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I shall give another example; it is a classic. In correspondence sent to one of my constituents, a paragraph has been added in bold. I read and responded to it this morning. This particular consumer complaint has been going on for two years. It is stated in bold that it should be dismissed because I had no appropriate authority from “him”—I stress that “him”—and that I had not
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provided any, but that the firm involved had a client satisfaction form from him that it claimed to enclose. It was not included in the papers, and although I have asked for a copy I suspect that I will not receive it, as this was a deceased claim from a widow; her husband died 20 years ago.

That highlights the kind of people we are dealing with. They not only wrongly take the money—in this case for the UDM, and also, if Wake Smith is the firm involved, probably for Indiclaim as a marketing fee as well. A fee of perhaps about £500 would be paid to Indiclaim, and there would also be a fee that it has helped the UDM and Vendside to get. But when my constituent has the temerity to complain, Wake Smith claims that it has a client satisfaction letter from her husband who died 20 years ago and who has—strangely—failed to sign an authority from me to represent him. When that sort of thing is going on, I have to ask whether the Government should not insist on automatic repayment to those people. Taxpayers’ money is going to the solicitors, so either the Government or my constituents and others have been fiddled. The double charging is straightforward—it is on top of Government fees. Either the Government should consider legal action to claw back the money from the solicitors and use it to recompense the individuals or the law should be changed so that the solicitors—and Vendside Ltd, which are claims handlers—are automatically forced to repay. That is natural justice.

7.30 pm

David Taylor (North-West Leicestershire) (Lab/Co-op): What my hon. Friend describes so vividly and helpfully is possibly legal but morally reprehensible and should be tackled. However, does he acknowledge that thousands of claims in constituencies such as mine have been handled not through the Union of Democratic Mineworkers but a large local firm of solicitors—I spent some hours with them last Friday—and through the local branch of the National Union of Mineworkers, and that the position there is not as sinister and unacceptable as the one that he describes?

John Mann: If my hon. Friend’s constituents are happy, that is all right. If the firm is Moss solicitors, I have received a prodigious number of complaints about it. Those complaints went to the legal ombudsman and led to the special report from that ombudsman. Every single case involved Moss solicitors, which is one of the most disgraceful firms in its handling of my constituents and my ability to represent them. It is the sort of company that is prepared to ring people at home. People who have never had dealings with a solicitor before making a complaint and who are rung up by solicitors feel highly intimidated. That is what my constituents tell me. It suggests that overall action should be taken against those solicitors. The Government have paid that firm many millions of pounds in fees for its work. Yet it wants to take other moneys to hand to people who have given it the claims—uniquely, it has worked for both the NUM and the UDM. The two unions allegedly do not talk to each other, but they clearly do with Moss solicitors.

Mr. Kevan Jones: Does my hon. Friend agree that it is not only a scandal of solicitors and specific unions that have deducted money from people’s claims but of some solicitors using the claims as if they were operating a sausage machine, and processing them without doing a
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great deal of work on them? In several cases, they have under-settled a claim when a competent solicitor would have pursued it and the claimants could have got more.

John Mann: My hon. Friend is right. However, a disparity exists. Some of the solicitors who charged have provided a good service compared with others, and some solicitors who did not charge have provided a bad service. We are therefore considering quality to ascertain if, for example, a services claim has been included. Some of my constituents are taking negligence cases against solicitors and winning significant sums of money from appalling solicitors.

Sometimes one finds a direct correlation between bad service and solicitors who charge. We have found that, when a firm of solicitors, the UDM or Vendside Ltd have handled many claims, the average settlement is well below that of the better companies. There is no good explanation for a significant variation in the average settlement when considering a large number of claims. If the number was small, statistical oddities might skew matters, thus making the sample statistically unreliable. However, in the case of tens of thousands of claims, it is straightforward and valid to make comparisons. Some firms have been taking money and performing poorly, though others have performed well and still wrongly taken money.

David Taylor: Does my hon. Friend see a parallel, in the links and good relations that apparently exist between the UDM and parts of Government—perhaps the civil service—between what we are discussing and the UDM’s negotiating poorer deals for the equal pay claims? When the NUM negotiated better deals, those of the UDM were retrospectively increased. That does not appear fair and open.

John Mann: I am not sure whether my hon. Friend made the point that he wanted to make because, in the case of the equal pay claims, the NUM left plenty in the filing cabinet and there are plenty more that the UDM under-settled. The canteen workers, the cleaners and the equal pay claims constitute a separate issue, into which I do not want to stray now.

