger (£) 
197,352 
123,376 
115,000 
378,764 
Accident Injury 
1,230,780 
190,579 
6,806,000 
4,893,827 
(Falls/Machinery/Lifting) (£) 
Amount paid (£) 
6,424,111 
1,736,555 
14,718,000 
12,758,821 
 
 
 
SECTION SIX 
 
MOTOR CLAIMS 
 
“Life is too short for traffic” 
Dan Bellack 
 
Third Party Motor Claims - UK 
 
6.1 
Since 1982, MOD has contracted out the handling of claims made against the Department 
by other road users.  The contract is held by AXA Corporate Solution Services Ltd who have again 
won a competitive tender to retain the work until 2007.  The majority of motor accidents involving 
MOD vehicles occur within the UK, although AXA do handle around 40 third party claims each 
 
22

year from UK based vehicles travelling in mainland Europe.  The number of third-party claims 
handled by AXA is shown in the charts below. 
 
 
 
3000
 
£12,000,000.00
 
2500
 
£10,000,000.00
2000
 
£8,000,000.00
1500
 
£6,000,000.00
 
1000
£4,000,000.00
 
500
 
£2,000,000.00
 0
£0.00
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
 

Army
Navy
RAF
Others
Amount paid
 
 

Service 
1998/99 
1999/00 
2000/01 
2000/01 
Army 
2652 
2261 
1944 
1928 
Navy 
356 
337 
271 
216 
RAF 
593 
537 
443 
443 
Other 
258 
349 
373 
916 
TOTALS 
3589 
3484 
3031 
3503 
Amount paid (£) 
5,002,245 
7,030,000 
8,777,000 
11,000,300 
 
 
Third Party Motor Claims – Overseas (not dealt with by ACOs) 
 
6.2 
Claims arising from non-UK based vehicles overseas are handled by the appropriate Area 
Claims Officers (ACO) or Claims PLG where no ACO exists for that geographical area.  The 
Claims PLG geographical area is so large, it is not unusual 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.  This year has seen claims from Sierra Leone, Belize, Kenya, Oman and Afghanistan 
in addition to our more usual “customers” such as Gibraltar.  In accordance with JSP 341, units 
and organisations should send 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 DC&L(F&S) Claims.  
Unfortunately, this frequently does not happen and claims managers spend a considerable amount 
of time locating these essential documents. 
 
6.3 
Claims managers are required to establish that an authorised driver was driving the MOD 
vehicle on an authorised journey and route.  If these criteria are met and all the evidence suggests 
that the MOD 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 2001/2002 shows the overall trend is still downward, in fact less than half of the 
 
23

previous year’s totals were received.  It should be noted, however, that the past year was the first 
where units were responsible for their own “loss of use” and “write off” claims, although Claims 
PLG continue to deal with some residual claims resulting from accidents which occurred before 1 
April 2001. 
 
  400
£1,200,000
  350
£1,000,000
  300
 

£800,000
250
  200
£600,000
  150
£400,000
  100
£200,000
  500
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of claims received
 
Number of claims settled
Amount paid
 
 

 
1998/99 
1999/2000 
2000/01 
2001/02 
Number of claims received 
371 
357 
336 
153 
Number of claims settled 
347 
337 
265 
181 
Amount paid (£) 
687,000 
613,000 
1,076,000 
251,000 
 
 
Visiting Forces Motor Claims  
 
6.4 
Claims PLG handles third party claims involving Visiting Forces in the UK, the vast 
majority of which result from road traffic accidents.  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. 
 
 
 
£900,000
  90
£800,000
  80
£700,000
70
 
£600,000
60
£500,000
  50
£400,000
  40
£300,000
  30
£200,000
20
 
£100,000
10
 
£0
0
98/99
99/00
00/01
01/02
 
98/99
99/00
00/01
01/02
 
Number of claims received
Compensation paid
 
Number of claims settled
 
 
24

 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
85 
81 
72 
73 
Number of claims settled 
70 
73 
53 
71 
Compensation paid (£) 
241,000 
128,000 
875,000 
265,000 
 
 
Uninsured loss recoveries 
 
6.5 
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 below. 
 
 
£700,000
 
700
 
600
£600,000
 
500
£500,000
 
400
£400,000
 
300
£300,000
 
200
£200,000
 
100
£100,000
 
0
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of recoveries
Amount recovered
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of recove ries 
495 
626 
208 
382 
Amount recovered (£) 
458,000 
645,000 
173,000 
343,300 
 
 
Cost of Damage to MOD Vehicles 
 
6.6 
Claims branch does not pay for damage to Ministry of Defence owned or hired vehicles as 
this is the responsibility of the unit involved.  Similarly, with effect from 1 April 2001 
responsibility rests with the unit for any claim resulting from the “loss of use” or “write off” of the 
vehicle. 
 
 
SECTION SEVEN 
 
CLINICAL NEGLIGENCE CLAIMS 
 
7.1 
Clinical negligence claims arise when a patient considers that the advice and/or treatment 
received fell below acceptable standards due to the negligence of the medical staff.  To succeed in 
bringing a claim for negligence the Claimant must establish that they were owed a duty of care by 
the defendant and that there was a negligent breach of that duty resulting in the Claimant suffering 
damage.  Establishing a duty of care is not particularly difficult in clinical negligence cases and 
 
25

any medical practitioner or hospital can reasonably foresee that any breach of  care on their part 
may cause harm to the patient. 
 
7.2 
By their very nature clinical negligence claims can often take a very long time to reach a 
conclusion.  In many cases the Claimant will not wish to agree settlement until the full extent and 
prognosis  of their disablement is known.  This is particularly true in claims involving brain 
damaged children born in Service hospitals, where it may take many years before the full extent of 
their disablement and life expectancy can properly be assessed by medical experts. 
 
7.3 
Clinical negligence claims can be very expensive to settle.  One such claim was settled for 
£3.6 million during financial year 2001/2002. Details covering expenditure over the past three 
years is shown below. 
 
 
300
£11,000,000
 
250
£10,500,000
 
£10,000,000
 
200
 
150
£9,500,000
 
100
£9,000,000
 
50
£8,500,000
 
0
£8,000,000
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of claims received
 
Number of claims settled
Compensation paid
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
255 
147 
128 
142 
Number of claims settled 
112 
79 
79 
59 
Compensation paid (£) 
9,816,803 
9,688,420 
10,617,263 
8,924,255 
 
 
7.4 
During the past year MOD has received a small number of claims for compensation from 
patients who underwent hip replacement surgery at Catterick and Wroughton military hospitals 
during the early 1990s on the basis that there had been a comparatively high failure rate connected 
to one type of hip fitted (manufactured by the company 3M).  Under the agreed protocol, claims 
for compensation have been made to the manufactures of the hip.  However where there is 
evidence that the failure was not caused by a technical malfunction in the actual hip, but poor 
surgical technique by the surgeons concerned, 3M would look to the Department to meet any 
compensation claim. 
 
