Defence Reform Bill

Lord Craig of Radley Excerpts

Wednesday 5th February 2014 Grand Committee

Moved by

[Lord Craig of Radley]

12: After Clause 6, insert the following new Clause—
“Immunity for contractor
(1) The Secretary of State may by Order made under section 2 of the Crown Proceedings (Armed Forces) Act 1987 revive section 10 of the Crown Proceedings Act 1947 for the purposes of providing immunity for a contractor.
(2) Before making an order in accordance with the provisions of this section, the Secretary of State shall publish and lay before Parliament a report on the impact of making such an order on—
(a) the procurement of defence equipment and modifications and training facilities including material for urgent operational requirements; and(b) the possibility of risk to the contractor of challenge, whether under the Human Rights Act 1998 or under any other statutory provision, arising from such procurement, whether at the time of the procurement or at any future date.”

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[Lord Craig of Radley (CB)]

The House has debated the issue of Crown and combat immunity a number of times in the past eight months. The Minister has shared with the House concerns that the MoD and the Government have about problems raised by legal challenges of decisions made in the heat of battle or of decisions made in the past about equipment, training or preparations for operations in which, regrettably, individuals have been killed or seriously injured. In the debate on 7 November last, the Minister said that,

“the Ministry of Defence has been grappling with rapidly increasing numbers of legal claims arising from operations, together with escalating costs, largely as a result of these legal developments and the increasing willingness of individuals to litigate”.—[Official Report, 7/11/13; col. 413.]

He rightly stressed that no intention to reinstate any form of Crown or combat immunity should affect any cases already started, and nothing that I say or propose is directed at affecting such claims.

My particular reason for raising the issue of contractor immunity is straightforward. The experience of the past few years, particularly but not solely in the shadow of the Iraq and Afghan operations, is that courts and coroners have taken to raising issues about the suitability or modification states of equipment. I said at Second Reading:

“My fear is that this legal probing, basking in the certainty of 20:20 hindsight, will extend to questioning why original designs or modifications which subsequently proved unable to match the opposition’s capability were allowed to persist or be deployed or, alternatively, why additional steps had not been approved though the technical capability existed. Such concerns should be borne in mind in any changes to responsibility for defence procurement. Indeed, they should add further stimulus to taking positive action to reinstate immunities in a field of activity where acceptance of risk to life has to be the norm if our forces are not to be gravely neutered by legal hindsight”.—[Official Report, 10/12/13; col. 757.]

My amendment is designed to probe the case of contractor immunity and how and to what extent it might be applied. It proposes one particular approach but I do not suggest that it is the only or necessarily the most appropriate one. The Committee will have noted that Clause 3 would appear to provide a company that is or has been a contractor with unlimited MoD cover for any financial claim that is brought in a court in the UK against the company. However, this immunity is circumscribed by requirements in subsections (6) and (8) of this clause. Bearing in mind the frequency of claims and findings involving defence contractors, it seems that this sweeping, broad-brush approach should be further considered in the light of current experience. Would it not give rise to a good deal of cross-claims—no doubt of value to the lawyers involved—between the MoD and the delinquent company, possibly at considerable additional expense to the taxpayer and the Defence vote?

My probing amendment considers an issue of immunity away from the immediate battlefield—the clear domain of combat immunity—in an area of defence activity, notably procurement, that has led or might lead to legal claims by those injured while on duty or by the families of deceased service personnel. The Minister will recall in the case of the loss of RAF Nimrod XV230 in Afghanistan in 2006 that the review found that a number of individuals, including those in service, civilians and contractors, had been so seriously at fault as to bear responsibility for the technical failure that caused the loss of the aircraft and all those on board. Other more recent examples of aircraft accidents will be known to the Minister and other noble Lords, where the absence or incorrect fitting of specific equipment contributed to disaster. The coroner’s findings in the tragic death of a Red Arrow pilot, reported in the past week, is one of these.

With Crown immunity available to the MoD, as it was through much of my service career, service personnel or their families were entitled to compensation judged by the criteria that unless the MoD could prove that the injury or death was not due to service, the set rate of compensation would be awarded. This approach to proof was overturned by the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005. Now it must first be established that the injured or deceased were on duty at the relevant time before they are considered for any award or compensation.

