Claims Administration


The arrival in South Vietnam of massive amounts of matériel and large numbers of troops in the mid-1960s clearly established the need for an effective claims program to cope with incidents that would involve claims for compensation against the United States. It was also apparent that a well-organized and well-administered indemnification program would be an invaluable asset to the Republic of Vietnam and its allies. Not only would such a program deny the insurgents a propaganda weapon, but it would create a climate favorable to respect for law and order.

There was special need for an effective claims program in a country beset by insurgency, where a portion of the population was hostile to the government, and another substantial portion was apathetic. The apathy was engendered by a temporary lack of relationship with the government, by a historical dissociation and a reluctance to resort to a court of law to settle contentions, or by a loss of faith in the benefits of government.

It was clear that before the insurgency could be overcome the Republic of Vietnam had to win over a large section of the population that was neither friendly nor hostile to the government. One method to offset hostility to a degree, and to give assurance to the apathetical portion of the population, was to provide fair indemnification for losses attributable to governmental activity. Fair, timely restitution would show the concern of the government for justice and the welfare of its citizens, assist in spreading the government's influence, and serve to neutralize the enemy's propaganda. It would present the insurgent with a governmental activity he could neither match in service to the populace nor overcome by fear or violence.

Operations Before 1966

The U.S. claims operations in South Vietnam immediately before the major troop influx in 1965 and 1966 were conducted within the Claims and Tort Law Section of the Office of the Staff Judge Advocate, Military Assistance Command, Vietnam. The pace of claims operations was fairly steady. Although each increase in mili-


tary activity brought an increase in foreign claimsóclaims filed by inhabitants of South Vietnam against the United Statesómost cases at this time were military claims arising from the loss or destruction of personal possessions of MACV advisers or U.S. Special Forces troops.

The MACV Staff judge Advocate's office soon gained a reputation for getting into the field to provide fast claims service for such losses. Three incidents will serve to illustrate the methods of the claims teams in dealing with military claims.

The bombing of the large Brinks Hotel in downtown Saigon, where a number of officers were billeted, during Christmas of 1964 was one of the first Viet Cong attacks directed solely against Americans. The smoke had hardly lifted when the MACV Staff Judge Advocate's representatives were on the scene, photographing and recording the evidence. By the following morning notices were posted informing the survivors of the location of nearby offices for filing their military claims. Because of the diligent efforts of the MACV Staff Judge Advocate Claims Branch, substantially all claims of U.S. personnel were paid within several days of the explosion.

A second incident, a Viet Cong attack in Pleiku in early February 1965, promptly brought two members of the Saigon claims team to the site to receive Army claims generated by the incident. An enlisted claims clerk remained for a week to assist in accurate investigation and preparation of the many claims, and in less than two weeks money was on the way to the last of those American soldiers who had been affected by the attack.

The Pleiku claims processing procedures were used successfully again in the hotel bombing of 10 February 1965 at Qui Nhon in which twenty-two Americans were killed and twenty-one wounded. Most of the residents of the destroyed quarters lost all their possessions, equipment, and clothing. At the suggestion of the MACV judge advocate involved in the claims efforts, the survivors were flown to Saigon, where they received their claims money and were able to obtain necessary clothing and personal items at the Saigon exchange outlets before returning to their section stations that same day.

The achievements of the claims teams are all the more noteworthy when some of the hardships associated with claims operations are taken into account.

The Claims and Tort Law Section of the Staff Judge Advocate, MACV, consisted in 1965 of one officer, several enlisted men, and four or five Vietnamese. The office was primarily administered by a young Vietnamese national of Chinese origin who alone controlled and could locate claims in process. Files and index cards were arranged in Chinese fashion, from back to front and from bottom to top. There was a lack of qualified interpreters, and generally each



claim form was completed for the claimant by one experienced but painfully slow Vietnamese national.

Payment of claims also presented major difficulties. The normal method of payment was by check, but it was discovered that it was almost impossible for a Vietnamese national outside Saigon to cash a check without incurring a discount of 50 percent or more. This problem was solved by the appointment of Class A agents, who were sent into the field to find the claimant, secure his acceptance of the amount, and disburse payment in cash by actually negotiating the check.

In early 1965 the number of military and foreign claims mounted by staggering multiples and descended upon the relatively small staff, driving the claims operation of the MACV Staff Judge Advocate's office toward a crisis that was averted only by the hard work and initiative of the Americans and Vietnamese working together.

