The huge liability facing the State over the compensation claims by military personnel for hearing damage will be substantially reduced following a Supreme Court judgment yesterday.
Some 10,178 military still have outstanding cases before the courts seeking compensation for alleged hearing loss.
On the basis of the judgment, the State now faces a further compensation bill running into tens of millions to settle the outstanding cases, possibly as much as £100 million. However, the bill had been projected to be as much as £1 billion, based on previous in the High Court. The State has paid out about £100 million in awards and legal fees so far.
It is expected the Minister for Defence, Mr Smith, will move quickly to establish a military compensation board to handle hearing damages claims in order to reduce the amount being paid on legal fees. Yesterday he said the judgment would save hundreds of millions of pounds for the taxpayer.
The amount of compensation paid so far is £73.2 million. However, the average settlement has reduced each year since 1996 because of a successful legal campaign by the Department of Defence. The average settlement in 1996 was £30,874, falling to £23,853 in 1997, £17,367 in 1998. The average this year is £11,970. The State has paid £26.04 million in legal fees.
The Department of Defence's successful appeal to the Supreme Court was in the case of Pte Kevin Hanley, of Limerick, who was awarded £50,575 for what was found to be a 9 per cent hearing loss. The Department was seeking a reduction to a settlement level which gave claimants about £1,500 per percentage hearing loss.
The reduction in average settlements in the courts, and the effect of the Supreme Court judgment that favours lower awards, is likely to encourage military personnel to opt for an out-of-court settlement scheme that does not entail the same risk.
Mr Smith said yesterday he now had the opportunity to set up an out-of-court settlement scheme. He said such a scheme would also ensure all genuine claimants were dealt with in a fair and equitable manner.
The main soldiers' staff association called on the Minister to set up a "transparent, independently administered solution to the Defence Force hearing damage issue".
The Permanent Defence Forces Other Ranks Representative Association (PDFORRA) said: "The time is now opportune to make an offer to those with hearing damage that will entice them away from their legal advisers and into a non-adversarial environment.
"An independent solution is needed to deal with the mistrust that has arisen in this area, to minimise cost and to ensure that whatever scheme adopted is workable and eventually successful."
The Fine Gael spokeswoman on defence, Ms Frances Fitzgerald, said the hearing cases had created huge bills for the taxpayer and "huge fees" for the legal profession. She said the Government must now move swiftly to set up a State claims agency and a compensation scheme to deal with the outstanding claims.
"The whole costly saga has undoubtedly damaged the Defence Forces and undermined public confidence in them. It is most notable for the huge bill it has created for the taxpayer and the fees it has earned for the legal profession," she said.