Annex C – Development and implementation of the injury to feelings scheme

C1 6 November 2006: Counsel’s advice to the MoD on damages following the Elias case

‘1. Applicants who were not British subjects at internment and applicants who are of UK national origins Section 1(1)(b) of the RRA [Race Relations Act 1976] makes it a statutory tort to apply to person X a “requirement or condition” which he applies or would apply to persons not of the same racial group but (i) which is such that the proportion of persons of the same racial group as X who can comply with it is considerably smaller than the proportion of persons not of the same group as X who can comply it; (ii) which he cannot show to be justifiable; and (iii) which is to the detriment of that other because he cannot comply with it.

‘Elias clearly satisfied sub-paras (i) and (iii). The only question in that case was under sub-para. (ii): justification. Elias is therefore authority for the narrow proposition that the birthlink is not justified. In the light of that finding, it would be unlawful to apply it to anyone, irrespective of their national origins. But that does not mean that anyone whose application was or is rejected on birthlink grounds is entitled to succeed in a claim under the RRA Sub-para. (i) will simply not be satisfied in a case where the claimant is of British national origins. Applying a discriminatory criterion will not give rise to a claim by a person who is of British national origins (unless such a person is a member of some other group to which s. 1(1)(b)(i) applies). Such a person has been rejected despite the application to him/her of a criterion which was disproportionately favourable in racial terms.

‘The requirement of “detriment” in sub-para. (iii) was considered by the Court of Appeal in Coker v Lord Chancellor [2002] IRLR 321. In that case, two women brought complaints of indirect discrimination against the Lord Chancellor in respect of the process for appointment of a special advisor. The ET [Employment Tribunal] found that the Lord Chancellor had discriminated on grounds of sex against one of the complainants who, but for the discriminatory condition, would have been a realistic candidate for the job. The other applicant had suffered no detriment because, even though she had had the same discriminatory condition applied to her, she was “not remotely appointable”. Although the precise meaning of “detriment” was left in some doubt, the CA [Court of Appeal] was in any event clear that the ET [Employment Tribunal] had been right to reject the claim by the unappointable candidate. It held as follows:

“It would be in obvious conflict with the legislative scheme if persons who were not qualified for the appointment, and thus not in the pool, were able to complain that they had suffered detriment as a consequence of the requirement or condition.”

‘That same reasoning would, in my clear view, mean in our case that applicants whose applications who were not British subjects at the time of internment are in no position to complain of discrimination, even if the reason why they were rejected was the birthlink. Even if they have had applied to them a discriminatory requirement, they have not suffered a detriment because of it because, like the unappointable complainant in Coker, they stood no chance anyway.

‘There is, as far as I a[m] aware, no case law on the slightly differently worded provisions of s. 1(1A) which requires the victim to have been put at a “disadvantage” rather than subjected to a “detriment”, a provision which may or may not apply to the facts of this case (depending on the correctness of the argument about the applicability of the Directive and the breadth of “social advantage” currently being taken in Mohammed). But, even if the Directive and s. 1(1A) do apply, I consider it likely that the courts would apply the same approach to s. 1(1A) as they have to s. 1(b)(iii) and hold that an applicant who had not been a British subject at the time of internment had not been put at a disadvantage whatever the actual basis on which his/her application. My view is shared by the authors of Tolley’s Employment Handbook (18h ed.), p. 172.

‘2.“National origins” I would advise strongly against giving any sort of gloss on what constitutes “UK national origins” to unrepresented claimants. I regret that I see no way round having a lawyer consider each and every case where the applicant considers that he/she is of non-British national origins. From your suggested text for unrepresented applicants, I would remove the sentence beginning “Since the birthlink criteria were held to be biased …” in its entirety and I would also remove the whole of the second paragraph. At the end of the last sentence in the first paragraph, I would add “or otherwise entitled to make a claim for indirect discrimination under the Race Relations Act 1976”.

