The Latest News On The Victims of Overseas Terrorism Bill

Second Reading: House of Lords 20th April 2007

however, this is well short of the sums required to put victims of terrorism abroad on an equal footing with those who suffer criminal injuries of any kind within the UK (and can therefore claim under the Criminal Injuries Compensation Scheme). It is not generally known that standard travel insurance policies exclude any liability for consequences of terrorism abroad. The Government has suggested that travellers be encouraged to buy specialist travel insurance covering losses caused by acts of terrorism. However, this is clearly unrealistic given that less than a third of Britons travelling abroad currently purchase a travel insurance policy of any kind.

7. What happens in other countries? The USA, France, Israel, Australia, Italy, Sweden and Finland all have systems which provide for the support of their own nationals who are victims of terrorism abroad. These are funded through different mechanisms including taxes on property, a levy on property insurance contracts and general state funding.

8. Who pays for it there? In France, a Guarantee Fund provides compensation to French nationals for acts of terrorism perpetrated abroad. The Fund is financed by a levy on property insurance contracts to the amount of Eur3.30 per contract. Israel's compensation scheme was originally funded by a tax on property but it is now funded by the general taxpaying public. In Australia and Italy, the compensation schemes are funded by the State.

9. What has the Government said about it? The Government has indicated it would like to see victims of crime at the heart of the criminal justice system, and in October 2005 the Prime Minister pledged to look into establishing a separate compensation scheme to cover British victims of terrorism overseas. DCMS Minister Tessa Jowell has said "I recognise the Red Cross Scheme is not a compensation scheme and that there is a case for treating all British victims of terrorism, where ever it happens, the same." However, the details of any statutory scheme to be set out by the Government have yet to be published.

10. Practical details:

a. What stage are we at? The bill was introduced in the House of Lords on 19 December 2006. It is now due for its Second Reading.

b. When is the Second Reading? The Second Reading takes place on 20th April in the House of Lords.

c. Where can I find out more? Lord Brennan will be hosting a briefing at the House of Lords of Parliamentarians in the Moses Room on Thursday, 19 April 2007 from 11.30am to 1.00pm. The text of the bill, together with explanatory notes, is available on www.matthewfulham.org

d. For further information, please contact Deirdre O'Leary, Assistant Pro Bono Manager at Lovells. Phone 020 7296 2695 or email Deirdre.O'Leary@Lovells.com

Matthew Fulham (17) killed in Sharm El Sheikh terrorist bombing on 23 July 2005

Jeremy Lakin (28) and Annalie Vickers (31) killed in Sharm El Sheikh terrorist bombing on 23 July 2005

Helyn Louise Bennett (21) killed in Kusadasi terrorist bombing on 16 July 2005

Supporters of this campaign include:

Family groups affected by foreign terrorist attacks

110 MPs who signed the Early Day Motion

British Red Cross

Liberty

1. What is the Victim of Overseas Terrorism Bill and why is it being introduced? The Victim of Overseas Terrorism Bill is a private member’s bill being brought forward by Lord Brennan QC. If enacted it will provide support for British nationals who are injured, or the relatives of those injured or killed, in overseas terrorist attacks. At present there is no UK statutory scheme providing compensation in respect of injuries sustained in terrorist incidents outside the UK, other than in EU member states, available to UK citizens. This Bill is designed to provide compensation at minimum public expense.

2. What happens at present? At present, the Foreign and Commonwealth Office and the Department of Culture, Media & Sport provide routine emergency assistance for such victims but this is on a non-statutory basis. Policies of insurance providing cover for injury and consequential loss, in particular travel insurance, generally exclude risks associated with acts of terrorism. Death or injuries resulting from terrorist acts within the UK may be compensated under the Criminal Injuries Compensation Scheme (administered by the Criminal Injuries Compensation Authority, CICA), in the same way as those resulting from other violent crimes, regardless of the nationality of the victim. Under an EU Council Directive of 2004, there is a scheme which will provide for compensation for people subject to violent criminal acts in other EU Member States.

3. What will the bill do? If enacted, this measure will (1) place the assistance currently provided by the FCO and consular authorities on a statutory footing; (2) provide for the establishment of a government sponsored reinsurance fund of last resort with a view to encouraging insurers to cover risks against terrorist injury which might otherwise be difficult to reinsure on the private market; and (3) provide for the establishment of a fall-back scheme which would allow awards of compensation to be made from public funds – this would effectively operate like an adjunct to the Criminal Injuries Compensation Scheme.

4. Who would be eligible to receive compensation? The bill is aimed to benefit British citizens, ordinarily resident in the UK, who have been injured by an act of terrorism committed abroad. The definition of terrorism in this bill is similar in scope and structure to that contained in the Reinsurance (Acts of Terrorism) Act, 1993 but also incorporates elements of the definition of terrorism in the Terrorism Act 2000. As with the Criminal Injuries Compensation Scheme, stringent tests would be applied to root out fraudulent claims and an individual's misconduct, criminal convictions or failure to cooperate with the British authorities would be taken into account when making (or withholding) an award - as would any payment which the applicant might claim from other sources (eg insurers) by way of compensation for their injuries. These provisions should ensure among other things that compensation is not paid to British citizens living or working abroad, or to anyone engaged in civil unrest or otherwise culpable conduct.

5. What will it cost and how will it be paid for? Compensation will be paid out of the Overseas Terrorism Award Scheme. Using current CICA rules for the calculation of compensation, the estimated cost of operating the Scheme is £3 million per year (as against £200 million paid out in compensation by the CICA). The Scheme could be funded, for example, from the Pool Re Scheme which was set up by the Treasury to provide reinsurance to commercial property insurers following the IRA attacks in 1993. Income from Pool Re is payable to HM Treasury and Pool Re currently has reserves in excess of £1,664 billion. Alternatively, the Government could follow the example of France by introducing a levy on certain insurance contracts (see question 8 below).

6. What are the alternatives? The DCMS, through the administration of the British Red Cross, is in the process of establishing a charitable emergency relief fund for UK victims of terrorism abroad. £1 million has been pledged to this fund to provide immediate and short-term relief;

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