The cost to the State of Army personal injury claims will greatly exceed the amount provided for in court settlements because of the need to provide for disability pensions.
In addition to their normal pension entitlements, soldiers who have received compensation for hearing loss or other injuries may apply for a disability pension on leaving the Army. Normally, full pensions are paid after 21 years of service, but if a person leaves on medical grounds, he/she can receive a reduced pension, along with disability benefits, after 12 years.
The Minister for Defence, Mr Smith, yesterday estimated the court cost of personal injury claims in this year alone at £85 million and said the total cost could come to £500 million on the basis of the flood of cases being taken. Some £200 million of the £500 million would be paid in legal fees, he said.
"If this was to continue, Ireland Inc would go down the drain very fast," the Minister said on RTE radio. He spoke about capping compensation awards, fighting more cases in the courts, establishing an Army compensations board and introducing a ban on certain kinds of advertising by solicitors.
Agreement between the Department of Justice and the Law Society on the banning of certain types of "ambulance chasing" adverts is expected to be reached shortly and, according to an official spokesman, may be in place within a month.
Progress is also being made by a hearing assessment group within the Department of Health on the establishment of tests dealing with hearing handicap and a report may soon be supplied to the Minister for Defence.
Mr Smith confirmed that the Government was examining the possibility of constitutional change to address the problems generated by "a minority of legal firms" which regarded cases against the State and the taxpayer as "a lucrative goldmine".
The Minister said he knew of one case where an Army doctor had to "run a solicitor out of a hospital ward " where he was looking for business.
There was a minority of legal people who were "scavengers of hospital wards and who patrol such beds".
He faced an enormous task in trying to halt this tide of litigation, the Minister said. Some £85 million had been set aside to deal with costs this year, but the 11,500 cases on hand were growing by 600 a month and were likely to rise to 18,000 by the end of the year.
The cost of such cases had averaged £50,000 in 1996 and £40,000 in 1997 and he hoped to reduce the costs further in genuine cases, Mr Smith said.
There was no official indication yesterday of the long-term effect of such compensation awards on Army costs, in terms of the provision of disability pensions in addition to normal pensions, and the possibility of early retirement.