Select Committee on Defence Minutes of Evidence


Examination of Witnesses (Questions 240 - 257)

WEDNESDAY 13 MARCH 2002

RT HON ADAM INGRAM AND MR BARRY MILLER

Rachel Squire

  240. Can I turn to a couple of points of view on, perhaps, a rather less complex and contentious area, that is minor injuries, minor injuries that occur amongst serving personnel from which they make a full recovery and from which there is no later complications and they are able to continue their full military careers. The first point of view is, well you have certainly said, Minister, that the prime criteria in the Review is to concentrate resources on the worst effected in the Service, in the Armed Forces. In that case, why are you proposing new lump sum benefits for those who suffer minor injuries and then make a full recovery and are able to serve for the rest of their military career?
  (Mr Ingram) Because the lump sum payment is for pain and suffering. If an injury has occurred then the judgment would be made that they have a quantifiable claim and a lump sum is then paid. In the case you have given, where it is a recoverable injury—

  241. A fractured wrist.
  (Mr Ingram)—there is nothing for that because they made a full recovery, they can then carry on their active service career or gainful employment outside once they leave. A lump sum is paid for the pain and suffering due to an attributable injury.

  242. My other question is, I understand that servicemen and women are now able to take out their own personal accident insurance. Have you considered whether or not that is a more appropriate way to address such injuries and deal with the pain and suffering as a consequence?
  (Mr Miller) Yes, indeed Service personnel are able to take out their own insurance. That is not without its difficulties, because the insurance industry does find the extreme conditions of Service life sometimes a little difficult to cope with. We think it is right and proper that we should protect or we should offer the individual some compensation for the pain and suffering he incurs over and above what he may have made arrangements for and paid for privately.

  Rachel Squire: Thank you.

Mr Howarth

  243. Minister can we look at compensation for loss of earnings. I gather that under your proposals there will be payable a lump sum for pain and suffering which will be determined on a tariff system but, in addition, Service personnel who are severely disabled will receive a sum to cover potential loss of earnings. This will be calculated as a lump sum but paid in instalments as a guaranteed income stream (GIS). Are there any advantages for the recipient of a lump sum payment paid in this form of a GIS over a War Pension?
  (Mr Ingram) You mean instead of paying it as an income stream, paying it as another lump sum?

  244. It seems to me it is an income stream by a different name because it is a lump sum but paid in instalments I have got the formula here which was Appendix 1 to Annex E of your submission to us. It is a lot of hieroglyphics which as I am not a mathematician I do not understand.
  (Mr Ingram) I will refer you to a good mathematician but, Barry, you are qualified to deal with that.
  (Mr Miller) I certainly would not meet that particular criterion. We fully accept the arguments that have been advanced by the British Legion that it is undesirable to pay compensation for loss of earnings in severe cases as a lump sum because of the risk that the individual concerned may subsequently become dependent upon the state or on the charity.

  245. Because they cannot manage the lump sum?
  (Mr Miller) Because they cannot manage it. That is why we think it is appropriate that the compensation for loss of earnings should be paid as an income stream, in other words should directly replace the pension.

  246. Does this have any advantages over the existing War Pension Scheme which is paid in instalments?
  (Mr Miller) From the point of view of the individual it makes little difference. He will get the amount monthly, as it may be, and that is the key issue.

  247. It does look as though there are, as elsewhere, winners and losers. Let me put this to you: what enhancements will Service personnel who are medically discharged with attributable injuries receive under the proposed compensation arrangements compared with the present arrangements?
  (Mr Ingram) I would need to offer you a note on that. It is not the sort of thing I can put across the table?

  Mr Howarth: It would be wholly unreasonable of us to try and get you to answer detailed matters like that.

  Chairman: You have got a very good team behind you. Ladies, could you answer the question?

Mr Howarth

  248. Whilst I am working out some other questions perhaps your noises off can get busy and deal with that.
  (Mr Ingram) It is a better way if we reflect on the question and give you a written response. It is a bit unfair to suddenly get a piece of paper thrust into my hand and try and then interpret it. It is better to take the quality of the question and try and get a quality of answer.

  249. I have got two examples here of a winner and a loser. Rather than read it out now, may I write to you and ask you to respond to that?
  (Mr Ingram) You are recognising the danger of this. If the wrong answer is given on the basis of misinterpretation then it sets the wrong hare running. It is better we get the question and try and get a precise answer on that basis.