‘For the solicitors, the suggested text is admirable, though I would again remove the sentence starting “Since the birthlink criteria were held to be biased …”

‘3. Defences The first defence is that provided by s. 57(3). The argument we considered in Elias was actually a different one. We considered whether it could be argued that indirect discrimination attracted the s. 57(3) defence even if it was covered by s. 1(1A), provided that it was also covered by s. 1(1)(b). That argument would have been very difficult (if not impossible) because of s. 1(1C). What we did not consider was the impact of the ECJ [European Court of Justice] case law (Baldinger) on our ability to say that a scheme of this type is not covered by s. 1(1A) at all. I think the point (which we are in any event arguing in Mohammed in January 2007) has reasonably good prospects of success, which I would put at 65%. The failure to take the point in Elias would have no impact whatever on the prospects of our winning the argument.

‘As to the prospects of making out the s. 57(3) defence, there are a number of imponderables and things could go wrong depending on who we (and they) called to give evidence. There is also the somewhat unpredictable nature of the county courts to contend with. That said, I have considered the evidence very clearly and my view is that we did not intend to discriminate on grounds of race. The best they have against us is [...]’s memo and I think if anyone had considered that he was making a legal point, they would have stopped the matter from proceeding. I would put the chances of success on the s. 57(3) point at about 60%.

‘It should be borne in mind that we have to succeed on both the inapplicability of the Directive and the s. 57(3) point to win.

‘The second defence is limitation. I think that there is a relatively strong argument of principle that the courts should not permit parties to bring claims late simply because they were improperly advised (or not advised at all) on the state of the law. However, the county court has a wide discretion under s. 68(6) RRA to extend time it is considers it “just and equitable” to do so. It is therefore hard to predict what a county court would do. Doing the best I can, I would put our chances of success on an argument that claims made more than 6 months after the first instance judgment in Elias at about 55%.

‘4. Damages A cause of action for race discrimination passes to the personal representative of the deceased person. Thus, claims can be either started or continued by personal representatives on behalf of deceased persons.

‘5. S.71 RRA Compliance with the s. 71 duty will require the writing of a reasonably comprehensive report (preferably by a person with race relations and some legal experience) considering, in relation to each of the extant criteria for the civilian scheme (the military scheme will no doubt have to be considered i[n] the light of Mohammed);

1. the extent to which the criterion may disproportionately affect persons of particular groups – here, other aspects of “race” than national origins will need to be considered, but the starting point should be that a criterion designed to differentiate those who have a close connection to the UK from those who do not is bound to have a disparate impact on those of non-British race (in the narrow sense), non-white colour, non-British ethnic origins etc.;
2. the reason why statistics are not available and why (if this is the conclusion reached) it is thought not worthwhile getting them at this stage (i.e., presumably, that it the Govt is prepared to proceed on the basis that its criteria, even those extant after Elias, do have a strongly disparate impact);
3. the views of ABCIFER and others;
4. the degree to which the courts have said that the criterion (or criteria in its general class) is (are) justified;
5. other arguments for justification;
6. the degree to which such criteria may adversely affect the statutory objective of promoting equality of opportunity and good race relations even if they do not otherwise offend against the RRA.

‘Please come back to me if I can elaborate further on any of this.’

C2 5 December 2006: Internal MoD paper to Permanent Under-Secretary advising on options around the potential payment of damages to civilian Far East prisoners of war subject to indirect racial discrimination as a result of the ‘bloodlink’ criterion

‘DAMAGES FOR CIVILIAN FEPOWS

‘Reference:

‘A. My e-mails of 24 and 28 Nov B. PS/USofS e-mail 30 Nov

‘Issue

‘1. Following Minister’s meeting with legal counsel on 30 November, you asked me to expand on my earlier advice (Ref A) regarding the potential payment of damages to civilian FEPOWs who were subject to indirect racial discrimination as a result of the birthlink criterion.

‘Timing

‘2. Priority. Claimants’ lawyers are expected to have started preparing their cases and will be incurring costs. We should also make our position clear so that other claimants can decide what action they might wish to take.

‘Recommendation

‘3. Minister to note the arguments and indicate whether he accepts that on balance we should oppose the full payment of damages.