 
 
 
 
 
 

 
26

SECTION EIGHT 
 
SERVICE PERSONNEL EMPLOYMENT TRIBUNAL CLAIMS 
 
8.1 
In addition to common law claims, Claims branch 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 Claims branch involvement 
with such claims. 
 
8.2 
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.  Legal Aid is not available for representation at 
ETs, 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 also different from common- law claims.  A party cannot normally expect an 
ET to award costs if they win nor will they generally be ordered to pay the other side’s costs if 
they lose.  An ET can exceptionally award costs, if in its opinion, a party (Applicant or 
respondent)  has, in bringing or conducting proceedings, acted frivolously, vexatiously, abusively, 
disruptively or otherwise unreasonably.  Details covering expenditure over the past three years is 
shown below: 
 
 
£700,000
 
100
 
£600,000
80
 
£500,000
 60
£400,000
 
£300,000
40
 
£200,000
 20
£100,000
  0
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of claims received
Amount paid
 
Number of claims settled
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
60 
87 
99 
96 
Number of claims settled 
21 
14 
26 
11 
Compensation paid (£) 
520,063 
216,781 
666,262 
215,750 
 
 
8.3 
During the period covered by this report, amendments were made to the Sex 
Discrimination Act 1975 which have in effect made it easier for employees to successfully bring 
claims for discrimination at ETs.  In addition, on 12 October 2001, regulations based on the 1998 
European directive on the burden of proof in sex discrimination cases came into force.  The Sex 
Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 provide that, 
where an Applicant establishes a  prima facie case of sex discrimination at work, the burden of 
 
27

proof shifts to the employer to prove that there was no such discrimination.  In due course it is felt 
similar changes are likely to be made to the Race Relations Act 1976 and the Disability 
Discrimination Act 1995. 
 
8.4 
Also during the period covered by this report there have been two significant cases heard at 
ETs.  The first case related to a claim brought by a current Army Officer who alleged that he had 
been racially discriminated against whilst serving in Cyprus.  This case, which was dismissed by 
the ET on the basis that it had no jurisdiction to consider this matter, raised fundamental issues as 
to the application of the Race Relations Act 1976 on Service personnel serving overseas.  This 
may be subject to an appeal by the applicant to the Employment Appeals Tribunal.  The second 
case also brought on the basis of racial discrimination, involving an ex-Gurkha soldier, raised 
major issues relating to the different terms and conditions of service Gurkha soldiers enjoy.  
 
 
SECTION NINE 
 
AREA CLAIMS OFFICERS 
 
AREA CLAIMS OFFICE NORTH WEST EUROPE 
 
9.1 
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 MOD 
in Germany, Norway, Holland, Belgium, Luxembourg, France, Austria, Switzerland, Poland, 
Hungary and the Czech Republic.  The Area Claims Officer has 10 civilian staff processing and 
handling claims. 
 
9.2 
Financial year 2001/02 was another busy year for ACO NWE.  Despite the number of 
claims received dropping by around 30%, expenditure increased over 17% during the same period.  
An explanation for this and a commentary on some of the issues handled are listed below. 
 
Exercise Saif Sareea II 
 
9.3 
This large Tri-Service Exercise took place in Oman from September to December 2001 
although the planning and Claims activity spanned a much longer period.  The ACO (NWE) 
provided two Claims Officers as part of the Civil Secretariat team deployed during the Exercise 
with the task of setting up the claims office and procedures at the beginning of the Exercise and 
then aiming to settle the outstanding Claims at the end of the Exercise. 
 
9.4 
From the Claims perspective the exercise was a success.  Over 20,000 troops were 
involved in the exercise although the Claims team were not involved in exercise or training 
activities but dealt with “real” claims for compensation arising from the movement of troops 
around Oman. 
 
9.5 
The two Claims Officers received considerable pre-deployment briefings and training, 
including a two-day NBC training course.  Operating in temperatures of around 45 to 50 degrees 
centigrade proved a considerable challenge as well as working and living in tented 
accommodation.  The work involved constant liaison with the British and Omani military 
contingents and good communications were maintained between all parties during  the exercise.  
 
28

This enabled any claims arising to be settled in a timely fashion and avoided any adverse publicity 
for the visiting forces or our hosts. 
 
9.6 
A Road Safety briefing was given to all British personnel on arrival in theatre and this 
certainly contributed to the relatively low number of Road Traffic Accidents (RTAs) which 
occurred.  Sadly some deaths did result from these RTAs but thankfully the number was less than 
predicted at the beginning of the exercise given the scale and hazardous nature of the exercise. 
 
9.7 
Following the events of 11th September 2001 the British Forces have maintained a presence 
in Oman. One of the original Claims team who we helped train during the Exercise, has returned to 
Oman to deal with claims matters mainly relating to road and land damage.  She provided valuable 
continuity during the transition phase from Exercise Force to Logistic Support Force. 
 
Risk Management 
 
9.8 
The ACO (NWE) established a Risk Management post in 2001/02 to work and develop 
links with the Staff Master Drivers in Germany to increase the exchange of information between 
organisations.  The work to be undertaken will include presentations to Unit Transport Staff based 
in Germany to highlight the role of the ACO office. 
 
9.9 
In the forthcoming year the Risk Management team will also play a key role in the 
redevelopment of the current IT system used within the office.  It is hoped that this will enable the 
office to provide Commanders with the information they need to make informed decisions in 
respect of the risks associated with Claims. 
 
Claims Expenditure and Recoveries 
 
 
1800
£2,500,000
 
1600
 
1400
£2,000,000
 
1200
£1,500,000
 
1000
800
 
£1,000,000
600
 400
£500,000
 200
  
0
£0
98/99
99/00
00/01
01/02
 
98/99
99/00
00/01
01/02
Number of claims received
 
Amount paid
Number of claims settled
 
Amount recovered
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
1,245 
1005 
1158 
798 
Number of claims settled 
1,744 
1011 
1208 
948 
Amount Paid (£) 
2,206,000 
1,819,000 
1,528,000 
1,800,000 
Amount Recovered (£) 
700,000 
963,000 
1,008,000 
427,290 
 
29

9.10 
The fall in the number of claims can largely be attributed to Ex Saif Sareea II and the 
number of troops from our theatre who were deployed on the exercise.  This will continue to 
impact on our business next year because it normally takes several months from the date of the 
incident for settlements to be made. 
 
9.11 
Expenditure in 2001/02 in the ACO NWE area of responsibility has been distorted by three 
large cases.  First, an Employment Tribunal case in respect of sexual harassment was settled out of 
court at a cost of £125,000 which is indicative of the increasing costs of this type of claim.  It is 
important that all line managers are aware of the financial and human costs which can result from 
unacceptable behaviour in the work place. 
 
9.12 
Two payments totalling over £500,000 were also made in respect of two long running road 
traffic accident cases which resulted in the Claimants sustaining severe injuries and requiring     
on-going extensive medical treatment and care. 
 
9.13 
The level of recoveries of MOD losses was down in 2001/02 compared to previous years 
although this was largely due to court delays in a couple of long running cases.  An increase in 
recoveries is expected in 2002/03. 
 
