The Minister for Defence has welcomed yesterday's High Court decision to suspend Army compensation claims until after Easter so doctors can agree a system to measure hearing damage.
Mr Smith reiterated his hope that there could be an end to the "gravy train" and "astronomical" payments by the courts.
During a visit to Haulbowline Naval Base, he said he had heard of the court's decision with an enormous sense of relief. He said: "I think today's judgment is a victory for common sense and another manifestation of the independence of the courts. Both sides made their cases strongly this morning.
"We have an opportunity to reflect and pause and try to see to what extent all of this can be managed equitably in fairness to those who have genuine damage and to the taxpayer."
Mr Smith said there was no recognised accessible system and it was hoped to have this in place soon. "That is the first time that, before the courts, will be a system which has been designed by people who are involved in the medical business. I think it is very important for people to realise that deafness problems are in the first instance a medical matter. I am not surprised at all that the legal profession would fight strenuously because this is an enormous gravy train."
He rejected legal criticism of the committee he has established to draw up a system for measuring hearing damage. He was certain their findings would be challenged in the courts because of the astronomical sums of money being paid out.
But the soldiers' staff association expressed concern yesterday that the judgment could affect soldiers' constitutional rights to claim personal injury compensation.
Mr John Lucey, general secretary of PDFORRA, said he was also concerned at the composition of the committee. He said: "We are concerned that any new system would not be in line with European regulations for diagnostic purposes and that this would infringe soldiers' constitutional and legal rights to pursue personal injury claims in the normal way."