This is a fundamental change in the burden of proof, in a climate where awards in civilian life appear to far outstrip those available to the Armed Forces. The Committee may recall the case of the typist with repetitive strain syndrome being awarded a couple of hundred thousand pounds in compensation. This has led to a growing number of claims being faced by the MoD in the recent past. Of course comparisons with civil awards can be misleading because in addition to a capital sum, guaranteed income payments, tax-free for life, may be awarded to those service men or women who are most seriously injured. Even allowing for that and for less extreme levels of civilian awards and for the recent increases in compensation for the most seriously injured service personnel, it is still the case that without court actions, service awards do not come close to matching those awarded to civilians. Excessive reliance is placed on the additional support of service charities. It is no wonder, therefore, that there has been an increase in claims against the Ministry of Defence. These might have been even greater if I, with the help of Lord Morris of Manchester, had not tabled and moved an annulment Motion to the Transfer of Tribunal Functions Order 2008, which persuaded the then Government to retain rather than abolish the dedicated tribunal that adjudicates on pension and compensation disputes for Armed Forces personnel.

For these reasons, I urge the MoD to be sure to put in place more representative entitlements if they go down the route I am proposing of providing immunity for the contractor in a GOCO set-up. At the heart of this is the fact that the training and operations of the Armed Forces cannot be totally risk free. Immunity coupled with more representative compensation where death or serious injury occurs is a better compromise. But because Crown immunity is now so circumscribed by statute in the Crown Proceedings Acts mentioned in the amendment, I have proposed a possible way forward if the concept of some specific contract immunity were to be favoured. Perhaps there is a better alternative, and I look forward to the Minister’s response. I hope that he will at least be able to reassure the Committee that the Government mind is not closed to the reintroduction of immunities at some future date in a manner that caters for both peacetime and conflict operations. The Armed Services Act renewal in 2016 would seem to be the right vehicle for making such a move. I look to the Minister for some reassurance on that since it could prove to be a more comprehensive approach than the one in this probing amendment. I beg to move.

[Lord Astor of Hever]

My Lords, I thank the noble and gallant Lord, Lord Craig, for his amendment. It enables the Committee to consider this important issue, which he also raised at Second Reading. Although the amendment appears to be addressed at giving the GOCO contractor immunity from liability for mistakes, I believe that the real intent behind it is to debate the important issue of combat immunity so far as it concerns our own service personnel. The noble and gallant Lord is absolutely right to identify the matter as one with profound implications for the conduct of military affairs in the future.

With that in mind, let me start by saying something about the recent Supreme Court case known as Smith (No 2). The outcome of the Supreme Court case in the conjoined cases of Smith and others v MoD, Ellis v MoD, and Allbutt and others v MoD has created a new situation of which the implications are not yet clear. These are all tragic cases of deaths on the field of combat in Iraq. The Government have every sympathy with the claimants but are obliged to defend these claims on important grounds of legal principle. Briefly, the argument of the claimants is that while these tragic incidents did indeed take place in the course of combat, combat immunity should not apply because the incidents can be traced back to previous decisions about the provision of equipment and training to the soldiers which could, they argue, have protected them more effectively.

The Government are concerned that this argument could be applied to virtually any claim to which the principle of combat immunity has hitherto been understood to apply and if accepted could have the effect of opening up the conduct of combat to the scrutiny of the courts after the event. This in turn could have seriously debilitating effects on the decision-making of commanders on the ground which could in the long run seriously impair this country’s military effectiveness. They therefore sought to have the claims dismissed by the courts on the grounds that combat immunity applied. As the Committee is aware, the Supreme Court declined to do so. This leaves the claims to be decided by the lower courts after a full trial in each case. Ministers and the military chain of command have been clear that commanders and other military personnel, at whatever level, who make reasonable decisions in good faith in the course of operations will receive the full backing of the services and the Government. It is important to be clear that there has been no decision by the courts that would suggest that they would impose liability in such circumstances.

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In conclusion, we have had a full and interesting debate on this issue. In the light of what the noble and gallant Lord said, I ask him to withdraw his amendment.

[Lord Craig of Radley]

I thank the Minister for responding. I am sorry that there was less interest in this matter than I thought the Committee might have taken. Nevertheless, the points that the Minister made are extremely important and will, I am sure, be read by many. There is no doubt in my mind that leaving the situation as it is is asking for further trouble. I hope that that point is well and truly taken on board in the Ministry of Defence. At this stage, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.