Novel and Contentious Cases  
 
9.14 
Despite efforts to minimise claims and increase risk awareness little can be done to prevent 
the actions of individuals who fail to heed advice.  This year whilst a speed ramp (sleeping 
policeman) was being repaired in a Garrison in Germany a security guard directed vehicles to use 
the road despite the contractor declaring the road out of bounds.  As a result, the undersides of 10 
cars were damaged and claims totalling nearly £20,000 were settled. 
 
9.15 
For the first time recovery action was taken through the Courts in France following a tragic 
road traffic accident near Calais in 1998 in which three members of a Service netball team were 
fatally injured and several more seriously hurt.  Legal action is underway against the 3rd Party in a 
bid to recover our financial losses of over £170,000 arising from the accident.  A final decision on 
the claim is expected during the next 12 months. 
 
 
AREA CLAIMS OFFICE CYPRUS 
 
9.16 
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 NWE (road traffic accidents, 
public and emplo yer’s liability, and training and manoeuvre damage), but the Cyprus Treaty of 
Establishment (ToE), rather than the NATO Status of Forces Agreement, applies. 
 
9.17 
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 Cyprus’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 
 
30

crop damage.  In providing a rapid response to the claims and complaints raised by farmers and 
landowners, ACO Cyprus plays a significant role in maintaining good relations between MOD and 
the local community, a vital ingredient in supporting UK’s training rights. 
 
9.18 
ACO Cyprus seeks to reduce the risk of damage being caused and to that end routinely 
briefs all exercise reconnaissance officers prior to training taking place.  Nevertheless the last 
financial year has seen a fairly sharp rise in training and manoeuvre damage claims expenditure.  
Much of this can be linked to training undertaken by units preparing to deploy to Exercise Saif 
Sareea last autumn, but valuable lessons have been learned to help avoid a repetition. 
 
9.19 
A rise has also been observed in public liability claims, and it is believed that this reflects 
the fact that, like Britain, Cyprus is becoming a more claims conscious and litigious society
 
9.20 
Details are shown below covering the past three years, in respect of: 
 
 
 500
£300,000
 450
400
£250,000
 350
 
£200,000
300
 250
£150,000
 200
£100,000
150
 100
£50,000
  50
£0
  0
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
 

Number of claims received
Compensation paid
Number of claims settled
Amount recovered
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
474 
337 
312 
458 
Number of claims settled 
478 
323 
326 
388 
Amount Paid (£) 
228,000 
215,000 
134,000 
282,000 
Amount Recovered (£) 
37,000 
87,000 
22,000 
19,000 
 
 
AREA CLAIMS OFFICE NORTHERN IRELAND 
 
9.21 
ACO Northern Ireland is based at HQ Northern Ireland and deals with common law claims 
for and against the MOD in Northern Ireland.  It also acts as a focal point for civilian employee 
claims.  ACO NI has authority to settle claims up to £50,000. 
 
9.22 
The continuation of the ceasefire has seen a fall of about 25% in the number of claims 
submitted during the year.  About 85% of claims submitted continue to be as a result of military 
helicopter activity and vary in value from £25,000 for a horse that had to be euthanised after being 
scared by low flying helicopters down to £28 for a blouse blown from a washing line onto a hedge 
by the downdraft of a helicopter. 
 
31

 
 
 
£1,600,000
900
  800
£1,400,000
  700
£1,200,000
  600
 
£1,000,000
  500
£800,000
  400
£600,000
  300
£400,000
  200
 
£200,000
100
 
0
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
 
Number of claims received
Amount paid
 
Number of claims settled
 
Number of claims repudiated
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
834 
858 
832 
625 
Number of cla ims settled 
809 
708 
747 
538 
Number of claims repudiated 
270 
194 
212 
65 
Amount paid (£) 
1,297,000 
1,433,000 
1,210,000 
819,694 
 
 
AREA CLAIMS OFFICE BALKANS 
 
9.23 
Claims handling in the Balkans theatre of operations underwent a major organisational 
change  during financial year 2001/02.  In November 2001 the MOD’s Claims Office in Kosovo 
was established to deal with claims arising from the post-12 June 1999 activities of the UK 
contingent of the Kosovo Force (KFOR).  As a result the Area Claims Officer (ACO) post moved 
from Bosnia to Kosovo to deal with the large backlog of claims held in abeyance until claims 
handling arrangements were agreed in Kosovo.  The ACO has retained responsibility for in-theatre 
policy and claims arising in Bosnia, Macedonia (where  we employ a local Claims Assistant), 
Albania and any Operation Agricola related claims in Greece.  There is, however, still a claims 
presence in Bosnia with the Claims Officer Bosnia looking after the many claims still arising in 
Bosnia and Croatia as a result of the on-duty activities of the Stabilisation Force (SFOR). 
 
Claims Office Bosnia. 
 
9.24 
The majority of claims still continue to be the result of road traffic accidents and associated 
injuries, particularly in the winter months due to the extreme weather conditions and the poor state 
of some roads.  A small number of property damage claims continue to be submitted, with the 
biggest current area of claims being connected to a Helicopter Landing Site (HLS) near Sipovo 
Hospital where 12 claims have been received from local residents for alleged structural damage to 
their houses which they blame on helicopters.  The HLS is, however, a multi National HLS and 
HQ SFOR in Sarajevo is currently investigating the matter further. 
 
 
32

9.25 
Three claims requesting compensation for the death of bees allegedly due to the destruction 
of ammunition were received in 2001/02.  All were found to be unsubstantiated, and following 
investigation and an expert entomologist’s report were repudiated. 
 
9.26 
The figure for claims recovered still remains at Nil.  However, the claims officer is actively 
pursuing five recoveries with the assistance of either the Croatian Government, or the Federal 
Ministries of Justice for Bosnia & Herzegovina or the Republic of Srpska, which all act on the 
UK's behalf in such matters.  Regretfully the process is expected to take some time. 
 
 
£350,000
 
600
 
500
£300,000
 
£250,000
400
 
£200,000
300
 
£150,000
 
200
£100,000
 
100
£50,000
  0
£0
 
98/99
99/00
00/01
01/02
98/99
99/00
00/01
01/02
 
Number of claims received
Amount paid
 
Number of claims settled
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 
321 
440 
288 
160 
Number of claims settled 
221 
208 
578* 
140 
Amount paid (£) 
325,000 
309,000 
265,356 
174,163 
Amount recovered (£) 
Nil 
Nil 
Nil 
Nil 
 
* Includes 125 Kosovo claims held in Bosnia until the Kosovo Claims Office was established in 
November 2001.  Also includes 241 claims connected to Glamoc, which were transferred to the 
MND(SW) Legal Adviser (see last year’s Claims Annual report for further details). 
 
Claims Office Kosovo. 
 
9.27 
Opened for business in November 2001, the Claims Office Kosovo faced an immediate 
workload of 220 claims that had been acknowledged and held pending  the signing of a claims 
agreement in Kosovo.  Whilst the KFOR Theatre Claims Policy document is still in draft form the 
Claims office in Kosovo have, along with many other Troop Contributing Nations, started to 
investigate, settle or repudiate claims for compensation based on MOD’s legal liability. 
 
