Cashing in after calamity

Dido Sandler looks at the options for injury compensation

OVER the past 10 days, the country has been learning how to live again with the threat of IRA violence. The devastation at Canary Wharf and the bomb on Charing Cross Road have left Londoners feeling particular- ly vulnerable.

Many of us, especially those with dependants, have been forced into thinking about what would happen if we were injured in an attack. But there is not just the pain and suffering to consider; there is also the question of how to survive financially if we were no longer able to work.

The good news is that nearly all victims of criminal injury are entitled to compensation from the Govern- ment under the Criminal Injury Compensation

Scheme (CICS). No conviction is necessary; your aggressor need never be caught. Nor are costs involved. The scheme only requires confirmation from the police, or doctors, of qualifying physical and psychological complaints in order to pay out.

The bad news is that, for most people, benefits from the scheme will be slashed from the beginning of April. The Government is set to introduce a strict tariff for different types of injury that will exclude broader considerations. "An old lady of 80 and an airline pilot will get the same amount of money for losing an eye, regardless of loss of future earnings and different needs," said John Lawson, operations manager of the CICS.

By contrast, the current system works in a similar way to civil cases, taking into account an individual's personal circumstances and future earnings potential. One civil action, for example, was London Transport's recent payout of pounds 600,000 to a victim of the King's Cross disaster, where his future career as a musician was considered in calculating the sum.

New rules for the CICS will limit income replacement to 1.5 times the average UK salary. Income will not be available for the first 28 weeks of incapacity. You will then only receive back-payment if you are still unable to work. Furthermore, payouts are to be capped at a maximum of pounds 500,000.

One of the few groups to gain from the new system - after last year's embarrassing climbdown by the Home Secretary, Michael Howard - will be the relatives of those who actually die from their injuries. Under the current system, compensation of pounds 7,500 goes only to parents of someone under 18 or a spouse. Otherwise, the scheme pays nothing, save funeral expenses. The new sys- tem will entitle one qualifying party to pounds 10,000, or more than one party to pounds 5,000 each.

Injured parties can also claim compensation from their aggressor through the courts. However, as Nigel Mills, a personal injury specialist at solicitors Fynn and Partners, points out, you could sue an IRA bomber - but he or she is unlikely to have any money. And you will have to find him or her first.

If you can prove your employer was in any way negli- gent, you can make a claim against employee liability insurance. This is compulsory for all employers and covers legal liabilities for any injury sustained by employees in connection with employment.

For instance, if the employer does not maintain the building properly or fails to evacuate the building when instructed by the police and you are injured as a result, then you will probably have a case. Legally, employers owe a general "duty of care" towards their employees to ensure their safety at work.

They also have specific statutory duties covering safety in the workplace. This covers issues such as handling heavy weights, eye tests for those using display screen equipment, and checking equipment for safety.

The Solicitors' Trust - a lawyer's organisation - explains in a free personal injury factsheet that more than 90 per cent of work-related claims are successful. Lawyers are keen to promote no-win, no-fee legal action for personal injury claimants.

If you are entitled to money under the CICS, it is not worth embarking on a civil action unless you are convinced you stand to gain considerably more that way. The CICS will claw back its payments if you receive compensation through civil claims. However, personal insurance claims are unaffected.

Personal insurance is an option in itself , but this, of course, costs. Life insurance pays out if you die, permanent health insurance pays you an income if you live but are unable to work, and personal accident insurance gives a lump-sum pay out if you lose the use of a limb, or are disabled in some other way.

Before splashing out on a whole lot of unnecessary policies, check what is already in place. Your occupational pension scheme may give a payout on "death-in-service" of up to four times your salary. If you have a mortgage, you will probably have life assurance to pay off the loan should you die.

However, Philip Cartwright, manager at brokers London and Country, warns that the threat of terrorism should never be the primary consideration when buying life insurance.

"You're a million times more likely to die from any other cause," he said.