New compensation scheme for victims of terrorism abroad

The system for compensating victims of crime has recently been given a boost following Gordon Brown’s 2006 budget, which has promised the creation of a new fund to support victims of terrorism. Under the proposed scheme an initial £1m will go towards the setting up of a charitable fund to support UK victims of terrorism both at home and abroad.

The Chancellor’s plans seek to address the current inequities suffered by UK victims of terrorist atrocities abroad who are excluded from compensation by the Criminal Injuries Compensation Authority (CICA), which provides only for those who have suffered harm within the UK.

The announcement was received with much relief. Since the September 11th attacks in the US in 2001, 45 Britons have been killed and many more injured in terrorist attacks overseas. A large number of these victims will have been left without any recourse to financial redress in their home country as many insurance policies contain clauses which exclude cover for losses in connection with terrorist atrocities.

The New Fund

The details of how the new fund will work are yet to be determined, with an announcement expected later this year, however concerns have already been raised as to whether the funds will be available to those who were caught up in terrorist activity abroad prior to the inception of the scheme.

The scheme is to be administered by the British Red Cross. It has been suggested that the fund will provide “rapid relief” in terms of immediate financial needs such as out of pocket expenses.

In addition, questions have arisen as to whether the £1m sum allocated will be sufficient, and whether the money might be better invested in providing emotional support services for the victims of crime.

Mr Brown referred to the £1m sum as an “initial endowment”, which could pave the way for further monies to be made available in the future.

Lack of funding

The insurance industry’s failure to provide for victims in the wake of a climate of an increased threat of international terrorism has prompted the families of British victims of terrorist attacks abroad to call for a levy on insurance companies to finance a compensation fund for victims of terrorism abroad, as well as the creation of a victims’ commissioner to represent their interests.

Given the size of the newly created fund it is only expected to provide for the immediate financial needs of the victims of terrorist attacks, and is only likely to cover initial financial losses incurred as a direct result of the attack rather than future losses such as loss of earnings or the cost of care.

Implications for the future

The new scheme is a significant development on the government’s previous stance that compensation should only be provided for criminal injuries sustained in the UK. The decision to create provision for victims of terrorist activities abroad may prompt calls for funds to be made available to victims of other types of crimes committed abroad on the basis that it is not the manner in which the injuries are caused but the extent of the harm suffered that should determine a victim’s access to compensation.

Once the finer details of the scheme are established it may become clearer when and under what circumstances such funds might be released.

Saira Habib
Leigh Day & Co
Limb Loss Legal Panel