9.28 
The majority of claims in Kosovo have been as a result of road traffic accidents, although 
there have also been a variety of property/land damage claims for such activities as EOD action on 
suspect vehicles, search patrol damage and weapon confiscations.  The difficulties faced by the 
claims office investigating claims, some dating back to June 1999, have included a lack of 
property ownership and personal identification papers for Claimants as many documents were 
destroyed by the Serbian authorities.  The situation is now improving as more individuals are 
being given UN ID cards and local land records are being re-created by the UN Mission in 
 
33

Kosovo.  Contacting Claimants two years after they submitted their claims has also proven to be 
an interesting challenge, but a media advert about the opening of the Kosovo Claims Office and an 
improving internal Kosovan postal system to outlying areas have brought many Claimants forward 
to enable further investigations of their claim to be carried out. 
 
9.29 
The claims office has, however, still had to physically trace several Claimants, including 
one from just a photograph of the Claimant standing in a damaged wheat field and a grid reference 
of the field on the side of  a hill.  However, the Claimant was successfully identified by making 
enquiries in nearby villages. 
 
9.30 
Recovery claims have just started to be presented to local Kosovan insurers, with one case 
so far successful.  We wait with interest to see what the ge neral response will be from insurers as 
further claims are submitted.  No other KFOR nation has, as far as we are aware, been successful 
with a recovery claim. 
 
 
£50,000
  350
  
300
£40,000
  250
 
£30,000
200
  150
 
£20,000
  100
£10,000
  50
 
0
 
£0
2001/2002
2001/2002
 
Number of claims received
 
Amount paid
Amount recovered
 
Number of claims settled
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002* 
Number of claims 



310** 
received 
Number of claims settled 



196 
Amount paid (£) 



49,084 
Amount recovered (£) 



459.29 
 
* Figures also include claims arising in Macedonia. 
** This figure is for all claims received in Kosovo since 12 Jun 99. They were not however 
registered or investigated until Nov 2001 onwards when the Kosovo Claims Office opened. 
 
 
CLAIMS OFFICE FALKLAND ISLANDS 
 
9.31 
The Claims Officer, Falkland Islands, has authority to handle common law damage claims 
up to a value of £5,000 per claim, through the Command Secretary British Forces Falkland 
Islands.  Claims are handled in accordance with local law which is almost identical to English law. 
 
34

 
9.32 
In the last year claims have included backing into other vehicles or unseen obstacles, the 
sun (which is unusually bright in the Falkland Islands) temporarily blinding the driver, and 
damage caused by fire alleged to have been started by Service personnel.  There have been no 
recoveries made in last year. 
 
£45,000
 
18
£40,000
 
16
£35,000
14
 
£30,000
12
£25,000
 
10
£20,000
 
8
£15,000
 
6
£10,000
4
 
£5,000
2
 
£0
0
98/99
99/00
00/01
01/02
 
98/99
99/00
00/01
01/02
 
Number of claims received
Amount paid
 
Number of claims settled
 
 
 
1998/1999 
1999/2000 
2000/2001 
2001/2002 
Number of claims received 

N/A 

17 
Number of claims settled 

N/A 


Amount paid (£) 
1,079 
N/A 
3,471 
44,797 
Amount recovered (£) 




 
 
 
SECTION TEN 
 
INSURANCE AND INDEMNITIES 
 
Insurance 
 
10.1 
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. 
 
10.2 
Claims branch 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. 
 
10.3 
Willis (Aerospace) provide insurance, which is self- financing, for four specific non-core 
aviation risks: 
 
 
35

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 
 
10.4 
Claims branch 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. 
 
10.5 
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 e.g. 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 an 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. 
 
10.6 
Claims branch issued around 92 indemnities in 2000/2001 and commented on a similar 
number of other indemnity issues.   
 
10.7 
Indemnities that arise from the Department’s contractual bus iness are the responsibility of 
the appropriate Commercial Branch, with policy guidance provided by the Defence Procurement 
Agency (Defence Commercial Policy 22). 
 
Wider Markets 
 
10.8 
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 need to 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. 
 
 
36

10.9 
Advice about insurance and risk reduction may be obtained from Claims branch 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 ELEVEN 
 
NOVEL AND CONTENTIOUS CLAIMS 
 
Mountain Climbing Injury 
 
11.1 
In 1995 an SAC, serving as a member of an RAF Mountain Rescue Team, was injured 
whilst on a training exercise, following an avalanche that occurred on the North East face of Red 
Tarn.  He suffered severe head injuries from which he has not fully recovered. 
 
11.2 
Solicitors representing the Claimant submitted a common law claim for compensation 
against the MOD, alleging that their client's injuries were sustained as a result of MOD negligence. 
The Claimant's case was in essence that the RAF Mountain Rescue Team should not have been 
training in the area on the day of the accident because the climbing conditions were foreseeably 
dangerous. In addition, it was alleged that the Claimant himself was insufficiently experienced to 
undertake the particular climb that day. The MOD disputed the Claimant's allegations of 
negligence and the case therefore proceeded to trial on 10 December 2001.  The Judge 
subsequently found in favour of the MOD and stated in his conclusion that he was satisfied on the 
evidence that neither the decision to climb the Red Tarn face, nor the choice of climb upon that 
face, was negligent. He was also satisfied that the Claimant was competent to undergo the climb, 
that it was proper for it to be taken unroped, and that the Claimant was properly supervised 
throughout.  The Claimant was therefore unable to recover damages.  Prior to the trial the value of 
the claim had been assessed by the Claimant's solicitors as being around £1.5 million. 
 
Slip Injury 
 
11.3 
The Claimant seriously injured his right leg after slipping on some liquid beside a drinks 
machine at the top of a flight of stairs in Rheindahlen, Germany.  Following the incident, the 
Claimant suffered spasms in his right leg and he was diagnosed as suffering from the extremely 
rare condition ‘stiff limb syndrome’.  This involves irregular muscular spasms, extreme sensitivity 
and persistent pain.  The injury led to the Claimant being medically discharged from HM Forces. 
 
11.4 
It was alleged that the MOD failed to clear up the spilt liquid or give adequate warning of 
the presence of the liquid on the stairs.  The claim was investigated, and following legal advice 
was accepted on the basis that contributory negligence played an important part in the accident.  
As such the level of damages paid to the claimant was reduced by 20% to reflect his contribution 
to the accident.  The claim was settled for £800,000. 
 
Exhaust Inhalation 
 
11.5 
The Claimant in this case alleged he was exposed to carbon monoxide fumes whilst 
carrying out duties as a wireless operator on Army exercises.  The radios were powered by the 
 
37

vehicle engines used in the exercise in which the Claimant was required to sit in the rear for long 
periods, operating the radios.  Exhaust fumes penetrated into the vehicles due to the rears of the 
vehicles being covered with a tent like structure thus restricting proper ventilation. 
 
11.6 
Following the incident the Claimant was medically downgraded before eventually being 
discharged from the Army.  The claim settled out of court when the MOD accepted an offer to 
settle for £24,000. 
 
