Veterans of the Gulf War are among the claimants
Almost 1,900 former servicemen and women are suing the MoD for medical negligence.
The veterans of conflicts in the Falklands, Northern Ireland, Bosnia and the Gulf, who are suffering from Post Traumatic Stress Disorder (PTSD), say it was not diagnosed or treated while they were in service.
And they claim they were never warned about the possible effects at the time of their enlistment or discharge from the forces.
They are claiming damages from the MoD for emotional scarring and in some cases, being unable to work.
Opening the case on their behalf, Stephen Irwin QC told the judge the action would centre on 15 "lead" cases which would illustrate the central issues applicable to all the claimants.
He gave various examples of the trauma suffered by servicemen:
He told court: "I wish to stress to the court that we for the claimants are not suing the MoD for exposure to war.
"War is what soldiers should expect and it is what they sign up for - it is what they join the Army for and why sailors join the Navy.
"It is also what their masters should expect and they should provide for this exposure to the horrors of war.
"In a sentence we say they did not."
If the government loses, it could face a compensation bill in excess of £500m.
The court heard there are "special pressures" on service life.
"In battle they face unimaginable stress, stress to a level which one cannot understand without a conscious effort or without experience," said Mr Irwin.
'Blot on escutcheon'
"They are facing an occupation which carries psychological and psychiatric risks at the most extreme end of the spectrum."
Mr Irwin said the effects of wartime combat on the individual had been well documented for many decades - particularly since World War II.
He quoted from a 1945 analysis of the mental effects of war, including shell-shock which caused ex-combatants to seek shelter in a phobic reaction to loud noises or flashes of light and left them unable to handle their anxieties.
Mr Irwin suggested that the MoD's "systemic failure" to deal with the problem was partly due to a "macho" culture within the forces towards psychiatric problems.
Some commanders felt it was a "blot on their escutcheon" (stain on their honour) to have mentally injured men under their command.
The case continues.