Military veterans launch legal challenge to MoD’s LGBT Financial Recognition Scheme

Law firm Irwin Mitchell act for two LGBT veterans, Mark Shephard and Steven Stewart, who are challenging the lawfulness of the Ministry of Defence’s (MoD) LGBT Compensation Scheme.  The firm has a long tradition of supporting the Armed Forces.

The purpose of the Scheme is to provide an acknowledgment of LGBT veterans’ adverse personal experiences during their service when homosexuality was banned, and to provide compensation in recognition of the suffering experienced as a result of the Ban.

The 1967 Sexual Offences Act decriminalised homosexuality between consenting adults in private aged 21 or older but did not extend to decriminalising homosexuality in the Armed Forces. The Ban against homosexuality was not fully lifted until January 2000.

In January 2022, the Government announced its commitment to co-commission an  LGBT veterans’ independent review to gain an understanding of the impact that the Ban had on LGBT personnel. This led to the Etherton review on the experiences of LGBT veterans serving in HM Armed Forces between 1967 and 2000.  The report was critical of the impact of the Ban and made a number of recommendations, including that the Government should set up a scheme to provide acknowledgement of LGBT veterans’ adverse personal experiences whilst serving during the Ban and to make a compensation payment in recognition of the suffering that was endured.

This led to the MOD implementing the LGBT Financial Recognition Scheme (The Scheme) in 2025. Whilst it was believed that this would lead to long overdue acknowledgement and recompense for veterans, the Scheme does not operate fairly  between  individuals who were differently ranked during service. The Scheme provides for two levels of compensation: the higher Dismissed or Discharged Payment (DD) where, subject to eligibility, individuals can be awarded up to £50,000.  For those who do not meet the criteria, a lesser award up to a maximum of £20,000 can be made through an Impact Payment, although many payments to date have been substantially less than the maximum.

Angela Jackman KC (Hon), a Partner and expert human rights lawyer at Irwin Mitchell, representing Mark and Steven, said: “A challenge is being brought against the Scheme because it draws an unjustified  distinction between those who were commissioned officers and those who were ‘other ranks’.

“The rules specifically require applicants to show that they were dismissed or administratively discharged, with the exception of Officers who meet eligibility if they were ordered or instructed to resign or retire by their service board solely on the basis of their actual or perceived sexual orientation or gender identity during the Ban.

“The Scheme makes no allowance for DD payment to potentially thousands of Enlisted Personnel who say they were subjected to discrimination and harassment, including disciplinary proceedings, which forced them to resign.  In some cases, veterans  say they were given an ultimatum to resign otherwise face consequences such as dishonourable discharge. The rules simply do not acknowledge numerous circumstances where veterans  were constructively dismissed.”  

Irwin Mitchell has now written to the MoD on behalf of the pair arguing the scheme should be reviewed as it fails to comply with veterans’ human rights.

The MoD is being urged to review the scheme or face an application for a judicial review in the High Court. Veterans want the MoD to revise the rules to extend eligibility for DD payments to Enlisted Personnel who say they were ordered or forced  to resign, or who suffered such traumatic experiences that they were left with no option but to resign.  

Angela Jackman KC (Hon), the lawyer at Irwin Mitchell representing veterans, added: “The underlying basis of the scheme is to acknowledge and compensate individuals for harrowing experiences and enforced termination of a career that individuals had longed to pursue. Many veterans, who wanted to serve their country with pride and distinction, continue to experience the devastating consequences of discrimination and trauma suffered during the Ban.  

“To draw an artificial distinction based on former employment status is inconsistent with the Government seeking to right the past wrongs under the Ban. We are urging the MoD to review the Scheme and place all Enlisted Personnel on the same footing as Officers.

“All many veterans wanted was to serve their country with pride and distinction. They were denied that opportunity then, and while nothing can make up for what they’ve been through, they’re now being denied the opportunity of compensation that adequately reflects the level of suffering they’re endured.

“We are arguing that the current administration of the Scheme is contrary to a number of public law principles, including unreasonableness and failure to comply with the Human Rights Act 1998.”  

Steve Stewart Case Study

Steve Stewart, from the South West, served for seven years in the British Army as a Corporal in the Royal Military Police.
During his service he deployed on operations in the first Gulf War and Northern Ireland. He was awarded the Accumulated Campaign Service Medal - which recognises those with long-term, repeated operational service.

However, Steve, now aged 55, left the Army in 1995 following an investigation into his sexuality under the Ban.

After leaving the Army, Steve built a career in local government and continues to serve his community.

Steve said: “I absolutely loved my time in the RMP. It gave me a real sense of purpose and I met people who I believed I’d be friends with for life.

“Then one day I was arrested and searched on suspicion of homosexuality. The whole experience was intrusive and deeply traumatic.

“I was formally disciplined and told I could either resign or face a court martial that would almost certainly end in a dishonourable discharge. A dishonourable discharge is one of the most serious punishments in the military and usually reserved for serious criminal offences. I had done nothing wrong, but I was left with no real choice.

“Leaving under those circumstances was devastating. My military career ended overnight. The impact of that decision has stayed with me ever since.

“I rebuilt my life, but what happened has stayed with me for nearly three decades. It affected my confidence, my relationships and how I saw myself.

“The least I and many others deserve is for the redress scheme to actually recognise what happened to hundreds, if not thousands of service personnel, was wrong.”

Mark Shephard Case Study

Mark Shephard served in the RAF from 1995 to 2001 as a fitter, helping to maintain and service aircraft.

He was stationed with 33 Squadron at RAF Benson in 1999 when he was questioned over his sexuality.

Mark, of Taunton, Somerset, said: “I was marched into an office full of high-ranking officers and interrogated about my sexuality. 
“I was told that I could be dismissed – and in which case I would have to pay back my bonus - or I could hand in my premature voluntary release (PVR)  and work my 18-month notice period. I couldn’t afford to pay back my bonus so felt I had been backed into a corner and left with no choice therefore but to adopt the PVR route.”

After leaving the RAF, Mark, continued working within the military in civilian roles. Now aged 49, he currently works as a system support engineer for the military air traffic control systems at RNAS Yeovilton.  
Mark added: “While in some ways the end of the 1990s doesn’t seem that long ago, attitudes towards homosexuality were a lot different, especially in the Forces. 
“Homosexuality between consenting adults had been legal for decades but the Forces were still behind the times. One of the hardest things for me to accept was that just months after I was interrogated the official ban in the military was fully lifted.

“However, it was still too late for me and I felt like I was driven out of the career I trained hard to achieve and excelled at.

“A few years after leaving the RAF and coming to terms with what happened I finally came out to family and friends and felt like I could start to live my life.
“However, I never told my family or friends the real reason why I left the RAF until recently and when I did it came as a big shock to them. 
“Nothing will ever make up for what many people had to go through. This action isn’t about the money but ensuring those who had to give up their military lives and careers get the justice they’re entitled to.”