Eye Injury 
 
11.7 
The Claimant was undergoing Close Protection Training prior to being posted to Rwanda.  
While participating in an anti-ambush exercise the Claimant was told by the officer in charge to 
dispense with his protective shooting glasses because bright sun light was causing glare.  Shortly 
afterwards the Claimant was hit in the eye by a particle discharged by the blank ammunition being 
used in the exercise.  Although the Claimant suffered from temporary loss of sight, he made a 
good recovery. 
 
11.8 
The subsequent Board of inquiry found that full protective clothing should have been worn 
to shield the face and to offer eye protection.  Proceedings were issued seeking provisional 
damages from MOD.  However, solicitors representing MOD argued that medical evidence did not 
fully support the claim, and the case was settled out of court for £4,500. 
 
Clinical Negligence  
 
11.9 
Parents claimed on behalf of their son who suffered from quadriplegic cerebral palsy as a 
result of clinical negligence at the time of his birth at a military hospital in December 1992.  His 
twin sister born a few minutes earlier had no such problems and indeed in later years was assessed 
as having a high  IQ.  Liability was accepted at an early stage and since that time matters 
progressed towards settlement.  The boy is totally dependant on others for dressing, personal 
hygiene, eating and drinking.  He is unable to speak and has little or no bodily control which 
severely restricts his mobility, and he will remain profoundly physically and developmentally 
impaired for the duration of his life. 
  
11.10  Numerous expert reports were obtained and it was clear that a number of heads of claim 
would not be in dispute and could be agreed without debate.  The main question to be answered 
was that of life expectancy which would greatly influence a very large proportion of damages by 
way of future care and loss of earnings.  A schedule of loss was received claiming in the region of 
£4.5 million.  The case settled by way of a Counsel-to-Counsel settlement conference for £3.6 
million which is currently the second highest value claim settled by MOD. 
 
Clinical Negligence  
 
11.11  The Claimant pursued a claim of clinical negligence for failure to diagnose an initial      
sub-arachnoid haemorrhage early in March 1992 which would have prevented a second 
haemorrhage some 17 days later which resulted in the Claimant suffering from paralysis of the 
right side of his body, the inability to speak in an intelligible form, a visual deficit and loss of both 
taste and smell.  Witness statements and experts reports were obtained and a conference was held 
in November 2000 with counsel to discuss liability and causation. 
 
38

  
11.12  Counsel initially advised that the claim should be defended on the basis of expert opinion 
and witness evidence.  A trial on liability was fixed in the Royal Courts of Justice for December 
2001.  Quantum would be assessed separately if the Courts found against the Department.  
Judgment was handed down in favour of the Department with an Order for costs against the 
Claimant, albeit the Claimant has been given leave to appeal the judgment. 
 
Back Injury 
 
11.13  While serving his last day at sea before leaving the Royal Navy, the Claimant was 
designated ‘swimmer of the watch’.  During a ‘man over board’ exercise the Claimant was being 
winched back on board ship and allegedly dropped on the deck, sustaining a serious back injury. 
 
11.14  The Claimant’s solicitors alleged that the exercise was ordered as a prank on his last day at 
sea, in poor weather and with inadequate manning.  Proceedings were brought against MOD 
alleging serious back injury and loss of future career in the Police Force.  The value of the claim 
was assessed in the region of £85,000 on full liability.  However, the Claimant was unable to fully 
prove his case on liability, and the case was settled for £4,500.    
 
Hand Injury - Exaggerated Claim 
 
11.15  The Claimant had attended an official function when he allegedly slipped on a polished 
floor and put his hand through a window.  Investigations carried out by the Unit appeared to 
support the Claimant’s version of events.  However, when medical evidence was received it 
included an extract of the notes made at the accident and emergency department of the hospital 
that treated him.  These indicated that the Claimant had given the cause of the accident as ‘been 
drinking, had argument with girlfriend, punched window’
.  The Claimant’s solicitors were 
subsequently invited  to discontinue the claim but argued that the hospital had made an error in 
recording their client’s remarks.  The solicitors were subsequently advised that the hospital also 
recorded the Claimant being seriously inebriated when he arrived for treatment.  The claim was 
repudiated, and nothing further has been heard from the Claimant or his solicitor. 
 
Back Injury - Exaggerated Claim 
 
11.16  The Claimant, a member of the TA, alleged that during an exercise he received a serious 
back injury and subsequent mental trauma.  The back injury was supported by medical evidence.  
The Claimant’s solicitor alleged that as a result of the injury their client had lost a future career in 
the TA.  It transpired, however, that the Claimant had attended TA camps following the accident, 
and had volunteered for an exercise that involved a skiing activity.  Investigations also revealed 
that the Claimant had tried to resign from the TA shortly after the accident, but when he found out 
that he would lose his bounty he withdrew his resignation.  The claim was settled on the basis of 
general damages for pain and suffering only. 
 
Electric Shock Injury – Exaggerated Claim 
 
11.17  While serving aboard HMS X the Claimant sustained an electric shock, and alleged that he 
had lost full use of his right arm as a consequence.  Legal proceedings were issued against MOD.  
Doubts of the extent of the alleged injury were raised, and surveillance of the Claimant was 
 
39

undertaken.  Video evidence taken during the surveillance revealed that the Claimant was 
exaggerating his claim.  The claim which had been originally valued at £67,000, was settled for 
£1,000. 
 
Clinical Negligence 
 
11.18  An Army Sergeant injured his back while playing volleyball in 1987.  He subsequently 
attended RN Hospital Haslar and underwent two operations in 1988.  Unfortunately neither 
operation relieved his back pain.  After further MRI scans it was suggested that an operation to 
fuse two of the lumbar vertebrae together could help. He agreed to the operation which took place 
at RNH Haslar on 20 July 1990.  The operation was unsuccessful and a high level of residual pain 
remained.  It was not until October 1990 at a post-operative clinic that he was told that the wrong 
vertebrae had been fused. 
 
11.19  The surgeon accepted that he had operated at the wrong level, although he did not 
understand how he came to do this.  To make matters worse, the bone graft involved did not 
consolidate, so the level of back pain actually increased.  A period of rehabilitation at Headley 
Court did not result in any noticeable improvement and the individual was later medically 
discharged on 1 January 1993.  He was offered the opportunity of a further operation, a triple 
fusion, but declined. 
 
11.20  Although negligence was accepted, causation remained to be determined.  MOD’s medical 
expert was convinced that not all of the Claimant’s symptoms were related to the failed operation 
and that he was exaggerating his condition.  As no agreement on quantum could be reached the 
issue of causation was the subject of a trial held in May 2000 where the Judge ruled in favour of 
the claimant.  The Claimant’s solicitors valued the case in excess of £1.25 million.  A Counsel-to-
Counsel conference was held in December 2001 and settlement was reached at £950,000. 
 
Clinical Negligence  
 
11.21  The Claimant brought a clinical negligence claim against two Service clinicians and MOD 
on the grounds that she received negligent treatment following spinal surgery resulting in 5 
decompressive surgical procedures to her lumbar spine.  These alleged incidents occurred at the 
British Military Hospital Rinteln during the summer of 1994. 
 
