The Department of Defence fears the development of another "minor industry" in Army compensation if a case claiming posttraumatic stress disorder is successful in the courts.
Mr David O'Callaghan, Secretary General of the Department, told the Committee of Public Accounts yesterday that a reserved judgment in this case is expected within the next two weeks.
"An upcoming phenomenon, post-traumatic stress disorder, is small but growing," he said. "There is a reserved judgment expected. If that goes against us, we could face another minor industry."
Mr O'Callaghan also told the committee that the department was taking a test case appealing against a recent award in an Army deafness case.
He said the department had obtained an adjournment of cases from February to May last year in order to bring in legislation which required judges to take notice of the "Green Book", which defined levels of deafness.
This was followed by a judgment, the Green judgment, which awarded £3,000 for a 2 per cent hearing loss, and the department was "reasonably happy" with that.
If this set the norm, it would be looking at a liability of between £200 and £250 million, which was a vast improvement on the previous estimates of billions of pounds, he said.
A later judgment, the Hanley judgment, resulted in an award which multiplied the Green judgment, and would, if it became the norm, lead to a liability of about £1 billion, according to Mr O'Callaghan.
"We are now bringing forward another test case. It's simply too high. The judiciary are too generous for little or no damage," he said.
Asked if there was a big variation from judge to judge, he replied: "Yes. In October a 43-year-old with zero handicap, who would have been entitled to £6,000 or £7,000 under Hanley, got £16,000. "Someone with a 2 per cent handicap got £45,000. People with no entitlement under Hanley have got £5,000."
He said the cost of awards was coming down, but this was probably because the quality of the cases was not as good as those which were taken initially. An analysis of the cases taken in 1998 showed 21 per cent of them had zero disability under the Green Book, while among the cases coming in now, 54 per cent had zero disability, according to this method of assessment.
Referring to a case earlier this week in which a former Army bandsman was awarded almost £44,000 for hearing loss and reduction of quality of life, he said the department was found liable for not providing acoustically suitable places for practice.
He said the band played in halls all over the State in which there were no proper acoustics. He agreed with a suggestion from the committee chairman, Mr Jim Mitchell TD, that the judgment could, if taken to its logical conclusion, lead to the cessation of this activity and even the disbandment of the Army bands.