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Generally, since the Access to Justice Act 1999 and conditional fee agreements were introduced, it has been possible to do without deductions. Occasionally, however, they are required, especially in test cases involving group litigation, which are not party to parts of schemes
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but are often involved in major, complex and expensive litigation. Of course, deductions are nothing new. Under the civil legal aid scheme, before it was removed from personal injury cases, deductions were made, for instance, for disbursements not recovered or payments in. After-the-event insurance schemes that operate now still apply deductions in exactly the same way.

Regulating trade union schemes does not affect the dodgy law firms that we have heard about or the claims handling company, as those would be caught under the new arrangements anyway.

In relation to the definition of members, we should also take into account that many trade union schemes extend to members’ families. I remember the debate in my old law firm in the 1980s about whether we could afford to offer such a scheme to trade unions for the benefit of members’ families, as was eventually provided. Trade unions are already regulated under the Trade Union and Labour Relations (Consolidation) Act 1992, unlike claims handlers, who are not. The certification officer has a right and a duty to inspect trade unions’ accounts. Details of trade unions’ officers have to be filed, and any complaints over breach of rules, including over legal services, can be investigated by the certification officer.

Of course, the trade union rule book, of which union legal schemes form part, is a binding contract between the member and the trade union and can be independently enforced through the courts if necessary. Unlike claims handlers, trade unions have their own internal appeals and complaints systems, which can include whether cases are being turned down. Trade unions do not encourage their law firms to turn cases down but to fight on, unlike claims handlers. They also use specialist law firms, which generally know what they are doing.

The only beneficiary of regulation will be the insurance industry, because trade union legal systems will not operate as effectively as they have done over decades to provide justice for trade union members. I very much hope that the Government will see sense, as they seem to be doing, and accept that trade unions have generally provided an excellent service for a long time. We should not allow one bad experience, albeit involving a lot of people, to affect the whole system of trade union legal support.

Mr. Gummer: I declare an interest as the independent chairman of the Association of Independent Financial Advisers, which has an interest in the Bill but not this part of it. The first Bill that I tried to put through the House, nearly 30 years ago, was opposed by solicitors because they said that they needed none of the regulation that I was suggesting for them. The issue involved was that of fake directories where solicitors used to write letters to frighten people into paying bills that they had no duty to pay and had not incurred. I remember the anger and opprobrium cast at me by the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) and his then hon. Friend who is now in the other place, Lord Clinton-Davis, when I suggested that some solicitors might need such controls.

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I therefore have a long history of not being entirely enthusiastic about solicitors and their being unregulated by people outside. I agree with many of the elements of the Bill and consider it a valuable contribution in many ways. I therefore hope that it will not be taken amiss if I suggest that there is a problem in relation to trade unions that has been misunderstood by many.

First, trade unions and their members, as defined in all our minds, come under a category that is already subject to regulation. We should not regulate—or try to do the same thing—twice, as that is both otiose and annoying. My hon. Friend the Member for North-East Hertfordshire (Mr. Heald) has made an important point. Some aspects of the way in which the exemption is to work do not give adequate protection to the consumer.

I say to the Minister that it is important for the Government to be seen to be even-handed when dealing with trade unions. I am sure that she is trying to be so, but perception is vital in relation to that issue. If she is not to be thought partial, she must be seen to treat trade unions in the same way as she might treat other organisations. Without straying outside the debate, the Government ought to strive not to be seen to be swayed in a partial manner. I therefore ask her to reconsider her approach so far.

We must protect even members of trade unions by ensuring that the code of practice is—at least in the limited way suggested by my hon. Friend—justiciable. If the Minister thinks that it is important to have a code of practice, it is manifestly true that it ought to be able to be enforced. To have a code of practice that cannot be enforced is merely a fig leaf and is subject to the likelihood that people outside here will feel that the Government are being partial.

Secondly, I thought that the hon. Member for Bassetlaw (John Mann) put the argument clearly, and the hon. Member for Hendon (Mr. Dismore) was a bit hard when he said that he went on. Actually, he did not repeat himself once, and everything that he said was of interest to this House, which was not the case with the shorter speech of the hon. Member for Hendon. The hon. Member for Bassetlaw’s point was not contrary to trade unions—he was saying that there are circumstances in which the protection of members, or those called members, of trade unions, was not sufficient, and that people were misled and dealt with unacceptably. It was right to bring that to the House’s attention. As it came from a Member who has such a history of support for the trade unions, it seemed to me that it was not properly treated by those who suggested that he was being antagonistic to trade unions. What he was saying, and what I am saying, is that good trade unions deserve the support and protection of a properly written law that enables them to feel properly defended against the activities of those who bring trade unions’ name into disrepute.