11.22  Numerous reports were obtained from experts from various medical disciplines in an 
attempt to determine liability.  Queen’s Counsel for the Department recommended that there was 
no evidence of clinical negligence in the treatment of the Claimant and that the matter should be 
fully defended.  The value of the claim on a full liability basis had been quantified in excess of 
£950,000.  The case was heard at Manchester Crown Court in October 2001.  The Judge found in 
favour of the Claimant in respect of a Breach of Duty but that the original trauma to the Claimant’s 
back and subsequent prolapsed disc resulting in four further back operations were found not to 
have been caused by the negligence of the MOD.  Compensation of £60,000 was agreed between 
the parties 
 
Employment Tribunal - Racial Discrimination 
 
11.23 
The Applicant, who is of Indian origin, claimed that he was subjected to race 
 
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discrimination whilst working at The Princess Mary’s Hospital RAF Akrotiri.  The Applicant’s 
complaint to the Employment Tribunal had two main elements.  The first was that following an 
alleged incident of misconduct between himself and an RAF Squadron Leader from the RAF 
Nursing Service, his Commanding Officer (an RAF Group Captain) had failed to discipline the 
junior officer.  His second claim was that his CO victimised him for complaining about the lack of 
disciplinary action by writing what were perceived to be disparaging remarks in his 1999 Annual 
Confidential Report (ACR).  The Applicant alleged that personal prejudice and racial bias 
motivated the CO’s actions.  It should be noted that the Applicant did not complain about this 
ACR at the time. 
 
11.24 
Legal advice on the merits of the Applicant’s case was that it should be contested on 
the basis that there was no discriminatory act by the CO.  The Applicant would have needed to 
show that, on the balance of probabilities, the CO treated him less favourably than others on the  
grounds of his race.  The Applicant was seeking in excess of £500,000 as compensation for the 
stress he suffered and salary losses. 
 
11.25 
When counsel for the MOD was instructed shortly before the hearing he raised the 
issue of whether the Tribunal had  jurisdiction to decide the case because the events occurred in 
Cyprus and the Race Relations Act 1976 does not extend beyond the UK.  Following legal 
arguments at the hearing, the Tribunal ruled in favour of MOD and said that it could not hear the 
case. 
 
11.26 
The Department is currently considering the legal and policy ramifications contained 
in the detailed and lengthy Tribunal determination.  The Applicant has decided to appeal the 
matter to the Employment Appeals Tribunal (EAT) and the application has  been listed for a 
preliminary hearing for 2 July 2002. 
 
Pristina Air Crash 
 
11.27  On 12 November 1999, a French-registered, but Italian operated, UN World Food 
Programme (WFP) ATR-42 civil aircraft crashed in cloudy conditions on its approach to Pristina 
airport, Kosovo.  All twenty-four people on board were killed, including three British aid workers.  
 
11.28  This was a complex case involving a number of parties who individually or collectively 
were involved in the accident and would have to contribute towards the compensation claims by 
the relatives of the deceased.  Therefore, in an attempt to avert the matter being heard by the courts 
(on which there were jurisdictional difficulties in view of the number of different nationalities 
killed), the World Food Programme invited the MOD to attend a series of without prejudice 
meetings of "interested parties" in Rome to begin to establish the potential for an out of court 
settlement of the relatives claims.  The Chief Claims Officer, MOD Legal Adviser, and an RAF  
Air Traffic Control expert represented the Department (with full support from the British Embassy 
and the UK Permanent Representative to the United Nations Food and Agriculture Agencies).  At 
the conclusion of negotiations which spanned several months the MOD contributed a sum which 
represented its involvement in the tragic accident. 
 
 
 
 

 
41

Cash Back 
 
11.29  Following an investigation by MOD Police it was alleged that over charging had taken 
place in a large number of contracts let by the Buying Agency to a specialist company for the 
supply and fitting of carpets and flooring to MOD establishments.  Exceptionally Claims were 
asked to pursue recovery action.  As a result Treasury Solicitor were instructed to commence 
further detailed enquiries and if necessary obtain Freezing Orders to restrict the owners of the 
company disposing of assets.  After very careful investigation and bringing the matter to the notice 
of the High Court a recovery of £400,000 was achieved. 
 
 
SECTION TWELVE 
 
LAW AND PRACTICE 
 
“The first thing we do, lets kill all the lawyers” 
Shakespeare, Henry VI, part II 
 
Civil justice reforms  
 
12.1 
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 
 
12.2 
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. 
 
12.3 
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 
 
12.4 
The aims of the New Civil Procedure Rules are: 
 
•  Litigation will be avoided wherever possible 
 
•  Litigation will be less adversarial and more co-operative 
 
 
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•  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 
 
•  The civil courts system will be responsive to the needs of litigants   
 
12.5 
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 cons ider adopting other methods of settlement such as alternative dispute 
resolution. 
 
12.6 
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 
 
12.7 
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 
 
12.8 
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”. 
 
 
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12.9 
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. 
 
12.10  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. 
 
12.11  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. 
 
Fast-Track and Multi-Track 
 
12.12  Personal injury claims will be assigned to either a fast-track or multi- track. 
 
12.13  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. 
 
12.14  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. 
 
12.15  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 
 
12.16  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 
 
12.17  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 
 
12.18  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 
 
44

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. 
 
12.19  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. 
 
12.20  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  
 
12.21  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. 
 
12.22  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 
 
12.23  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; 
 
45

 
•  a partner in control of a business; or 
 
•  a legal representative. 
 
12.24  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. 
 
12.25  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. 
 
12.26  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. 
 
12.27  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. 
 
12.28  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 a Senior Claims Officer. 
 
Disclosure  
 
12.29  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. 
 
12.30  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. 
 
12.31  A defendant is required to make a reasonable search for documents depending on: 
 
•  the significance of the document; 
 
•  the number of documents; 
 
46

 
•  the complexity of the case; and  
 
•  the ease and expense of retrieval. 
 
Disclosure Statement 
 
12.32  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. 
 
12.33  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
 
 
12.34  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. 
 
12.35  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. 
 
12.36  Accidents must be reported promptly and accurately with improvements made to document 
handling and availability. 
 
12.37  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. 
 
 
47

12.38  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. 
 
Legal Aid 
 
12.39  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). 
 
12.40  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. 
 
12.41  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 
 
 
ALTERNATIVE DISPUTE RESOLUTION AND COUNSEL-TO-COUNSEL 
CONFERENCES 
 
12.42  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. 
 
12.43  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 the courts.  An added 
 
48

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. 
 
12.44  In 2001/2002, for example, 11 major cases were settled by ADR or counsel-to-counsel 
conferences.  Had these cases run to court, the legal costs payable by the Ministry of Defence 
would have been significantly higher. 
 
Mediation 
 
12.45 
Mediation is a route strongly favoured by the Lord Chancellor as the way forward for 
civil justice in the UK, for cases where there is some evidence to support a claim.  However in 
cases where there is currently no evidence to support a claim, mediation would not be appropriate.  
The Department is signed up to mediation as a method of Alternative Dispute Resolution but as 
the Lord Chancellor’s Department’s Press Notice on the subject makes clear that Alternative 
Dispute Resolution is not appropriate in every case. 
 
