Introduction

Historical perspective

The events relevant to the subject matter of this report begin with the attack on Pearl Harbour by the Japanese on the morning of 7 December 1941.

That a Parliamentary Ombudsman report produced in the 21st century should begin with events which occurred nearly 70 years ago might seem remarkable.

The attack on Pearl Harbour triggered the entry of the United States into the Second World War. It also presaged an attack by the Japanese Empire on the territories in Southeast Asia which at that time were colonies, protected states, protectorates or mandated territories of the UK and other western allied nations. That attack was successful and the British and Allied forces were roundly defeated.

Singapore – the most important British military base east of Suez – surrendered to the invading Japanese forces on 15 February 1942. Approximately 80,000 British, Australian and Indian troops became prisoners of war when Singapore fell, joining the 50,000 who had been taken prisoner during the fighting that had taken place since the Japanese had invaded what was then Malaya on 8 December 1941. In his memoirs, Winston Churchill described this surrender as the ‘worst disaster’ in British history.

The fall of Singapore – and the successful invasion and capture of other colonies of the UK and other western Allied nations – was also to have a tremendous and terrifying impact on the local civilian population. The treatment handed out to many of those living in the territories that had become occupied by Japanese forces was extremely harsh.

In the territories which had formed part of the British Empire before occupation, those British civilians were singled out for special treatment, being interned by the Japanese in specially designated camps controlled by their military forces. The civilians of other Allied nationalities resident in the occupied colonies and other territories of those countries were similarly interned. They all endured extreme privations and hardship.

After the defeat of Japan and the end of the Japanese occupation of territories in Southeast Asia at the end of the war, some compensation was paid by western governments, derived from frozen Japanese assets located within the relevant countries, to certain prisoners of war and internees – both military and civilian – under the terms of the San Francisco Peace Treaty with Japan that had been signed in 1951.

Seeking compensation

Survivors and their families led a campaign over many decades for an official apology from Japan for the inhuman treatment that the prisoners of war and internees had endured, and for compensation to be paid by the Japanese Government in recognition of that treatment. To date, this campaign has been unsuccessful.

From 1998 onwards compensation arrangements began to be put in place by a number of western governments, including the UK Government, to recognise the special suffering which those interned by the Japanese had endured.

The complaints which I have considered when conducting the investigation which led to this report arose in relation to the arrangements for a compensation scheme which were put in place by the UK Government. These arrangements were first announced in November 2000.

There were three ex gratia payment schemes implemented by the UK Government, which are relevant to the actions and events covered in this report. Each of the schemes was the administrative responsibility of the Ministry of Defence (MoD). I have outlined these schemes in greater detail in the investigation section of this report, and have included full transcripts of essential documents and key legal decisions pertinent to the formulation and implementation of those schemes in annexes
to this report.

The first scheme – the original ex gratia scheme – was administered by the War Pensions Agency (the WPA), an executive agency of the then Department of Social Security (which became the Department for Work and Pensions in 2001). Responsibility for the WPA transferred to the MoD on 8 June 2001 and the WPA was renamed the Veterans Agency. It merged with the Armed Forces Personnel Administration Agency in April 2007 to form the Service Personnel & Veterans Agency. For simplicity, I will refer to them all as the ‘Agency’ in this report.

The original ex gratia scheme

The original ex gratia scheme (the original scheme) was announced by the then Parliamentary Under-Secretary of State for Defence, Dr Lewis Moonie (now Lord Moonie of Bennochy) on 7 November 2000. The scheme provided for payments of £10,000 to be made to surviving members of British groups eligible to receive compensation, to reflect the ‘debt of honour’ that was owed to them by the UK due to the unique circumstances of their incarceration by the Japanese during the Second World War. One of these eligible groups was described as ‘British civilians who were interned’. There was no further qualification as to nationality requirements or bloodline.

Following Dr Moonie’s November 2000 announcement, there was considerable internal discussion between the departments involved in creating and implementing the original scheme about what would be the agreed understanding of the term ‘British’ for the purposes of identifying the eligible civilian internee applicants. I have outlined these discussions in greater detail in the chronology of events at Annex B of this report.