The first step in coping with the rise in the number of claims was to obtain qualified enlisted claims clerks and interpreters. To keep the work load under control, the U.S. claims personnel worked late each night, identifying, indexing, and processing promptly each claim filed. A fully cross-indexed card system was set up. As new U.S. units arrived in Vietnam, members of the MACV Staff Judge Advo-


cate Claims Section visited them to explain claims processing procedures, basic Vietnam government structure, and sources of aid for those injured by combat action. Claims regulations were completely rewritten to adjust procedures to the realities and to educate further the claims personnel of incoming units. Trilingual (English, Vietnamese, and Chinese) claims forms were prepared and printed.

In addition to handling these routine matters, the chief of the Claims Section -participated in the negotiations with the Korean government concerning the payment of foreign claims generated by troops of the Army of the Republic of Korea who were active in South Vietnam. In fact, the MACV Staff judge Advocate's office was to play a vital role in the negotiation and implementation of certain claims agreements with the Vietnamese government and the Free World allies which came to be known as "knock-for-knock" agreements. These compacts contained provisions whereby the government of one nation waived the claims against the government of the second nation for damage to government property. The agreements did not, however, waive the personal right of an individual to claim damages in the case of negligence of a member of the force of another allied nation. The arrangements nevertheless removed a potential irritant to the relationships among the Free World forces.

Claims Developments

A significant problem that had arisen by late 1965 was the proper handling of claims arising out of the operations of U.S. forces.

The Foreign Claims Act specifically excluded from payment any claim resulting directly or indirectly from combat. Thus, if an aircraft took off on a combat mission, compensation for any damage done by its armament or by a crash of the aircraft itself was barred from payment by the so-called combat exclusion provision. It was not legally possible to plead a change in the nature of the flight by abandoning the mission or even the aircraft.

In August 1965 a military aircraft was disabled by a mechanical failure while on a combat mission. The crew, before bailing out, set the controls of the aircraft so that if everything went according to plan the aircraft would crash at sea. But, for some unknown reason, the aircraft circled and crashed in a village, causing personal injury and deaths and a great deal of property damage. Use of contingency funds was necessary to pay the claims since combat exclusion barred payment under the Foreign Claims Act. A trio dispatched from the MACV Staff Judge Advocate Claims Section spent two weeks processing claims on the spot with the Vietnamese villagers. In order to gain the good will of the people, the United States was as liberal in the disposition of these claims as the law would allow.


The case illustrated also the kind of incidents, growing in number, that led to claims in the gray area between combat and noncombat claims. Finally, in 1968, at the suggestion of MACV, the Foreign Claims Act was amended by Congress to allow payment of certain claims indirectly related to combat activities of the U.S. forces.

Claims Responsibility

The responsibilities and organization of the claims supervisory authority in South Vietnam underwent a change in 1966 and again in 1968. The Secretary of Defense assigned the U.S. Army primary responsibility, for the processing of all claims arising in the Republic of Vietnam under the Foreign Claims Act and the Military Claims Act. This action served to remove the problem of disparity between processing procedures and jurisdiction among the several services.

In 1966 The judge Advocate General of the Army assigned claims supervisory authority to the Commanding General, U.S. Army, Ryukyu Islands (Okinawa), with authority to appoint necessary foreign claims commissions in South Vietnam upon the request of the Staff Judge Advocate of Headquarters, U.S. Army, Vietnam. Finally, in 1968, the Commanding General, U.S. Army, Vietnam, was assigned claims supervisory authority with respect to claims matters, including the authority to appoint foreign claims commissions in Vietnam.

During the period 1965-73, the highest total of claims offices operating at any one time was forty, in 1970. Of this total, fourteen were foreign claims commissions. Two of the foreign claims commissions were three-member commissions located in the Saigon foreign claims office and had approval authority on amounts up to $15,000. The remaining twelve were one-man commissions having authority to settle claims not exceeding $1,000. These one-man commissions were located throughout South Vietnam, usually at either division or area command headquarters. Payments to foreign nationals were made directly to them at each foreign claims office by check and were negotiable in piasters only.

Claims Obligations

It is illuminating to compare the expenditures under the claims program in South Vietnam during the early years under MACV and later during the years of peak U.S. troop strength. During fiscal year 1965 total claims obligations amounted to only $10,000. The following fiscal year, payments rose tenfold to $102,000. During fiscal year 1967, $650,181 was obligated for the settlement of foreign claims and $127,184 for personnel claims. Fiscal year 1968 produced


total expenditures exceeding one million dollars in Vietnam for the first time when $531,000 was obligated for personnel claims and $1,098,000 for foreign claims. Fiscal year 1969 produced further increases when U.S. troop strength reached its highest level. A total of $1,993,000 was obligated: $757,000 for personnel claims and $1,236,000 for foreign claims payments. In fiscal year 1970, foreign claims obligations rose to $1,534,000 and total claims obligations were $2,555,000.