12.46 
The mediation process employs an independent person (the mediator) to facilitate 
negotiations between parties in dispute in an effort to reach a mutually accepted resolution.  The 
process is voluntary, flexible, confidential and non-binding, and can be entered into and terminated 
at the discretion of either party. 
 
 
THIRD PARTY ACCIDENT SCHEME (ToPaS) 
 
12.47  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. 
 
12.48  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. 
 
12.49  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. 
 
 
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12.50  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. 
 
12.51  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. 
 
12.52  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 
 
 
HUMAN RIGHTS ACT AND SECTION 10 OF THE CROWN PROCEEDINGS ACT 1947 
 
12.53  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. 
 
12.54  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. 
 
12.55  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.  
 
 
 
 
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ANNEX A 
 
DC&L(F&S)Claims - Organisation 
 
Chief Claims Officer  - Band B1 
 
Senior Claims Officer (Claims Handling) - Band C1 
 
Responsible for Service Personnel Employer’s Liability Group, Public Liability Group and  
Clinical Negligence/Employment Tribunals Group 
 
Senior Claims Officer (Policy, Finance and Risk Management) - Band C1 
 
 
Responsible for Policy & Finance Group and Risk Management Group 
 
Policy & Finance Gro up 
 
Staff 
 
 
Indemnities & Insurance Adviser – Band D 
 
 
 
Assistant Adviser Indemnities & Insurance – Band E1 
 
 
 
Policy & Contracts Adviser – Band D 
 
 
 
Motor Transport Liabilities Adviser – Band D 
 
 
 
Budget Manager – 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. 
 
 
 
 
 
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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. 
 
 
Regulational claims policy 
Policy for Regulational claims, which are those received from employees for loss of or damage to 
personal property in the course of their employment.  The payment of claims is the responsibility 
of the TLB in which the employee works. 
 
 
Directorate administration 
 
Claims co-ordination and Focal Point (i.e. Registry functions). 
 
 
Service Personnel Employer’s Liability Group 
 
 
Staff 
 
 
 
 
Team Leader - Band C2 
 
 
 
4 Case Managers - Band D 
 
 
 
1 Assistant Case Manager - Band E1 
 
 
 
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. 
 
 
 

 
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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. 
 
 
 
Low flying 
Claims relating to military low flying activity in England, Scotland and Wales. 
 
 
Maritime claims 
Maritime claims including accidents, salvage, collisions and damage to fishing gear. 
 
Public Liability Group 
 
Staff 
 
 
Team Leader - Band C2 
 
 
3 Case Managers - Band D 
 
 
4 Assistant Case Managers - Band E1 
 
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). 
 
 
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. 
 
 
 
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. 
 
 
53

 
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. 
 
Clinical Negligence/Employment Tribunals Group 
 
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. 
 
Gulf Veterans’ illness 
Potential claims for alleged Gulf Veterans’ illness. 
 
Asbestosis
  
Claims from Service personnel who allege that they contracted asbestosis related diseases during 
their Service career  
 
Porton Down  
Claims from Service personnel who allege that they became ill as a result of taking part in tests at 
the CDE Porton Down. 
 
 
 

 
54

 
 

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 
 
Responsibilities  
 
 

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 (CRMWG). Risk management 
statistics. Claims and risk presentations 
 
 
Information technology systems 
DC&L(F&S)Claims information technology (IT) systems (CHOTS, RM database, RAPID, and 
CHASP). 
 
 
55

DC&L(F&S)CLAIMS STAFF, PROGRAMME AND OPERATING COSTS - FINANCIAL 
YEAR 2001/2002 
 
 
Costs
 
 
 

Operating Costs  

£1.08 million 
 
 
Programme Costs 

£91.26 million (compensation, legal costs, experts’ fees, 
 
 
 
 
 
etc.) 
 
 
Total Costs 
 

£92.27 million 
 
DC&L(F&S) staffing as at 31 March 2002 
 
GRADE 
ESTABLISHED POSTS 
ROLE 
 
 
 
B1 

Chief Claims Officer 
 
 
 
 
C1 

Senior Claims Officers 
 
 
 
 
C2 

Team Leaders 
 
 
 
 
 

18 
12 Claims Managers 
1 Budget Manager 
1 Policy & Contracts Adviser 
1 Insurance and Indemnities Adviser 
1 Motor Transport Liabilities 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 
 
 
 
56

 
ANNEX B 
 
 

TOP TWENTY CASES (BY VALUE) SETTLED BY DC&L(F&S)CLAIMS IN 
FINANCIAL YEAR 2001/2002 
 
“A lawyer with his briefcase can steal more than a thousand men with guns” 
 
  
 
 
 
CLAIMANT 
TYPE OF INJURY/LOSS 
COMPENSATION 
 
 
 
 
Civilian (child) 
Negligent treatment during birth resulting in the 
£3,600,000.00 
child suffering from Cerebral Palsy 
Civilian 
Claimant suffers from Cerebral Palsy 
£1,925,000.00 
Army 
Fractured spine while on duty leaving the claimant 
£1,635,000.00 
paraplegic 
Army 
Road traffic accident, claimant rendered 
£1,500,000.00 
paraplegic 
Army 
Claimant left brain damaged after negligent 
£1,115,000.00 
shooting 
Navy 
Wrong vertebrate fused together during operation 
£963,697.00 
Civilian 
Paid to dependent 
£850,000.00 
Army 
Claimant seriously injured after slipping on spilt 
£800,000.00 
liquid  
RAF 
Injured as a result of ejection following bird strike 
£750,000.00 
Civilian 
Suffered multiple injuries as a result of inadequate 
£500,000.00 
instructions 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£463,693.83 
Civilian 
Pristina air crash - dependency claim 
£401,064.16 
Civilian 
Pristina air crash - dependency claim 
£401,064.16 
Civilian 
Pristina air crash - dependency claim 
£401,064.16 
RAF 
Mid air collision - dependenc y claim 
£400,000.00 
 
 
57

 
ANNEX C 
 
TOP TEN (BY VALUE) SERVICE PERSONNEL EMPLOYER’S LIABILITY CLAIMS 
SETTLED BY ROYAL AND SUNALLIANCE PLC IN FINANCIAL YEAR 2001/2002 
 
 
 
TYPE OF INJURY/LOSS 
COMPENSATION 
 
 
 
 
 
Injured following aircraft collision 
£791,277 
 
 
 
Gun shot injury as a result of negligent discharge 
£523,884 
 
 
 
Injured following RTA 
£493,876 
 
 
 
Injury to passenger in vehicle involved in RTA 
£425,875 
 
 
 
Dependency claim as a result of RTA 
£374,707 
 
 
 
Injured following RTA 
£352,000 
 
 
 
Injured following RTA 
£304,642 
 
 
 
Head injury leading to epilepsy 
£256,274 
 
 
 
Non-freezing cold weather injury  
£227,778 
 
 
 
