Re: What would you do with...
Ffosse, your friend needs help. Needs to get booked in/registered with a proper support agency. He's pushing for compensation purely for the money which will obviously be blown very quickly on drugs and drink the moment he gets it. If he's smoking cannabis he will likely be using other drugs too. Spice is very "in" at the moment and send people either catatonic or psychotic. It is dangerous to be around such people.
The end game here is 100% predictable. He's already divorced to get benefits which is pretty extreme already ! He's ultimately just going to run out of money, plain and simple.
He will join the cycle of thousands of others who long for benefits pay day, and then blow the entire lot on one big drink drug binge (usually with mates) and then spend the rest of the month desperate for cash.
That leads to borrowing from unscrupulous "underworld" people which itself gets ugly.
His life is done unless he :
1) Admits he has problems
2) Desires to get out of that hole
3) Engages with a support centre to get proper advice
4) Get's some rehab
As a friend you are in danger here. There's the physical danger associated with being with someone on drink/drugs. There's the danger that you might come into contact with his circle of drink/drug "friends" who might strong arm you for money.
The biggest danger is that being a friend, he will see you as a target for money when the desperation sets in. He will plead you for money and promise to pay it back, but likely won't be able to.
Never give money, it just fuels the drink/drugs and makes things worse.
Find a support centre for him, offer to go with him for an assessment.
If he won't engage . . . stay away imo.