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Coal Health Claims

23rd May 2007

Jonathan Djanogly offers his support to miners still seeking compensation and calls the DTI and its Ministers to account for their mismanagement of coal health compensation claims.

3.38 pm

Mr. Jonathan Djanogly (Huntingdon) (Con): I begin by expressing our support for those miners still seeking compensation and congratulate the hon. Member for North Durham (Mr. Jones) on securing this important debate. I also acknowledge the local expertise that many hon. Members have shown this afternoon and welcome their input.

In disclosing any interests that I may have as a solicitor-albeit not one who practises in the personal injury or litigation sectors-I feel that the situation, involving relatively small numbers of solicitors, has left a black mark against the standing of the legal profession. As Peter Williamson of the Solicitors Regulation Authority on 25 April said:

"The row over solicitors making deductions from the compensation to sick miners has seriously damaged the reputation of the profession",

and thus public confidence in both the profession and the legal system itself. He has urged the partners of 515 firms that dealt with miners' compensation to return to all clients any additional charges that they made in those cases. That was a key point made by the hon. Member for North Durham, and I should be interested to know which firms have refused that plea. Perhaps the Minister could advise us of the position.

One sad aspect of the situation is undoubtedly the length of time that it has taken for individual miners to receive compensation for the harm that they suffered. It has, after all, been some 10 years since the High Court found British Coal negligent in respect of miners suffering from vibration white finger. As has been mentioned, some 225,000 claimants given money for chronic chest conditions were paid less than £2,000-less than the scheme allows in legal fees for each claim handled-and 13,000 received less than £200. In fact, two thirds of claimants have received less than it cost the Government to handle their claim. By contrast, more than £800 million of public money has been paid in legal costs to the 30 highest earning solicitors' firms involved in registering and settling claims.

The Government, and specifically the Department of Trade and Industry, have spent too much time debating claimants' legal costs and not enough time examining their failings in controlling their own legal costs. According to an estimate in The Lawyer, the DTI's legal costs are expected to reach £2.4 billion once the compensation scheme ends, over £1 billion more than has been paid out to claimants' solicitors.

Finally, there is the issue of clawbacks against solicitors, claim handlers and trade unions. We are glad to hear that some money may yet be clawed back. The SRA has gained refunds of £2.5 million from some of the law firms involved, and the Government have stated that they will reclaim almost £100 million in legal costs. I should be grateful if the Minister clarified how much has been reclaimed from solicitors so far, how much has yet to come and how much will be written off. Of those totals, how much will be allocated to those miners or miners' families who lost out because their compensation was reduced by so-called administrative deductions?

What can we learn for the future? We are all keen to learn from the mistakes made and see that compensation schemes for miners and their families are completed successfully. We are also eager to ensure that future complaints handling schemes, particularly those relating to personal injury claims, are handled more fairly and without excessive charges or pressure being brought to bear on claimants.

The Trade and Industry Committee in its 14th report concluded:

"We feel that better and more direct regulation would have curbed the worst behaviour exhibited by such companies in respect of the coal health compensation schemes."

In light of that statement, the then Parliamentary Under-Secretary of State for Constitutional Affairs, the hon. Member for Tottenham (Mr. Lammy) said:

"When we produce our legislation...colleagues will be keen to ensure that it contains the principles and language that provides that professional conduct."-[Official Report, Westminster Hall, 22 March 2005; Vol. 432, c. 237WH.]

The Minister promised in a written ministerial statement on 15 December 2005 to follow up with the Law Society the extent to which claimants would be made fully aware in future that they were free to use solicitors who do not make deductions. I hope that he will confirm that those discussions have resulted in specific Law Society recommendations and let us know what they are. Judging from the comments of the hon. Member for North Durham, the Government have clearly failed in that regard.

The conduct of a few solicitors has negatively impacted on the legal profession's reputation, but the smell of inefficiency, waste and mismanagement permeates much further than to a handful of solicitors. It goes to the top-to the DTI and its Ministers, who must now account for their mismanagement. Other parties must be reviewed as well-one union has pocketed millions through just one firm of solicitors, another has been subject to a Serious Fraud Office investigation and new revelations about union activities were made earlier today.

The Conservatives agree that there should be firm regulation, but we think that it should apply to everybody involved in the business of claims management and to unions, not just to lawyers, and that it should include accountability to the regulators. At the start of this debate, I sat back, somewhat bemused, as Labour Members debated among themselves solicitors' practices versus Durham NUM practices versus Northumberland NUM practices, and then the north-eastern NUM practices versus DTI oversight. Frankly, rats in a barrel come to mind, falling over each other in what the hon. Member for North Durham called a feeding frenzy. Very few come out of this cleanly. The Legal Services Bill will come before the House shortly, and we hope that it will address the concerns raised by hon. Members about the regulation of the legal profession in the future.

Mr. Denis Murphy: Does the hon. Gentleman agree that for all the faults pointed out this afternoon, had it been left to his Government, no miner would have been paid any compensation whatever? It was an absolute disgrace-not just the Conservative party's position on the closure of the industry, but how it treated sick miners.

Mr. Djanogly: Considering the nature of this debate, I do not think that the hon. Gentleman does himself much credit in making an overtly political point.

Having heard today's evidence, we need to reconsider the position of unions acting as claims handlers. As for the DTI, the National Audit Office will report in late summer on the planning, implementation and run-down of the two schemes. I do not wish to pre-empt the NAO's findings, but we shall review them carefully once they are published. A huge amount of public money is being spent, and the Conservative party remains to be convinced that it is being spent appropriately.

3.45 pm

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