The UK should follow the example of other countries by offering compensation to all British victims of terrorism, writes Jill Greenfield

The government is looking into the possibility of setting up a scheme to compensate British victims of terrorist activity both in the UK and abroad. At present, those injured in the UK are pursuing claims through the Criminal Injuries Compensation Scheme (CICS). However, British citizens involved in terrorism abroad receive little help. The CICS only covers criminal acts in the UK and insurers often exclude liability using the terrorism exclusion.


I act for a family involved in a terrorist bombing while on holiday in Turkey on 17 July 2005. Five members of the family were seriously injured and another died. They are now unable to work. Their insurer used the terrorism exclusion; with no compensation for their injuries, bills are becoming more unmanageable.


Similar stories have been heard from those involved in the Sharm el-Sheikh and Bali bombings. If you are caught up in such an atrocity abroad, you currently have little or no financial protection.


British citizens are now targets for terrorist activity by virtue of their nationality. Is it fair or right than an individual should pay the price for an attack on our society? Terrorism works on a number of levels; if society is not assisting individual victims, it is allowing terrorism to undermine the framework of society, leading to economic terrorism. A country that fails to give such financial comfort can only serve to further the terrorists' aims.


In the US, following the 11 September 2001 attacks, the Victims Compensation Fund was set up to compensate those injured and families of those killed. It will also shortly put in place a scheme to compensate US victims of terrorist attacks around the world.


Likewise in France, the Guarantee Fund for the Victims of Terrorism was set up to compensate victims of all nationalities who are victims of terrorism in France, and French citizens, wherever they are. There is no cap on the amount that may be awarded - the amount depends on the need. The fund is financed by a levy on property insurance contracts to the amount of 3.30 euro (£2.27) per contract in 2004.


Various but similar schemes operate around the world, including in Israel, Australia and Italy.


So what is the solution? The CICS is currently under review. The suggestion from the government is that people involved in terrorism abroad should not be included in the scheme and therefore not compensated. Ministers reason that there would be difficulty in gathering intelligence and a high risk of fraud. The latter I fail to understand. I agree that the CICS ought not to include victims of terrorism abroad - but for very different reasons. Those who have dealings with the scheme will know how unwieldy it is and, of course, the current maximum award is £500,000. The suggestion is that the cap is going to be increased. But having a cap at all immediately makes the scheme unattractive.


A better approach may be for the government to introduce a new scheme to compensate victims of terrorism abroad (arguably, victims of terrorism in the UK should also be included). This could be brought into effect within the terrorism legislation currently being debated. The scheme would compensate victims of terror based on need and in accordance with the usual civil assessment rules.


The next question is who should fund the scheme. The government may wish to look to the insurance industry. Insurers regularly use the benefit of the terrorism exclusion. Perhaps a tax to reflect that benefit should be considered.


Jill Greenfield is a partner in the personal injury department at City law firm Field Fisher Waterhouse