Injured during riot training 
£211,424 
 
 
 
58

ANNEX D 
 
 

TOP TEN (BY VALUE) CIVILIAN EMPLOYEE EMPLOYER’S LIABILITY CLAIMS 
SETTLED BY AXA CORPORATE SOLUTIONS SERVICES LTD IN FINANCIAL YEAR 
2001/2002 
 
 

 
 
TYPE OF INJURY/LOSS 
COMPENSATION 
 
 
 
 
 
Road Traffic Accident 
£1,772,339.74 
 
 
 
Severe spinal injury 
£1,115,278.11 
 
 
 
Road Traffic Accident 
£531,113.38 
 
 
 
Road Traffic Accident 
£238,247.90 
 
 
 
Road Traffic Accident 
£233,933.08 
 
 
 
Asbestos related disease 
£206,025.07 
 
 
 
Asbestos related disease 
£174,622.49 
 
 
 
Asbestos related disease 
£172,479.34 
 
 
 
Road Traffic Accident 
£172,190.01 
 
 
 
Dependency claim 
£171,896.94 
 
 
 
 
 
59

 
DISTRIBUTION LIST 
 
 
APS/Secretary of State  
 
APS/Minister(AF) 
DGNPSP 
APS/Minister(DP) 
DPS(A) 
APS/USofS 
COS/AMP 
Parliamentary Branch 
 
 
Hd NP Sec 
DPSO/CDS 
Hd NMA Sec 
PS/VCDS 
APC Secretariat (2 copies) 
CNS 
APC (Litigation) 
CGS 
Hd AMP Sec 
CAS 
PMA (CS) (RAF) 
CDL 
PM(N) 
 
PM(A) 
DCDS (C) 
 
DCDS (EC) 
D SEF (Pol) 
DCDS (Pers) 
CESO(Navy) 
DCDS (Pers) BMU 
CESO(Army) 
DCDL 
CESO(RAF) 
 
Ship Safety Management Office 
CinC Fleet 
H&S FOSF 
CinC Naval Home Command 
 
CinC Land 
Hd of GVIU 
AG 
GVIU 1 
GOC NI 
 
AOCinC(STC) 
D Fin Pol 
AOCinC(PTC) 
D RP(Centre) 
CJO 
D RP(Navy) 
CE/DPA 
D RP(Army) 
 
D RP(Air) 
PS/PUS 
 
PS/2nd PUS 
Surgeon General (2 copies) 
PS/CSA 
SGD AD BM 
Policy Director 
Medical Director General (Navy) – SO1 
Personnel Director 
AMD(Navy) 
Finance Director 
AMD (Med Leg) (2 copies) 
Science & Technology Director 
AMD (Legal) (RAF) 
 
Med Org 2(RAF) 
DG SP (Pol) 
SO1 Prev Med UKSC(G) 
D SP Pol(P&W) 
 
D SP Pol(Man) 
CE/ABRO 
D SP Pol(MW) 
CE/ABSDA 
D SP Pol(PA) 
CE/AFPAA 
D SP Pol(SC) 
CE/APC 
 
CE/ATRA 
 
60

 
CE/BFPO 
DGCP 
CE/DAC 
D CP Pol 
CE/DASA 
D CP ER 
CE/DARA 
AD IRU 
CE/DBA 
AD2 CEDU 
CE/DCSA 
D CP HRM 
CE/DDA 
D CP PA 
CE/DE 
AD CP Allowances 
CE/DGIA 
D CB(Pers) 
CE/DHE 
D CPM 1 
CE/DISC 
D CPM 2 
CE/DMTO 
 
CE/DSA 
DGMO 
CE/DSCA 
DGS&S 
CE/DSDA 
DGRP 
CE/DSTL 
D P&A 
CE/DTMA 
DG Info 
CE/DVA 
DGCC 
CE/HO 
DCCS 
CE/JARIC 
DCC(N) 
CE/MSA 
DCC(A) 
CE/Met O 
DCC(RAF) 
CE/MDPA 
 
CE/NMA 
MOD Legal Adviser 
CE/NRTA 
JAF 
CE/PPA 
JAG 
CE/RAF PMA 
CNJA 
CE/SCE 
DALS 
CE/TGDA 
DLS(RAF) 
CE/WSA 
 
 
Treasury Solicitor (5 copies) 
AD SC Ops(Tpt)4 
T Sol - Head of MOD Litigation 
SC Ops(Tpt)4d 
Robson McLean WS (2 copies) 
SC Ops(Tpt)4d1 
Crown Solicitor (3 copies) 
SC Ops(Tpt)4d2 
Chambers of: 
SC Ops(Tpt)4d3 
Robert Jay QC (5 copies) 
SC Ops(Tpt)4d4 
Ian Burnett QC (5 copies) 
WSA/620 
Philip Havers QC (5 copies) 
HQ Land Log Spt (Tpt) 
Stephen Irwin QC (5 copies) 
HQ STC S&M Pol 3e 
Association Of Personal Injury Lawyers 
HQNI CSS(Tpt) 
(5 copies) 
HQ BFC J4(Tpt & Mov) 
Beachcroft Wansbough Solicitors 
CSV (IPT) 
Berryman Lace Mawer Solicitors 
 
Merricks Solicitors 
LAIT RO2A 
Morgan Cole Solicitors 
DTMA Bus Tvl Man (Sfc) 
Prettys Solicitors 
HQRM WO1d 
Vizards Staples & Bannisters Solicitors 
Command Master Driver HQ LAND 
 
61

Lockharts Solicitors 
Command Master Driver HQNI  
Leigh Day & Co Solicitors 
Master Driver HQ 2 SE Brigade 
 
Master Driver HQ 49 Inf Brigade 
Royal British Legion (3 copies) 
SO3 Log Sp Catterick Garrison 
 
OC Log Sp Unit Colchester 
MOD Library 
TCWO HQ 42 Brigade 
House of Lords Library 
 
House of Commons Library 
Queen Victoria School 
 
Duke of York’s Military School 
CIVSEC/HQNI 
 
CS/HQ UKSC(G) 
HM Treasury – DDI Team 
CS HQ BF Cyprus 
CE/NHS Litigation Authority 
CS HQ BFFI 
Health & Safety Executive 
CS/Gib 
 
Hd Def Admin (BDSW) 
 
 
AXA Corporate Solutions Services (UK) Ltd 
Area Claims Officer NI 
Royal & SunAlliance plc 
Area Claims Officer North West Europe 
Willis Ltd 
Area Claims Officer Cyprus 
Betesh Fox & Co 
Area Claims Officer Kosovo 
 
Claims Officer Falkland Islands 
Chairman – CCSU 
 
 
Command Secretary Fleet 
Iain Duncan-Smith MP 
Command Secretary Naval Home Command 
Charles Kennedy MP 
Command Secretary Land 
 
Command Secretary AG 
All Claims staff 
Command Secretary Strike Command 
 
Command Secretary PTC 
File 
Civil Secretary PJHQ 
DG Resources DLO 
DG Resources DPA 
DG Commercial DPA 
 
 
 
 
 
62

Document Outline