I want to refer to some of the claims handlers and what they said. Union and General Services Ltd boldly stated that it would “assist” with

and took a large cheque. Although Robinson King solicitors lost a week ago at the solicitors disciplinary tribunal, they still refuse to pay people back. Four out of the six cases that went to the solicitors disciplinary tribunal involved my constituents. We are considering sums of money that approach £4,000 which was wrongly deducted. There is some dispute about whether Union and General Services Ltd received the money that it was supposed to get for funding the claim. It did not fund the claim and the solicitors conspired with it. That is why the Bill is vital—it is also vital that we get it right.

P. R. and Associates is still in existence. I have an example of its “form of agreement” for “common law claims” for

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However, the claim to which it refers is not a common law claim. It went through the claims handling agreement. If it had been a common law claim, which entailed a risk, it would be perfectly fair for a union or non-union organisation to charge a percentage or a fee, provided that it was transparent, because it bore the risk. The scandal of the miners’ claim is that there was no risk.

We are not being irrational. We do not say that people—whoever they are—should bear risk for no reason or no reward when there is transparency. However, when people have been deceived, they should get justice and their money back.

Perhaps the most astonishing example is that of Industrial Diseases Compensation Ltd. Its agreement form states:

It did not pay a penny. It went through a solicitor on its panel and through the claims handling agreement and did not pay a penny. Its form has a clause 6(i), which outlines what happens if the

I shall end with that. The Bill and the law should deal with cases when the company has deliberately misled the claimant.

We must ensure that everyone has access to justice. That is crucial for that minority who did not go through solicitors with miners’ claims but went only through Vendside Ltd. They have no redress through consumer complaints to the Law Society and the system that I believe now works well, from evidence in the past three or four months. The minority who went only through Vendside Ltd should automatically and immediately have full consumer rights so that they can complain the moment the measure receives Royal Assent.

Simon Hughes: The speech of the hon. Member for Bassetlaw (John Mann) means that I do not need to comment on new clause 11. I guess that a further speech in support of it will be made—an excitement to anticipate.

Obviously, there is a serious point behind all the issues that have been raised. That militates in favour of new clause 1, which the hon. Member for North-East Hertfordshire (Mr. Heald) tabled and to which I added my name. The Government appear to be intent on exempting trade unions as a category and there must therefore be regulations to govern that. Like others, I have examined the draft code of practice and the rules, which the Under-Secretary kindly supplied. There are some weaknesses in it, which others have already pointed out. The early sight of the draft regulations for the rules of conduct does not reassure us sufficiently.

Lembit Öpik (Montgomeryshire) (LD): I have been considering the arguments that have been put forward on exemptions, and I wonder whether my hon. Friend has a view on the matter of strategic importance raised by one of my constituents, Graham Owen, who is a chartered insurance practitioner. He has suggested that small suppliers of such services should be exempt because, with a turnover of, say, less than £5,000 a year,
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they are unlikely to be ripping people off on a large scale or indulging in the kind of scams that we have been hearing about. He has suggested that there should be a turnover threshold of, say, £5,000 a year in respect of the total of the five categories that the Minister has identified, below which a company should be exempt from the regulations. Does my hon. Friend have a view on that? Would he, like me, be interested to hear what the Minister has to say about that suggestion?

Simon Hughes: That is a perfectly proper question for my hon. Friend to ask. My view is always that there ought to be a threshold so that very small practitioners are not governed by regulations. That should also apply to VAT and other provisions. If we want to enable small business people to carry on their businesses, we ought to establish a lower threshold. I have not yet had an exchange with the Minister on that issue, but I hope that she will be able to give us a helpful reply at the end of the debate. My specific and formal answer to my hon. Friend is that there is nothing in the Bill that would prevent the establishment of an exemption for small traders, and the Minister could introduce an exemption for such a category.

Mr. David Hamilton: If there were an exemption for small companies whose turnover was below a certain threshold, what would happen to individuals, such as those involved in the cases cited by my hon. Friend the Member for Bassetlaw (John Mann), who have been screwed by their lawyers? There should surely be recourse for such individuals, no matter what the size of the company.

Simon Hughes: We need to discuss that balance. I understand the hon. Gentleman’s point. Looking at this from the point of view of the consumers of the service, if they have been conned, they have been conned; it does not matter whether they are the company’s only victim or not. This matter would depend on whether the definition involved the value of the service offered or the cost of the service, as they might be different. If the cost of the service were only 10 quid, there could be quite a lot of 10 quids, which would soon add up. I hope that the Minister will address this issue.

The other amendment to which I have added my name is amendment No. 5, which has also been tabled by the hon. Member for North-East Hertfordshire. This is a linked amendment, which the hon. Gentleman addressed in passing in his introductory speech. It proposes that

One of the concerns that has been aired in the debate is the need for clear regulation of the advertising involved, whether it is advertising on hoardings or in the local paper, or the kind that comes through the letterbox or is given away outside shopping centres or railway stations to try to get people to buy the services on offer. I hope that the Minister will give us an assurance that our proposal will be accepted.