In June 2001, seven months after the original scheme was launched, Dr Moonie agreed a ‘clarification’ to the eligibility criteria for civilian claimants to the scheme. Claimants now had to demonstrate that they had been British subjects at the time of internment in a designated camp run by Japanese guards and that they possessed a close link to the UK; that is, either they, a parent, or a grandparent was born in the UK – the introduction of the ‘birthlink’ or ‘bloodlink’ rule.¹

The introduction of these previously unstated eligibility criteria led to numerous complaints and criticisms about the manner in which the MoD and the Agency administered the original scheme. Of particular concern was the post-announcement application of a definition as to what constituted ‘British’ at the time of internment and the way in which the requirement for a close link to the UK was being interpreted.

What followed was considerable legal and administrative action, stretched over a number of years, in an attempt to redress the errors in the original scheme. Sadly, despite my and others’ extensive involvement in identifying the errors and proposing solutions, this is still ongoing. Below is a snap shot of those actions. There is more detail in the body of the report and in my chronology of events at Annex B
of this report.

Legal and administrative action

In 2002 the Association of British Civilian Internees – Far East Region (ABCIFER) applied for a judicial review of the original scheme, arguing that the introduction of the ‘bloodlink’ criterion was illegal. ABCIFER were unsuccessful before the High Court, as was their appeal to the Court of Appeal in April 2003.

In December 2001 my Office received a complaint from Professor Jack Hayward that the introduction of these further ‘criteria’ was maladministrative. I awaited the outcome of ABCIFER’s legal challenge to the original scheme prior to accepting the case for investigation in June 2003. I upheld Professor Hayward’s complaint and identified considerable administrative shortcomings in the way that the original scheme was devised, announced and implemented. Of the four recommendations I made, the MoD initially accepted only the final two recommendations. So, on 12 July 2005 I laid a report before Parliament, using my powers under section 10(3) of the Parliamentary Commissioner Act 1967, on my investigation entitled A Debt of Honour.² The full pre-publication response from the UK Government was included as an annex to that report.

As a result of the criticisms I made in A Debt of Honour, on 13 July 2005, the then Minister for Veterans, Mr Don Touhig (now Lord Touhig), issued an apology in the House of Commons for the distress caused by the maladministration I had identified. And, in October 2005, the Agency wrote to all of those individuals who had applied for and been declined compensation in the original scheme, and who had thought that they met the criteria but for the inclusion of the ‘bloodlink’ criterion. This letter offered a ‘one off’ payment of £500 and an apology for the distress caused.

In December 2005 the Public Administration Select Committee (PASC) held an inquiry into these events. During the hearing Don Touhig conceded that there appeared to be some inconsistency around the eligibility rules that applied pre and post the introduction of the ‘bloodlink’ criterion and confirmed that there would be a review of those rules. PASC published a report of their findings in January 2006 and concluded that:

‘it is a source of regret, and shame, that the MoD received the Ombudsman’s report a year ago, on 18 January 2005, and did nothing until our hearing meant that it had to address the report properly.’

In late January 2006 Don Touhig announced that a senior civil servant, Mr David Watkins, would undertake an independent investigation into how the use of inconsistent criteria had arisen and why it had not been exposed earlier.

Mrs Elias – court action

Also in July 2005 a former civilian internee, Mrs Diana Elias, challenged the legality of the ‘bloodlink’ criterion in the High Court.³ In order to win the case on the basis of discrimination Mrs Elias needed to show that she had been treated less favourably than someone of different racial or national origins, and that the treatment she received was because of, or on the grounds of, her race. It was also necessary to show that she had suffered some detriment or disadvantage as a result of this differential treatment in order to prove her claim for damages⁴ to redress that detriment.

In short, the High Court ruled in Mrs Elias’ favour, determining that while it was legitimate for the MoD to limit the original scheme to those with a close link with the UK, the introduction of the ‘bloodlink’ criterion was unlawful as it indirectly discriminated⁵ against people of non-UK national origins. The High Court judge ruled that Mrs Elias’ proper remedy was to seek damages for indirect race discrimination in the county court.⁶

The county court awarded Mrs Elias £3,000 damages plus interest under the Race Relations Act for injury to feelings, but rejected her claims for financial loss (she had also claimed the £10,000 ex gratia payment) and aggravated and exemplary damages. Both Mrs Elias and the MoD appealed the county court judgment.

