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The Armed Forces Compensation Scheme: A Case for Reform

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About The Author

'Elizabeth Peters' (Guest Contributor)

'Elizabeth' served in Her Majesty's Armed Forces as an RAF Registered Nurse, serving in the Princess Mary's Royal Air Force Nursing Service. After a successful military career, she is following her dream of becoming a barrister, specialising in military law. 'Elizabeth' has graduated from law school and is currently completing her BPTC alongside her LLM. Outside the law, 'Elizabeth''s interests and hobbies include travelling, reading, writing and European history.

When you go to war as a boy, you have a great illusion of immortality... Then, when you are badly wounded the first time, you lose that illusion, and you know it can happen to you.

Ernest Hemingway

The compensation scheme mandated by the Armed Forces (Pensions and Compensation) Act 2004 (AF(PC)A 2004) – known as the Armed Forces Compensation Scheme (AFCS) – is heavily flawed. The scheme is in desperate need of modernisation to ensure that those who have sustained horrific life-changing injuries are compensated fairly and correctly.

This article takes a closer look at the current state of affairs, highlighting more specifically some of the main issues with the AFCS. It also suggests improvements that might be made to guarantee that those who suffered harm while fighting for their country receive the justice that they deserve.

Introducing the Armed Forces Compensation Scheme

It has long been accepted that a member of the armed forces who sustains an injury as a direct result of their service should be entitled to compensation. The UK has, over the years, implemented a number of schemes through which such compensation is provided. On 6 April 2005, the coming into effect of the AF(PC)A 2004 resulted in the implementation of the current scheme: the AFCS.

The AFCS is a no-blame compensatory scheme available to all members of the armed forces. Access to its benefits is contingent on only one requirement: that the service person proves that, on the balance of probabilities, their injury occurred as a result of their employment in the military. If they can do so successfully, the injured person should receive compensation in the form of a lump sum.

The AFCS operates using a tariff system, whereby the level of injury sustained will coincide with descriptors that dictate the amount of compensation to be paid. Underpinning this system is the idea that those with more severe injuries should be awarded more by way of compensation. Furthermore, depending upon the severity of the injury, the veteran may also receive a monthly tax-free, index-linked Guaranteed Income Payment (GIP) which is paid for life upon discharge to those more seriously injured. The GIP is not capped and it can amount to many thousands of pounds over a lifetime.

A Flawed Scheme: The Statistics

Concerns about the extent to which the AFCS was providing satisfactory compensation to veterans emerged from early on in its operation, after statistics showed that of the 525 claims put forward during the first 12 months of the AFCS’s operation, 260 were disallowed. That is nearly half of all cases being dismissed. The suggestion that such figures could be justified as teething problems has been disproved; evidence suggests that, of the 4,324 claims that were submitted in the 2016/2017 financial year, 43% were rejected. Reconsiderations of awards – and requests to reconsider – have also increased every year.

Notwithstanding these statistics, there are a number of key flaws with the AFCS. In particular, the Royal British Legion has highlighted both procedural problems with the AFCS – including the burden of proof and time limits – and substantive issues concerning the amounts that the AFCS can award compared to private litigation.

An Overhaul of the AFCS: Identifying the Fundamental Problems 

The Burden of Proof

A veteran claiming compensation under the AFCS must show that, on the balance of probabilities, their injury occurred as a result of their employment in the military, claims are decided on the balance of probabilities, with the onus on the claimant to make a case. This has been justified by the MoD on the grounds that this follows wider modern practice, including that in the civil courts, and that it will be the veteran themselves who have greater knowledge as to when and how a condition first arose, and the extent to which other causes may have contributed. Ultimately, it argues that meritorious claims, where there is reasonable evidence that a condition is due to service, will always succeed.

However, there are a number of reasons why the standard civil burden of proof is unsuitable for the AFCS. For one thing, members of the armed forces are required to be involved in situations of great uncertainty, where the effects on their well-being is uncertain. Armed Forces personnel can be required to submit in circumstances of some urgency to unusual medical precautions – combinations of vaccines, for example – and to experience unusual situations both on and off the battlefield. It may not be entirely clear either during or after the event what those precautions and situations involved, let alone what their consequences might be for the health of personnel, even given the ever-advancing state of modern medical knowledge.

Furthermore, aiming to equalise the positions of civilians or veterans is not sustainable: compensation is simply a different issue. After all, there is one essential difference between the armed services and almost all other employment: members of the armed forces can be asked to put themselves in harm's way – and even die – for their country. Furthermore, unlike for civilians, the medical records of veterans are held by the employer against whom they are claiming compensation.

From a practical perspective too, placing the burden of veterans ignores the fact that it may be hard for them to provide – or indeed locate – reasonable and reliable evidence: this may be due to gaps in the MoD’s medical records, or gaps in medical knowledge on the cause of many illnesses.

Time Limits for Claims

Under the AFCS, a person must usually make a claim within five years of the injury occurring. However, where an award has already been made, but the condition deteriorates, the time limit imposed by the AFCS is 10 years The MoD justifies this by arguing that the intention of the AFCS is that “awards should be full and final.’ Observing that there is a provision for reviewing and revising an award in exceptionally cases where the injury has unexpected consequences outside of the expected prognosis, the MoD argues that:

A time limit of 10 years from the date of the award was introduced to allow sufficient time for any departure from the expected course to be detected but would also protect the Scheme from paying for developments that are unrelated to Service (such as age-related effects).

