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7.13 pm
Mrs. Angela Browning (Tiverton and Honiton): On a point of order, Mr. Deputy Speaker. During questions to the Secretary of State for Trading and Industry this morning, the Secretary of State refused to give information about meetings and telephone calls that had taken place between him, or his Department, and BMW. At 1 pm today, I faxed the permanent secretary at the Department of Trade and Industry, asking him to make the departmental records available and to place them in the House of Commons Library. I have received no reply, but I understand that at 4 pm journalists from the House of Commons were invited into the Department and briefed on the departmental records--information that was denied to the House this morning.
May I ask through you, Mr. Deputy Speaker, for the records to be placed in the House of Commons Library as a matter of urgency?
Mr. Deputy Speaker (Sir Alan Haselhurst):
As the hon. Lady probably understands, that is not an issue that the Chair can directly affect. Those on the Government Front Bench will have heard what she has said.
Queen's recommendation having been signified--
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
Question agreed to.
Mr. Deputy Speaker (Sir Alan Haselhurst):
With permission, I shall put together the motions relating to Committees.
Ordered,
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Mike Hall.]
Mr. Kevin Barron (Rother Valley):
I thank Madam Speaker through you, Mr. Deputy Speaker, because I understand that she selected my debate for this evening. The practice known as administration or success fees has been an issue in my constituency and many others for many months. The fees are asked by some solicitors from ex-miners who make successful claims under the schemes that have been agreed with the Department of Trade and Industry and a group of solicitors.
In the middle of last year, I was approached by someone who works for the Coal Industry Social Welfare Organisation--CISWO--which is based in my constituency. The organisation has a long and proud record of working in coal mining communities, looking after the interests of retired miners and miners' widows. Families that suffered bereavement due to industrial accidents used to get good support from the organisation.
I was told that miners and miners' widows were asking for advice on correspondence from solicitors that they found confusing. In July last year I sent copies of some correspondence to the previous Minister, my hon. Friend the Member for Leeds, West (Mr. Battle), showing that a firm of solicitors called Raleys in Barnsley is involved in the practice of getting claimants to agree to an arrangement under which 3 per cent. of any compensation received, up to a maximum of £750, is paid to them. That sum is paid in turn to the National Union of Mineworkers.
Raleys argued:
Another argument used in the correspondence is:
Mr. Alan W. Williams (East Carmarthen and Dinefwr):
The South Wales area of NACODS--the National Association of Colliery Overmen, Deputies and Shotfirers--has a similar levy of 5 per cent. of the eventual award, or 10 per cent. in the case of lapsed members. In one case, there is a claim of £7,250 from a member's compensation.
Mr. Barron:
I am grateful for that intervention.
Mr. Allan Rogers (Rhondda):
As one of the Welsh members on the monitoring group that was set up by the
Mr. Barron:
I ask my right hon. Friend to do exactly that.
I have a constituency case of an ex-miner who was originally asked by Russell Young Solicitors of Newcastle to pay an administration fee of £1,000. He objected. That was consequently reduced to a maximum of £200. Because Russell Young went out of business, his claim, which was for vibration white finger, was sent to Thompsons Solicitors of Newcastle, which asked for and, I understand, has now received consent to take a £200 administration fee from my constituent's compensation.
On 1 November last year, I sent those two cases to the Office for the Supervision of Solicitors, asking if it were able to take action to stop the practice of asking for fees from compensation, when the solicitor fees had already been met by the taxpayer.
I emphasise that I did not write in any formal complaint on behalf of any constituent. I was concerned simply about the practice that I have outlined. I intended to bring the matter up in Parliament on Wednesday 10 November last year in a debate on the coal industry, but, sadly, I was not called.
On that day, an article appeared in the Yorkshire Post, explaining what I had done and including some comments from the Minister. I received a letter from a firm of solicitors in Sheffield, Irwin Mitchell, which wrote on behalf of the co-ordinating group of claimants' solicitors, which represents former mine workers in the litigation. That firm was responsible for the handling agreement, which it agreed with the Department of Trade and Industry.
The firm stated in its letter that the article in the Yorkshire Post was misleading. I wrote back telling it what the Minister had said in correspondence and asking the following three questions, given that it seemed to be the lead partner in the group.
The first was:
The third question was:
Although the firm considers that the charge of £750 is high, it does not argue against some charge. As to the final response to my final question, I go back to the reply to my first question: on what basis can one of the charges be made when these solicitors are not retaining the fees for funding unsuccessful claims but are handing them over to a third party--in this case, a trade union?
I sent this correspondence to the Office for the Supervision of Solicitors, which has appointed a leading solicitor in the west midlands to look into the matter. His preliminary report was completed on 27 January, and I am waiting to see whether there will be a full investigation. I would hope that that would include the collection of more evidence into what I believe is a very unsatisfactory situation.
Meanwhile, the problem goes on. I received a letter dated 6 March from CISWO, stating that it had identified a differential fee charged by the company Irwin Mitchell, which is based in Sheffield. That differential fee is charged particularly in posthumous cases. One widow was asked to sign a conditional fee agreement for 10 per cent. payment, while another was asked to sign for a deduction of 20 per cent. CISWO pointed out that the charge can go as high as 25 per cent. in some cases.
That is true. I have here correspondence sent last month to a miner's widow in my constituency. Under the heading "Respiratory Disease", it states:
I agree with CISWO: the whole matter is confusing to my constituents, many of whom are elderly or who have difficulty reading the reams of paper involved and coming to decisions that are in their own interests. I believe that most solicitors dealing with mineworkers' claims are not charging any success or administration fee.