In October 2006 the Court of Appeal upheld the High Court and county court decisions. In his opening remarks on the legality of the scheme Lord Justice Mummery said:

‘The result of inadequate preparation has been an embarrassing administrative and legal muddle, personal pain, charges of incompetence, costly litigation and political apologies, accompanied by inquiries, investigations, reports, hearings and reviews. A cloud has been cast over what many people would agree was an honourable act of public benevolence.’

The second scheme – the revised scheme

In March 2006 Don Touhig announced two changes to the criteria for civilian internees to remedy the previous inconsistencies:

• the ‘20 year rule’ which required that claimants had resided in the UK for at least 20 years since the end of the Second World War, until November 2000 when the scheme was introduced; and
• that anyone who was rejected under the ‘bloodlink’ criterion but who would have met the Japanese asset criteria⁷ would be eligible. (The introduction of the ‘20 year rule’ meant that Mrs Elias became eligible to receive the £10,000 payment, which she duly received.)

In July 2006 the Watkins report was issued, finding that shortcomings and inadequacies of government officials’ actions had resulted in maladministration and distress.

The third scheme – the injury to feelings scheme

On 26 January 2007 the third scheme (the injury to feelings scheme) was announced by the then Parliamentary Under-Secretary of State for Defence, Mr Derek Twigg. This scheme offered payments of £4,000 to any person whose claim under the original scheme was rejected on ‘bloodlink’ grounds and who, like Mrs Elias, was of non-UK national origins.

The MoD explained that this payment was to recognise the adverse impact in the form of injured feelings that people had suffered when their claim to the original scheme had been rejected on discriminatory grounds that were unlawful.

Claimants who considered that they were entitled to the compensation payment were advised to write to the Agency setting out the basis on which they considered themselves to be entitled to make a claim for indirect discrimination under the Race Relations Act. The cut-off date for receipt of applications was 31 December 2008.

None of the three schemes was established in recognition of any legal liability on the part of the MoD to make payments; instead, they were administrative solutions to deliver policy decisions made by the UK Government.

Going forward

The failings in the administration of the original scheme and the establishment of the revised scheme are part of the backdrop to the subject matter of this report.

However, the focus of the complaints considered in this report is on the way that the MoD handled claims for payments under the injury to feelings scheme in recognition of the injury to their feelings that the complainants had suffered due to unlawful discrimination.

While the complainants were – and, at the time they complained to me, remained – aggrieved that they were denied a payment under the original scheme, it is the case that they do not qualify, and have never qualified, for a payment under the rules which have governed eligibility for the original scheme and those of the
revised scheme.

However, as will be seen, the administration of the injury to feelings scheme cannot wholly be divorced from what went before, as it was established to remedy the effects of unlawful discrimination in the operation of the original scheme. And, Mr A’s overall experience of the MoD and the Agency cannot be isolated just to his dealings with them in relation to the injury to feelings scheme.

1. Whilst these terms were used interchangeably by different agencies, for consistency I have referred to this as the ‘bloodlink’ rule throughout this document, unless I am quoting directly from the Agency or the MoD.
2. A Debt of Honour (laid before Parliament on 12 July 2005) is available at http://www.ombudsman.org.uk/a-debt-of-honour. Further detail about this report and findings can be seen in paragraphs 72 to 74 of this report.
3. A detailed outline of the three stages to Mrs Elias’ court action is at Annex E of this report.
4. Damages attempt to measure in financial terms the extent of harm a plaintiff has suffered because of a defendant’s actions. The purpose of damages is to restore an injured party to the position the party was in before being harmed. Damages are defined in Mozley and Whiteley’s law dictionary (12th edition) as ‘The pecuniary, ie monetary, satisfaction awarded by a judge or jury in a civil action for the wrong suffered by the plaintiff’.
5. For further information pertaining to indirect racial discrimination see paragraph 83.
6. Under the Race Relations Act 1976, as amended, in England and Wales the sole jurisdiction to award damages for unlawful discrimination rests with county courts.
7. Under the separate Japanese Asset Registration Scheme modest compensation payments were made in the 1950s to some who had been imprisoned or detained by the Japanese, following the UK’s ratification of the 1951 San Francisco Peace Treaty. The British Government funded this from its share of the proceeds of liquidated Japanese assets.