‘Background

‘4. The Minister is familiar with the outcome of the Elias case which found that the birthlink criterion had resulted in unlawful indirect discrimination and which upheld a county court judgment that we should pay damages to Mrs Elias of £3K plus interest. The extent of the liability is discussed below but, briefly, a total of 1194 claimants were rejected under the birthlink. Some of these will not have a case for discrimination and others are likely not to pursue the matter. However, we know that there is an expectation among some of those affected that they will be entitled to damages in the same way as Mrs Elias, and many of these are likely to pursue their claims for damages.

‘The Legal Arguments

‘5. Counsel’s advice is that we have a better than evens chance of resisting payment. He has put forward two arguments which were set out for the Minister at the meeting on 30 November. To summarise:

• Out of time. A large number of the potential claimants are out of time to make a claim since they should have claimed within 6 months of it becoming clear that the birthlink criterion was discriminatory. This is vulnerable to arguments about when exactly it became clear and in any case the courts have the right to waive the time limit, which they may be sympathetic to doing given the age of the group involved. Counsel’s view is that on balance the courts would not extend time – at least in relation to claims brought more than six months after the first instance decision in Elias.
• Unintentional Indirecet [sic] Discrimination. The second and stronger argument depends on a reading of cases heard in the European Court of Justice. A court could be expected to find that damages were not payable if it could be shown that: (a) the discrimination was unintentional; and (b) the benefits concerned were not ones of a form giving social benefit. The view of counsel is that we would be reasonably likely to succeed on both these arguments.

‘6. Overall, Counsel’s assessment is that there is a 55 – 60% chance of winning on these arguments in the County Court. This is in the context that Counsel has also indicated that 80% is the percentage which (taking account of inherent litigation risks associated even with strong cases) would apply in a case with very good prospects of success.

‘The Financial Aspects

‘7. We currently have an application from the solicitors that represented Mrs Elias for a similar payment of damages to eight other claimants that they represent. These are effectively lead cases and the approach we take with these will cascade through to others rejected under the birthlink.

‘8. There are uncertainties regarding potential liability. First, the individual level of damages; Mrs Elias was awarded £3K plus interest (about £4K total). If we agree to pay, other claimants will expect the same. If we go to court, a judge is likely to order the same level; of damages but could order more (in the Court of Appeal, Lord Justice Mummery indicated that he would have done so). On the other hand, a much higher figure would be approaching the sum of the ex-gratia payment itself and the courts might feel that this was not appropriate. For the purposes of calculation we have assumed a figure of £4K for each successful claim.

‘9. Second, the number of claimants; some of the 1194 rejected will have no claim because: they are unable to show that they were interned/that they were British at the time they were interned; or that they are unable to show discrimination on grounds of national origins. We are also aware from correspondence on other issues where financial benefit was in prospect (the £500 Apology Payment) that in a number of cases we would expect no response, probably because the claimant is deceased. ABCIFER and the media can be expected to encourage applications but recent correspondence from the VA to the same potential group has resulted in around a 50% response rate from individual or next of kin. For the purposes of calculation we have assumed half of the potential claimants will come forward and have a case. It also seems unlikely that all of those responsible for the estate of deceased claimants would apply. On this basis, our best guess is that £2.4M would be the maximum liability.

‘10. The position on legal costs is more certain. If we decide to pay now, we have just the minimal costs incurred by the solicitors. If we decide to resist, the costs begin in the low £10Ks for taking the lead cases to the County Court and could climb to £200K all in if we went to the Court of Appeal and lost. Costs are discussed further under each of the options below.

‘Presentation

‘11. Covered under the options below.