Nonetheless, the use of a time limit has been criticised by the Royal British Legion, which views it as an unnecessary restriction that causes particular problems for veterans with deteriorating conditions. Time limits restrict claims for late-onset illnesses (provision for recognised conditions) and cause particular problems for amputees, who typically develop problems at a later stage.

Value of Payments

The value of AFCS awards has been the focus of much media attention, particular comparisons between AFCS lump-sum awards the payments made in civil claims before the courts. The MoD argues that these comparisons do not account for Guaranteed Income Payments (GIPs) or the fact that the AFCS is a no fault scheme.  

However, some of the data produced by the Royal British Legion shows marked differences that cannot be justified: for example, a claim that won £1,510,204 in the civil courts would have attracted £461,193 under the AFCS. Furthermore, a veteran who sustained a psychiatric injury like PTSD would receive £3,000 compensation as an AFCS claimant, but – following the successful civil claim in court – could see their award rise to a possible maximum of £80,000.

Such incorrect awards of compensation under the AFCS has now been tackled by the judiciary. In both Secretary of State for Defence v PQ [2014] and Secretary of State for Defence v Lance Corporal (Now Corporal) Duncan [2009], the courts sided in favour of two servicemen who argued that their compensation awards should be substantially increased to reflect the severity of the injuries sustained.

This is because there are heads of damage included in the civil claim which are not taken into consideration for AFCS awards, including loss of pension, future care and case management, respite care, occupation therapy, accommodation and housing adaptations, increased holiday costs, physiotherapy, computer and software requirements. As a result, it appears that the Ministry of Defence (the MoD) is ignoring the well-cited legal principle that compensation should restore the claimant to what his or her financial position would have been before their injury.

Indeed, because of this discrepancy, Hilary Meredith has argued that if AFCS is not going to compensate on a par with the Ogden tables – which, pursuant to Section 1 of the Damages Act 1996, are used to calculate the lump sum compensation due to claimants in personal injury and fatal accident cases – then “compensation” must be removed from its name.

Providing Reasons for Decisions

Claimants are increasingly attempting to access their AFCS file under the Freedom of Information Act 2000 (FOIA 2000) by sending a Subject Access Request (SAR) form to try and gain insight into the MoD’s decision-making under the AFCS. When such a form is sent, the FOIA 2000 requires the requested information be returned to the claimant by no later than 40 days.

However, for SAR requests relevant to the AFCS, the rate of return is so slow that the MoD were approximately 3 - 4 months behind: the average waiting times for claimants was reportedly 219 days in 2014. This could be disastrous if a litigant is representing themselves at an appeal that requires paperwork to be submitted by a specific date to the court and the opposing side.

The delays the returning of these SARs appear to be due to a combination of two factors: a lack of staff and resources for the implementation of the AFCS and the ever-increasing number of cases. Arguably, recent redundancies at the MoD have also played a part too. Either way, it has resulted in the Sir Jeremy Sullivan – the former Senior President of Tribunals – admitting the need for more judges to be allocated to AFCS hearings to tackle the problem.

Resolving the Underlying Issues

The reforms that would be necessary to successfully overhaul the AFCS are quite substantial, such that it would likely be impossible to comprehensively cover them all. Some could be implemented instantaneously, such as doing away with time limits or switching the burden of proof back to the MoD, as it was the War Pensions Scheme. Some, however, are more deep-rooted.

Increasing Efficiency

It has been well-documented in the national media – and complained about by lawyers who specialise in military claims – that there is lack of efficiency in the operation of the AFCS. While the government website states that appeals are heard within 4 months, figures show that – in reality – it takes over 11 months for appeals to clear. This is unfair: after all, with claimants having to already wait over six months for a response to their claim, adding on an appeal process means that the entire process can take around two years. This runs the risk of causing injustice, particularly in relation to information requests or where a deadline for meeting a time-limit is looming.

A number of solution are open here. A clear time-frame by which the MoD must provide a full response to a claim must be established, with penalties incurred upon failures to do so. Unnecessary delays could be bypassed if the suggestions of the Lord Boyce report are followed, whereby if vital evidence – whether it be AFCS documentation or medical evidence – which is not detrimental to the case is missing, it is presumed to exist. The courts must also shoulder some responsibility: following the suggestion of Sir Jeremy Sullivan, the Senior President of Tribunals, the court must ensure that appeals to awards made under the AFCS are heard considerably sooner.


The MoD should be far more transparent about the operating of the AFCS. For example, it should openly publish statistics that are current and up-to-date, to ensure that those operating the AFCS can be held accountable to the public. It should be far easier to find information relating to the compensation that a veteran will be entitled to; at present, there is a lack of certainty that contrasts starkly with the Ogden Table.


It is clear that a number of elements of the AFCS need reform; the changes proposed are vital to ensuring that the system delivers justice to those who have put their lives on the line for their country. Indeed, it must not be forgotten that ensuring that a functional and fair compensation scheme exists for injured service personnel is not purely about the money; it is also an expression of gratitude towards these veterans for what they have risked, and an acknowledgement of what as a result of the injuries they have suffered in the line of duty they have potentially sacrificed. 

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Tagged: Justice, Personal Injury

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