The Department of Defence expects to pay £85 million in compensation and costs next year to Army members suing for hearing loss. The Minister for Defence, Mr Smith, is due to report to Cabinet this month on the claims which could cost the Exchequer up to £400 million.
Yesterday's Estimates showed compensation claims against the Defence Forces by serving and former Army members accounted for the second-largest expense after pay. Provision for next year's compensation claims account for most of the estimated £50 million increase next year in non-pay spending by the Department.
A Department spokesman said: "The Minister will be submitting a memo to Cabinet in the next fortnight." Any proposals on the payment of compensation would "try to reconcile the public interest with the rights of those who have sustained serious hearing loss".
The Department has received around 10,000 claims and further claims are being received daily. At the end of last month, 807 cases had been settled out of court and 25 court awards had been made. A further 26 cases were successfully defended or withdrawn. The average settlement in claims paid this year has been £25,500.
Other increases in the Estimates include the allocation for ships and Naval Service equipment, up 78 per cent compared to this year. The contract for a new ship, expected to cost about £20 million, is due to be signed next month.
The Department will spend £16.3 million on ships and equipment in 1998, compared to £9.1 million this year.
Under the Defence Forces' voluntary early retirement scheme, the Department aims to reduce numbers from 13,000 in 1995, to 11,500 by the end of next year. Some £14.7 million has been allocated for buildings, mainly for the refurbishment of barracks.