‘Options

‘12. There are three options:

• PAY. The solicitors are likely to agree a £4K settlement per existing claimant, following the Elias precedent, and may reveal that they are acting for other claimants. ABCIFER can be expected to publicise the decision in the FEPOW community, encouraging further applications. Likely financial liability estimated at £2.4M. There is a slight risk that the solicitors/ABCIFER will call for larger payment (ABCIFER have previously suggested that we should use the damages issue to pay everyone £10K as a way of achieving closure), but we do not think that such an argument is likely to be pursued/succeed. There would be some media coverage which we would expect to be neutral to slightly negative (MOD accepts guilt in discrimination payouts/MOD race mistakes cost taxpayer £2.4M).
• RESIST. If we resist the claims, the Department is certain to be criticised. The solicitors and ABCIFER are likely to lobby Parliamentarians (including the Public Administration Select Committee), the media and the Parliamentary Ombudsman in criticism of the decision. We can make the point that the discrimination was unintentional and that in law damages are not therefore appropriate; we can also point out that we are seeking to protect the UK taxpayer’s money; however, we are likely to be seen both as inconsistent, having agreed to pay Mrs Elias, and as procrastinating in resisting settling our debt to this old and vulnerable group.

The likely financial liability will depend on the extent to which we and the claimants pursue their case. If we were to win in the County Court and the solicitors did not appeal, liability would be limited to the low £10Ks. There is a chance that we would recover costs if we won in court, given that the other side would probably not be publicly funded, but that should not be assumed, given that costs are at the discretion of the judge. If we lost in the County Court, and decided to go no further we would have the other side’s costs and the estimated £2.4M payout liability. If we pursued the case to the Court of Appeal, legal costs would climb to an estimated £200K for both sides. In either court, if we lost, we would face the possibility that the court could award damages at more the £3K plus interest but we consider this unlikely.

There is also a possibility that officials involved in the relevant scheme decisions would be called as witnesses. There is some risk here in that some have previously made statements that could be argued to prejudice our position (notably a memo that you have now seen by an official at the Veterans Agency (who was neither involved in the policy definition nor legally qualified to give an expert view) that the race was a deciding factor for claims under the birthlink criteria),³² the other risks relate to statements by a previous witness that have subsequently been found to have been incorrect, specifically with regard to the position before the birthlink was introduced. These risks have been factored into counsel’s assessment of success. Whilst the courts in Elias have not supported the implication that the criteria were directly discriminatory, the memo has the potential to attract media criticism. However, we would not expect a court to regard the memo as determinative in deciding the claims.

• NEGOTIATE. This option is essentially a variation on resisting. It would involve putting the case to the other side for a settlement out of court at a figure less than £24K, reflecting the strength of our arguments for not being liable to pay compensation in these cases. Counsel advises that we would have to take the initial steps in litigation for the solicitors to take our offer seriously. For this reason, we would suffer the negative publicity outlined above were our position to become public – our willingness to negotiate might reduce the risk of this assuming that the claimant recognised that our position had merit. Some costs would also be incurred by both sides but these would be expected to below the cost of litigating assuming the negotiations succeeded. If they failed then the additional costs would be as for the “resist” or “pay” options, depending on the decision then taken on how to proceed.

The solicitors’ reaction to such an offer is hard to judge. Were they to reject it, we would anticipate pursuing our case to court (though we could decide to settle nonetheless at that stage and would expect this to be at the £4K level). Rejection would likely be accompanied by critical comment. Were the solicitors to accept, there would still be some risk that other claimants might pursue their case for an award at higher level but we would seek to settle any other claims at the benchmark figure agreed for the solicitors’ cases.

‘The analysis above has been agreed by our junior counsel in this case....

‘Conclusion

‘13. As I acknowledged in Ref A and have set out here, there are undoubtedly risks attached to contesting the claims, not least in PR terms, and we have also sought to give full weight to the Minister’s known concern about the number of cases taken to court. However, my advice remains on balance that, based on the financial issues and Counsel’s advice as to the legal merits of our position, we should resist full payment. I would propose that we pursue the negotiation option (i.e. that we indicate that we are prepared to resist the claims in the County Court but negotiate with the solicitors for a lower payment – say no more than £1,500 per claimant who could make a case that he/she had been discriminated against. I would therefore be grateful to know the view of Minister in this matter.’