I have evidence from two solicitors' firms. Towells from Wakefield states in correspondence received by my constituents:
That, for the purposes of any Act resulting from the Learning and Skills Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of--
(a) any expenditure of the Secretary of State incurred in consequence of the Act;
(b) any increase attributable to the Act in the sums payable out of money so provided under any other enactment.--[Mr. Mike Hall.]
That Dr. Brian Iddon be discharged from the Environmental Audit Committee and Mr. David Chaytor be added to the Committee.
30 Mar 2000 : Column 599
That Mr. Bill Rammell be discharged from the European Scrutiny Committee and Mr. Allan Rogers be added to the Committee.
That Dr. George Turner be discharged from the Select Committee on Public Administration and Mr. Anthony D. Wright be added to the Committee.
That Mr. Peter Luff be discharged from the Liaison Committee and Mr. David Curry be added to the Committee.--[Mr. Mike Hall.]
30 Mar 2000 : Column 600
7.15 pm
Under a Conditional Fee Agreement ("no win, no fee") solicitors are entitled to receive up to 25 per cent. of the claimant's damages (however large the damages are) which for a £25,000 claim could be up to £6,250; but under the mandate the Union administration fee is limited to £750 (3 per cent. of £25,000) and in many cases will be less.
Does my right hon. Friend the Minister agree that, in the circumstances, the statement of the solicitors is grossly misleading? As part of a package agreed with the legal profession, the Government are paying all solicitors' costs for successful claims and even some costs for unsuccessful claims.
I believe that the Union exists to fight for the rights of working men and women. . . . The Union has for nearly 30 years been at the forefront of the campaign to have bronchitis and emphysema recognised as an industrial disease.
I am sure that we all agree with those sentiments; I have been arguing the case for many years. However, that does not justify the union taking a cut from the compensation awards for those disabling diseases.
Why do you think it is right that a successful claimant or, on some occasions, his widow, has the responsibility/obligation to pay money towards an unsuccessful claimant's costs?
The second was:
Why is it that some solicitors are charging different administration fees? I have seen examples of some charging £200 and some charging up to £750.
We have heard from my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) that there are different charges in South Wales.
Why is it that one firm of solicitors is charging an administration fee on successful claims and passing it on to a third party (the claimant's trade union)?
30 Mar 2000 : Column 602
Irwin Mitchell's replies to my three questions are as follows. In reply to question one, it was stated:
During the course of the passage of the Access to Justice bill and the withdrawal of legal aid for personal injury claims, the Government has made it clear that solicitors should adopt a business-like attitude towards claims funded by Conditional Fee Agreements and view successful claims which attract success fees as funding for unsuccessful claims.
In answer to question 2, it was said:
I am not in a position to comment on administration fees levied by some firms of solicitors. Funding and billing arrangements between solicitors and their clients are essentially private matters and I have no knowledge of the arrangements that most members of the solicitors group have made with their clients.
In answer to my third question, I was told that the
I know some firms make no charge at all until the end of a case and from what I know of the litigation personally a charge of £750.00 would seem to be a lot, however I am unaware of the circumstances in which this sum is claimed and thus I am not in a position to express a considered opinion. The regulation of solicitors costs does allow clients the facility to challenge charges that they think might be inappropriate and if you consider it helpful I can provide you with the information as to this process.
arrangements made by trade unions to fund their members' claims varied from union to union. The matter you raise is one between the particular firm of solicitors, that firm's clients and the trade union concerned. I am not in a position to offer an explanation.
In reference to the reply to my first question, does not my right hon. Friend agree that, if solicitors agree that they should be more businesslike, they should agree some form of code of conduct and scale of charges? However, I find it difficult to accept that successful claimants have any form of obligation to fund unsuccessful claims.
If your claim proves to be successful generally "costs follow the event". This means that if you are successful in proving your claim for compensation then the party paying that compensation will in addition pay your legal costs. Under the terms of a Conditional Fee Agreement, you will then be liable to pay a success fee. The success fee being 25 per cent. of our basic costs.
The letter goes on to state that the terms of the conditional fee agreement mean that if a claim failed, the claimant would not have to pay any costs. However, the fee agreement sent to my constituent to sign stated, under the heading "Paying Us", stated:
If you win the case, you are liable to pay our disbursements, basic costs and success fee.
Will my right hon. Friend confirm that, under the scheme agreed with the Government, disbursements and basic costs are met by the taxpayer, not by the successful claimant? Yet the conditional fee agreement makes it clear that that is what is expected to happen.
We also confirm that whether or not your claim is successful, no charge will be made by this firm for work undertaken in connection with your claim. In the event that you are awarded compensation, our fees will be paid by British Coal's insurers. No monies whatsoever will be deducted from your compensation.
Keeble Hawson in Sheffield, whose offices are a few hundred yards from those of Irwin Mitchell, states:
I confirm that this firm does not charge any success fee on any claim whether the claimant is referred to us by a Union or from any other source.
Is there any way in which we can get messages to retired mineworkers to tell them that they do not have to sign up to these additional fees if they do not want to? Has my right hon. Friend thought of using the newsletter of the mineworkers' pension scheme--obviously at the Government's own expense--to put the message across to people, many of whom will be getting the newsletter, that they do not have to sign up to those solicitors who are levying charges on their rightful compensation?
In addition we do not charge for any unsuccessful case again whether or not the individual has been referred from a Union or not. The only item we would charge is if we have to incur any disbursements such as GP records etc, then we usually ask the Claimant to confirm that they will meet the costs of such a disbursement or deduct it from their compensation. I would say at this stage, it has been rare if ever this has actually happened.
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