Mr Cran

  250. Can we move on to the processing of claims. It is an important issue if you happen to be someone who is claiming. The review document says that the aim of the new compensation scheme would be that most cases would be dealt with within a few weeks of submission, yet the Royal British Legion has told the Committee that under the present arrangement it can take anything from six weeks for a simple case to anything up a year for something rather more complicated. You have said in written answers to the Committee that you have not done the detailed work on this. When are you going to do the detailed work? If you could tell us that that would be useful. Secondly, what proportion of the claims under the present system are dealt with within these few weeks? Can you tell us that? Again if you do not have that information it is entirely understood; give it to us in written form afterwards.
  (Mr Ingram) On the administration of the scheme we recognise this is an important feature of the acceptability of the scheme in one sense but important also from the Department's point of view to show our duty of care has been properly played out, so there is an onus on us to put in place as effective and as quick a process as we possibly can put in place with all the attendant appeal mechanisms that flow from that. I well understand the concerns that if we put a new scheme in place, it is the same length of time, and it is not as quick and clean as we hope it would be. We have to make a very close examination of this to try and make it as efficient and effective as possible. As we speak—probably not as we speak because some of the people working on that are sitting behind me so they are not working on it at this precise moment but when they go back to their desks today they may be giving consideration to that. That is not a ministerial direction. I am sure they understand the point I am making on that. In terms of the statistics it is better to have a written response on that.

  251. What causes delays in settling claims at present and what confidence can you give us that the new system will improve upon that which it is replacing?
  (Mr Miller) Probably the single largest cause of delay is the need to obtain medical records and consider them individually. The reasons that we think we can improve on existing arrangements are fundamentally because a tariff scheme is clearly easier to administer and quicker to administer than one based on individual assessments. It is essentially a quicker process to decide which particular level of tariff it should be than a report which goes in detail into each condition. The second element that makes us we believe we can do better is because the Department's efficiency experts have been looking at the process and have suggested a number of ways in which improvements can be effected and they will be implemented on the existing schemes.

  252. The MoD memorandum says that "decisions will be taken by non-medical specialists ..." and so on. You know the paragraph. Does that lead me or you or anybody else to conclude that there will be less rigorous investigation of cases? What does "non-medical staff" mean? I know what that means but I want to know what is behind it?
  (Mr Miller) It was really just to not leave a misleading impression that decisions were entirely in the hands of the medical profession. The decisions are taken by the individual case officers who have access to medical advice where that is needed. In some cases it would not really be necessary. Quite frankly, if you are dealing with a case of amputation there is no need to employ a doctor. In other cases clearly you would need a medical view as to the nature and implications of the condition.

  253. Just so I can get this right. I have got it in front of me now, the MoD memorandum says under the new scheme "decisions will be taken by non-medical specialists ..." I thought your answer somewhat modified that.
  (Mr Miller) No, the decision is taken by the individual case officer who is not medically qualified. They will have access to medical advice where they need it.

Chairman

  254. We have seven minutes to go and four questions. To speed things along there is a question on the costs of social care that we will forward to you, Minister. There is a further question which I will briefly give and you can briefly answer on civil negligence claims. One of the aims of the Government is proposing new arrangements so that fewer cases would go to court but you have told us since that the consultation document was written without taking account of the civil justice reforms which took place in 1999 and which you now accept have had a significant impact on civil negligence claims. Can you tell us why a document published in 2001 was not able to take into account changes that took place two years earlier?
  (Mr Ingram) Barry will deal with this.
  (Mr Miller) Because we are not dealing with negligence cases. The cases that go to court will normally be cases that allege negligence. Obviously there we will reflect the procedures and practice, as indeed we do already in our approach to this. This was not focusing on that area and for that reason the changes in the court process does not really affect what we were proposing.

  Chairman: We have one last question. Kevan Jones?

Mr Jones

  255. It is around the reasons for this no-fault system. Also, I might add, you have obviously never dealt with many amputations because if you think one amputation is like another and somehow you do not need a medical assessment of what the disability is, you are mistaken. I find it horrifying that you are going to have unqualified people dealing with very complex issues like amputation, for example, because the consequences of those are very different in different situations. It does not bode very well if you think you can have unqualified people dealing with what might be very complex injuries. Is it not a fact that this scheme has been brought in because you have obviously had an increase in terms of civil negligence according to the figures you gave us which from 1997/98 to 2001 have risen by about 64 per cent? Is offering this fixed payment, no-fault scheme as an alternative to stop civil negligence litigation and also is it to stop the rising costs that are facing you and also could it, dare I mention it, even be a way of saving money?
  (Mr Miller) The straight answer to your question is no and no. There is no way in which this scheme will stand in the way of individuals who wish to take action against the Government for negligence. That avenue will be open. The reason for adopting no-fault compensation is to provide a system of compensation that does not oblige the individual to pursue us through the courts and all the stresses that that puts on them, which does not mean that they cannot do it if they wish to.

  256. Yes, but do you not also recognise in terms of civil litigation, certainly in my experience of industrial claims, that most of them never go to court anyway?
  (Mr Miller) That is perfectly true, yes, but nevertheless we think that no-fault compensation is a sensible approach, again given the particular things we ask of the Services rather than expecting the individual to demonstrate that there was some fault on the part of the Department.

Chairman

  257. Thank you. I can see now, Minister, why the process has been elongated somewhat. When one is looking at pensions and compensation it certainly raises temperatures and you have to get it right. We look forward to your follow-up memoranda. We will produce our report and no doubt we will meet you again after you produce your report to our report, so this saga will continue over a long period. Thank you very much to you both.

  (Mr Ingram) Thank you.





 
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