C3 22 December 2006: The Permanent Under-Secretary’s response to the 5 December submission

‘DAMAGES FOR CIVILIAN FEPOWS

‘Ref: SP/5.9. 19.2.4 dated 5 December D/PUS/15/63 (601), sent 22 December

‘1. The Minister has seen your the [sic] submission of 5 December (SP/5.9. 19.2.4) on whether the Department should resist claims for damages with respect to indirect racial discrimination in cases similar to that of Elias; he has also seen PUS’s advice circulated on 22 December (D/PUS/15/63(601)).

‘2. He notes that, while there is a reasonable prospect of our successfully resisting Elias-type claims, this is by no means assured and that, if we lost, we would end up paying more. He also notes that a decision not to resist these claims is most unlikely to have a significant effect on our ability to oppose those claims that could be expected to arise were we to lose Mohammed in the Court of Appeal.

‘3. On that basis, and taking account of the public criticism and reputational damage we would face if we fought the Elias-type cases, USofS has decided that the Department should settle those cases where there has been discrimination, as set out in the “Pay” Option in your submission.’

C4 26 January 2007: House of Commons Hansard written answers

‘Japanese Internment

‘Mr. Austin Mitchell: To ask the Secretary of State for Defence when he expects to pay the other claims for compensation to civilians interned by the Japanese associated with the class action against his Department won by Mrs Elias. [117025]

‘Derek Twigg: Mrs Elias was awarded damages by the Court to compensate her for injury to her feelings caused by having been discriminated against on the grounds of her national origins when her claim for an award from the Ex-Gratia Payment Scheme for Far East Prisoners of War and civilian internees was rejected under the birthlink criterion. To date, the Ministry of Defence has received eight other claims for damages for injury to feelings from individuals whose claims under the scheme were also rejected on birthlink grounds and who claim to have been discriminated against on the grounds of their national origins. These claims are currently the subject of discussion between the Department and those representing the claimants.

‘The Ministry of Defence is prepared to consider claims for compensation for injury to feelings resulting from discrimination on national origins grounds from any person whose claim was rejected on birthlink grounds and who, like Mrs Elias, was of non-UK national origins.

‘Claimants who think that they are entitled to compensation on the same basis as Mrs Elias should write to the Veterans Agency setting out the basis on which they consider themselves to be a person of non-UK national origins or otherwise entitled to make a claim for indirect discrimination under the Race Relations Act 1976.’

C5 19 July 2007: Template letters

‘Compensation letter to those who have previously enquired

‘I am writing to follow up our previous correspondence regarding a possible claim for compensation for injury to feelings resulting from discrimination on grounds of national origins.

‘We asked individuals who think that they would be entitled to compensation on the same basis as Mrs Elias to set out the basis on which they consider themselves to be persons of non-UK national origins or otherwise entitled to make a claim for indirect discrimination under the Race Relations Act 1976.

‘The basis on which Mrs Elias won her case and was awarded damages was not that she should have been considered “British enough” to qualify under the Scheme. The Court did not rule that, having been British enough to have been interned, she was British enough to have been paid, though some press reports of the case mistakenly stated that it did.

‘The basis on which Mrs Elias won her case was the argument that the birthlink criteria unlawfully discriminated against her, a person of non-UK national origins, in favour of people of UK national origins because people of non-UK national origins were inevitably less able to comply with the UK birthplace requirements.

‘Therefore, the Ministry of Defence is prepared to consider claims for compensation for injury to feelings resulting from discrimination on national origins grounds from any person of non-UK, or non-exclusively UK, national origins whose claim was rejected as failing to meet the birthlink.

‘We note from the information that you have so far provided that you have not stated whether you consider your national origins to be non-UK or otherwise. In order for us to be able to properly consider your claim, we need to know whether you consider yourself to be a person of non-UK, or non-exclusively UK, national origins and, if so, the reasons why you consider yourself to be of non-UK, or non-exclusively UK, national origins. We would therefore be grateful if you could complete the enclosed form and return it to us.

‘Compensation letter to first-time enquiries

‘Thank you for your recent letter about the UK’s Ex-Gratia Payment Scheme for former Far East Prisoners of War and civilian internees.