May I make a formal request, Mr. Deputy Speaker, that, if—as I hope and expect—the Government are willing to accept amendments Nos. 15 and 16, we might have a chance to vote on them before Third Reading at
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9 o’clock? I want to flag up that request now, if I may. Those amendments come from amendments that I tabled in Committee, on which the Minister said that she would reflect, and they involve a simple proposal.

Clause 5 sets out the procedures for providing exemptions, and, at the moment, they allow only for the use of the negative resolution procedure in the House. So the Government could lay regulations, and only if we prayed against them would there be the opportunity for a debate and a vote on them. The procedures governing exemptions are controversial, in this House and elsewhere, and they are important, in that they could be used to exempt trade unions, either generally or in part, or any other group of organisations. For that reason, I proposed in Committee that there must be an automatic debate in both Houses of Parliament on any proposed exemptions. That would be the time to discuss whether trade unions should be included or excluded. We have had a long discussion on that issue tonight, to which the hon. Member for Bassetlaw has contributed at some length, as well as other hon. Members. The history has not been a glorious one, and the wise thing for us to do now would be to ensure that we had to return to the issue. If the Government were to go ahead with their proposal to exempt trade unions as claims management organisations as regulated by the Bill—the opposite of what the hon. Member for Hendon (Mr. Dismore) is proposing—the House should be able to debate and vote on the matter.

7.45 pm

Mr. Heald: Will the hon. Gentleman accept my joining him in his plea that we be allowed to vote on these amendments, if necessary, at the appropriate time?

Simon Hughes: I am grateful to the hon. Gentleman for that intervention, which I am sure that you have heard, Mr. Deputy Speaker.

The proposition, which is a result of discussions with the Minister and her officials—for which I am grateful—is that the first time an order is made under clause 5, we should have a debate and vote on it in both Houses, and that we should also debate and vote on any subsequent order that would have the effect of removing or restricting an exemption.

Some very dubious practice has clearly been applied in relation to certain claims. Although trade unions may logically have a strong case for being exempt when acting for their members, the wider concern is that they should be included, so as to prevent similar abuses from recurring. In any event, I hope that the Minister will agree that we should have the opportunity to vote on the amendments later.

Mr. Dismore: I rise to speak to new clause 10, which stands in my name. I have no objection to claims handlers being regulated. Indeed, I first started campaigning for that almost 20 years ago, when handlers were first invented, as I recognised that this could be a growing problem. However, I approach the matter from a very different point of view from that of my hon. Friend the Member for Bassetlaw (John Mann). Perhaps he should come along to the Chamber on a Friday, given the way in which he set out his case in such detail earlier. I hope to be able to put my case, from a different point of view, rather more briefly.

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Trade unions have had a rather bad deal out of this debate so far. There has been no problem with trade union legal schemes for decades. Most of them date back to before the second world war, and trade unions have historically played a major role in ensuring that people who were injured at work got justice and compensation—for example, under the old workmen’s compensation scheme, before they had common law claims.

My hon. Friend the Member for Bassetlaw has clearly had a very bad experience arising out of the administration of one particular scheme. However, we must not throw the baby out with the bathwater by losing sight of all the excellent work that the trade unions have done for hundreds of thousands, if not millions, of people over the years in which the trade union schemes have been in operation.

Historically, trade unions have fought difficult, ground-breaking cases, often with contributions from successful cases, in perfectly legitimate schemes. That kind of scheme was starting to die out when I was in practice; very few unions still operated them by then. However, the trade union schemes and the contributions involved were operated for the benefit of the members. They were not operated for profit. They were used to support difficult, complicated, and often expensive cases.

I ran many test cases myself when I was in practice, including some of the early cases involving post-traumatic stress disorder and pension loss. Some cases went to the House of Lords. I remember one in particular, against the Home Secretary in the then Conservative Government, which ended up in the House of Lords. It involved cuts in the criminal injuries compensation scheme, and it was backed by a consortium of about a dozen trade unions and involved several hundred thousand pounds worth of costs. Schemes covering vibration white finger, pneumoconiosis and deafness were all developed with the support of the trade unions, and I believe that we now run the risk of losing sight of the very good work that they have done.

Mr. Clapham: I take my hon. Friend’s view that trade unions have been agencies for the betterment of society. As he has heard in the discussion with my hon. Friend the Member for Bassetlaw (John Mann), much of the problem started with a separate agreement given to the Union of Democratic Mineworkers, which was not available to other unions in the mining industry. Does he agree that all the problems seem to have stemmed from that?

Mr. Dismore: I agree with my hon. Friend. The fact is that the UDM was a rogue union to start with, and has behaved like one ever since it was founded.

John Mann: Will my hon. Friend give way on that point?

Mr. Dismore: My hon. Friend has had plenty of time to make his point. I am going to try to make mine briefly.

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