The Armed Forces Compensation Scheme

Page 99

PART II

ARMED FORCES COMPENSATION

Page 100

Page 101

Chapter 12

The Armed Forces Compensation Scheme

12.1 In March 2001, the government published a consultation paper¹

proposing new schemes to replace both the War Pensions Scheme and the Armed Forces Pensions Scheme.²Although the Defence Select Committee criticised the consultation process,³the government announced in 2002⁴that it intended to maintain the broad principles of its proposals. On 15 September 2003, the Parliamentary Under Secretary of State for Defence announced that the review process had been completed and that legislation would introduce a new Armed Forces Pension and Compensation Scheme in April 2005. A further report of the Defence Select Committee published in December 2003 recognised that the final proposals had taken account of many of the criticisms made during the consultation process, but expressed concerns about compensation awards being decided on the balance of probabilities and about the appropriateness of using tariff bands to determine the level of compensation payments.

12.2 The March 2001 Joint Compensation Review recommended that the War Pensions Scheme and the attributable benefits of the Armed Forces Pensions Scheme should be merged into a single scheme providing lump sum payments for pain and suffering based on a tariff of awards, with further payments for loss of earnings, calculated as a lump sum but paid in instalments as a guaranteed income stream. The time limit for submitting claims would be cut to 3 years, and claimants would have to prove on the ‘balance of probabilities’ that their

¹Ministry of Defence, Joint Compensation Review: A Consultation Document (2001).

²For the background to the consultation, see Social Security Committee, War Pensions Agency

Business Plan 1999–2000, Sixth Report of Session 1998–99, HC 377 (23 June 1999), paras 25–
27.

³Defence Select Committee, The Ministry of Defence Reviews of Armed Forces’ Pension and

Compensation Arrangements, Third Report of Session 2001–02, HC 666 (1 May 2002).

⁴Defence Select Committee, The Ministry of Defence Reviews of Armed Forces’ Pension and

Compensation Arrangements: Government Response, Fifth Special Report of Session 2001–02, HC 1115 (17 July 2002).

Page 102

102 War Pensions and Armed Forces Compensation – Law and Practice

condition was due to service. The Review described the core principles which the government considered should be central to the new arrangements as follows:

Fairness. The arrangements should guarantee a fair deal for all those who are entitled to compensation, and should in particular give due recognition to the needs of those most seriously disabled.

Simplicity. The arrangements should be simpler to apply and to administer, and easier for claimants to understand, the aim being that decisions on claims should in most cases be taken within a few weeks of their submission.

Modernity. The arrangements should as far as possible meet the best modern standards for compensation schemes.

Security. Compensation should be fixed at realistic levels, and for those most seriously injured who may be unable to work again should provide lifetime financial support. Employability. Awards should not act as a disincentive to those who are able to work, but should support those who could not do so.

Human Rights and Fairness at Work. The arrangements should be consistent with the Government's commitment to human rights and to being a modern and fair employer. Affordability. The arrangements should be cost effective, affordable, and fair also to the taxpayer.

12.3 Following a further period of consultation with service charities, the government announced its final proposals on 15 September 2003. The Ministry of Defence summarised the key features of the new Scheme as follows:

(i) All Service personnel injured on or after introduction would be covered (even if an individual remained in the then current Armed Forces Pensions Scheme), replacing the current War Pensions Scheme and Armed Forces Pensions Scheme attributable benefits.

(ii) The Scheme would provide a tariff-based lump sum award for pain and suffering. The tariff would have 15 levels of award, based on the Judicial Studies Board, Guidelines for the Assessment of General Damages in Personal Injury Cases,⁵and would be reviewed periodically.

(iii) It would offer a Guaranteed Income Stream (GIS) for life for those at higher levels of tariff (1 to 11) to compensate for loss of earning capacity. The value of the income stream would be set at different levels, dependent on the degree of loss of earning capacity caused by the disablement.

(iv) For an attributable death, a Guaranteed Widows’ Income Stream (GWIS) would be awarded. An additional attributable Widows’ Compensation lump sum would be paid for death in retirement. For deaths in service, the estate would receive a lump sum of four times pensionable pay from the pension scheme but, if three times

⁵Oxford University Press (edition unknown).

Page 103

pensionable pay plus £20,000 was a greater amount, the balance of that amount would be paid from the injury scheme. For children there would also be a children’s income stream.
(v) With immediate effect, provision would be made for registered unmarried partners (including same-sex partners) for all deaths resulting from service.

(vi) For the first time, in-service awards for injury for all would be paid for pain and suffering, including for injuries arising from warlike acts and terrorism.

(vii) The scheme would be designed to be administratively straightforward for the majority of claims and would be run by administrators with access to specialist medical and legal advice where needed.

(viii) The scheme would use the ‘balance of probabilities’...