‘It is well known that the conditions under which many Prisoners of War and civilian internees were held by the Japanese were harsh and that their treatment was cruel. The British Government felt that the suffering of those with a close link to the UK had, for too long, been overlooked. That is why the Scheme was established in November 2000 to allow a payment of £10,000 as a tangible recognition of the extreme and unique circumstances of those held captive in the Far East during the Second World War.

‘To qualify for a payment an individual must, in addition to meeting other eligibility criteria, have a close link with the UK. The requirement that claimants should demonstrate this close link has always been a central principle of the Scheme, although we accept that this was not clearly articulated when the Scheme was announced.

‘During much of the Scheme’s existence, former civilian internees were able to demonstrate their close link by having been born in the UK or having had a parent or grandparent that was (the ‘birthlink’ criterion). However, in October last year, the courts found in the case of Mrs Elias that, while, the birthlink did not directly discriminate on the grounds of race, and that the Government had a legitimate aim in seeking to limit payments to those with a close link to the UK, the criterion indirectly discriminated against her, a person of non-UK national origins, in favour of those of UK national origins and that the discrimination was not justified. This was not intentional – the introduction of the birthlink came about as the result of a benign intention to provide an administratively manageable method to admit more claimants into the scheme, not less. Nevertheless, following the court’s decision the birthlink has been withdrawn.

‘In your letter, you mentioned the issue of compensation. You should note that the basis on which Mrs Elias won her case and was awarded damages was not that she should have been considered “British enough” to qualify under the Scheme. The Court did not rule that, having been British enough to have been interned, she was British enough to have been paid, though some press reports of the case mistakenly stated that it did. The basis on which she won her case was the argument that the birthlink criteria unlawfully discriminated against her, a person of non-UK national origins, in favour of people of UK national origins because people of non-UK national origins were inevitably less able to comply with the UK birthplace requirements.

‘Therefore, the Ministry of Defence is prepared to consider claims for compensation for injury to feelings resulting from discrimination on national origins grounds from any person of non-UK, or non-exclusively UK, national origins whose claim was rejected as failing to meet the birthlink. If you wish make a claim, we need to know whether you consider yourself to be a person of non-UK, or non-exclusively UK, national origins and, if so, the reasons why you consider yourself to be of non-UK, or non-exclusively UK, national origins. You should therefore complete the enclosed form and return it to us.’

C6(a) 19 July 2007: FEPOW scheme guidance – diagrams

The guidance stated that this:

‘claimant would qualify for payment of compensation on the basis of ancestors’ birth alone. The birthplace history on the maternal side gives a clear part‑Russian national origin.’

C6(b) 19 July 2007: FEPOW scheme guidance – diagrams

The guidance stated that this:

‘claimant would not qualify for payment of compensation on the basis on ancestors’ birth alone – this could be an example of a UK colonial family. The claim could succeed based on the claimant’s assertion of their national origin and the reasons for it.
The claimant might say that they consider themselves to be either of non-UK or of part UK national origin. If they substantiated this in some way they would likely qualify for compensation. It would be appropriate to check the reason for the number of unknowns – does claimant not know or did they simply not return the RFI form? A case of this sort must be referred to VPU for confirmation of decision.’

C6(c)19 July 2007: FEPOW scheme guidance – diagrams

The guidance stated that this:

‘claimant would qualify for payment of compensation on the basis of ancestors’ birth alone. The birthplace history on the maternal side gives a clear part-Iraqi national origin.’

C6(d) 19 July 2007: FEPOW scheme guidance – diagrams

The guidance stated that this claimant:

‘would not qualify for payment of compensation on the basis of ancestors’ birth alone – this could be an example of a UK colonial family. The claim could succeed based on the claimant’s assertion of their national origin and the reasons for it. The claimant might say that they consider themselves to be of part UK – part non UK national origin. If they substantiated this in some way – e.g. by saying that they considered themselves to have a part Chinese national origin from their birth and time spent in the country they would likely qualify for compensation. A case of this sort must be referred to VPU for confirmation of decision.’

32. In the memo, the then Operations Manager at the VA (Veterans Agency) stated that ‘It is true to deny that we are being racist, but we are in fact including race as a deciding factor as part of our eligibility criteria’.