Solatium Payments

In South Vietnam it was the custom for a representative of the United States to pay a visit of condolence to a Vietnamese injured by military activities or to the survivors of a deceased victim, and for a small amount of money or goods such as rice, cooking oils, or food stuffs to be given. The visit and payment took place when U.S. personnel were involved in the incident that caused injury, regardless of who was at fault, and even if the incident was technically caused by combat. The donation was not an admission of fault, but was intended to show compassion. By caring for the victims, the United States could assist the civic action program in Vietnam. The recipient of the solatium payment would also be advised of the procedures required to present a claim against the U.S. government, if appropriate, and the location of the nearest U.S. foreign claims commission office.

The condolence visit was successful in that the personal expression of compassion by a representative of the United States made a favorable impression on Vietnamese victims who had previously regarded the American claims system as efficient, honest, fair, and generousóbut cold. At the Military Assistance Command, Vietnam, a member of the Staff judge Advocate's office was designated to make condolence payments in incidents involving MACV personnel in the Saigon-Cholon area.

Vietnamese Government Claims Programs

The joint efforts of the United States and the Republic of Vietnam to establish a Vietnamese claims program had to take into account several aspects of the Vietnamese legal system.

As Vietnam moved into the 1960s, the judicial organization, although rather elaborate and comprehensive on paper, functioned in practice only in the major cities. Courts at the lowest levels of government throughout the countryside were administered by justices who were in most cases not legally trained and whose powers were dependent upon such factors as the military situation, the strength of local military personalities, and the National Police effort in the area.

Although civil disputes such as claims could come before these


courts, there was a fundamental reluctance by the Vietnamese to resort to the legal system. The result was that the courts themselves played a rather insignificant role in Vietnamese society. The inclination to settle disputes informally with one's neighbor, added to the paucity of lawyers in Vietnam and the inability of most peasants to afford counsel when available, easily explains the vitality in the old Vietnamese adage that it is better to go to hell than go to court.

It was in the interests of the United States to develop its own effective claims service as a part of American legal responsibilities to the Vietnamese people in time of war; but the service also pointed a way to the officials of the Vietnamese government that they, as representatives of the government, could gain the confidence of the people by acknowledging their legal rights and by showing an interest in the problems and losses caused by Vietnamese military units.

Three types of claims services were set up and administered by different agencies within the central Vietnamese government: combat claims, administered by the Directorate of Psychological War; noncombat claims, by the Directorate of Finance and Budget; and defoliation claims, by the Ministry of Interior.

By agreement, the government of Vietnam had responsibility for the processing and payment of all combat claims generated by the military units of the Republic of Vietnam, the United States, and the Free World forces. These were administered by the Psychological War Directorate through the Military Civic Action Program, commonly referred to as MILCAP. The program had its own regulations, procedures, and forms, and its activities and budget were monitored and approved by U.S. authorities. The MACV Political War Directorate was the U.S. counterpart office for the operations of the Military Civic Action Program. Once the determination was made that the claim was combat-generated, the claimant was required to complete the Vietnamese form, add proof of ownership and loss, and submit it through Vietnamese channels.

In cases where U.S. forces had been involved with the combat lossp U.S. claims officers were encouraged to assist the Vietnamese local authorities in processing the claims as rapidly as possible. If the claim was under 200,000 piasters, a committee at province level acted on the matter. This committee included the senior U.S. Army adviser and Vietnamese province chief. Although the amount of compensation that could be recovered under the Military Civic Action Program was limitedódeath cases, for example, ranged from $50 to $300óthe program did represent a visible, viable recourse to the Vietnamese people at province levels.

The government of Vietnam accepted full responsibility for the defoliation program and indemnification for damage to domestic crops. Although few defoliation indemnifications were made through


1966, the existence of the program and the publicity given its availability added to the joint efforts of the governments of the United States and South Vietnam to rally rural support.

The noncombat claims against the armed forces of Vietnam were handled by the Ministry of National Defense through the Directorate of Finance and Audit. Money for these claims was programed annually by the Vietnamese in the budget, which required the approval of the U.S. Military Assistance Command, Vietnam, and the U.S. Embassy.

The salutary effect of all these programs together cannot be measured. One inescapable conclusion, however, is that the cooperative administration and U.S. monitoring of the government of Vietnam claims programs set the central government along the road toward fostering a popular respect for the law.