Not only do we want to be assured about the meaning of “member”, which is important, but that people who are embroiled in circumstances in which the trade union acts as a claims organiser—but not as a trade union—to someone who is not a trade unionist will not have their protection removed. That is all that we ask. As the Minister has refused to include trade unions within the definition—for reasons that, I think, are comprehensible—the easiest solution is to accept
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the amendments tabled by my hon. Friend the Member for North-East Hertfordshire. Those amendments are not meant in any way as antagonistic to trade unions but as protection for the customer. That is perfectly reasonable.

There seems to be a cross-party view on this matter. It arises from a desire to ensure that people outside perceive the Bill to be even-handed, a desire to protect every one of Her Majesty’s subjects so that they all have equal rights of protection, and above all a desire to make certain that decent trade unions are not besmirched by the activities of what have turned out to be two trade unions in particular circumstances. I should have thought that those were interests common to us all, and if the Minister is unable to move in our direction, I believe that the Government will lay themselves open to the charge of partiality even if, deep down, that was not their reason for behaving in this way.

8 pm

Mr. Kevan Jones: As someone who was a full-time trade union officer for 13 years, I am fully aware of the vital work that trade unions have done—not just their daily representation of their members in the workplace, but their work in the context of test cases—and I am afraid that I will take no lectures from former solicitors about trade union principles.

The hon. Member for North-East Hertfordshire (Mr. Heald) quoted me as saying in Committee that if trade unions acted as claims handlers, they should be treated as such. My view on that has not changed, but I support the Government’s proposals relating to the code of conduct. Under those proposals trade unions will be exempt if they observe the code, but if they fail to do so they will be covered by regulation and subject to the same restrictions, penalties and scrutiny—and under the same spotlight—as rogue claims handlers.

As I have said, I fully recognise the value of the work done by trade unions. My hon. Friend the Member for Bassetlaw (John Mann) mentioned a case to which I too will refer. Some firms of solicitors, including Thompsons—for which the hon. Member for Hendon (Mr. Dismore) used to work—

Mr. Dismore: Will the hon. Gentleman give way?

Mr. Jones: No, I will not.

Mr. Dismore: On a point of order, Madam Deputy Speaker. As the hon. Gentleman has made that point, I want to explain to him that I never worked for Thompsons. I used to work for a firm that eventually became Thompsons.

Madam Deputy Speaker (Sylvia Heal): That is not a point of order for the Chair, but at least the correct information is now on the record.

Mr. Jones: The hon. Gentleman has made the point for me. He has a clear connection with Thompsons, a company that has not acted in the best interest of its members, certainly in the case of the Durham branch of the National Union of Mineworkers.

Mr. Dismore: That was in 1995.

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Mr. Jones: That may be so, but the hon. Gentleman has been a good advocate on the company’s behalf tonight. I am here as an advocate for my constituents, many of whom—poor and vulnerable individuals—have been ripped off by unscrupulous solicitors using sharp practices in a firm that should know better. If the hon. Gentleman wants to be associated with that firm of solicitors, he should feel free to be so, but I have no such wish.

I support what the Government are doing with the code of conduct. It is a sensible way of not overburdening trade unions with legislation. My hon. Friend the Member for Bassetlaw pointed out that trade unions are already regulated by the certification officer, and members can have redress following complaints to the certification officer about the way in which the organisation operates. I think that that is right, but I also think there are problems with the draft code. For instance, the definition of “members” should be tightened up. The Durham NUM’s scam was to enlist people as associate members. Those people have no legal right to complain to the certification officer, because they are not actually members—and let me point out to the hon. Member for Hendon that that was done with the connivance of Thompsons. “Members” must mean “members” as defined in the Act that covers the certification officer. That may close the loophole. But if “members” means associate members, that should be clarified in the code. Another issue that needs to be clarified is the status of retired members. They may not still be making contributions, but I think that they should still be covered because of their years of contribution and their association.

Mr. David Hamilton: In many cases throughout the United Kingdom, that will apply not only to retired members but to their widows and families. In my part of Scotland many retired members have passed on, but the union still deals with their widows and families, at low cost.

Mr. Jones: I have no problem with that. It is a good example of a trade union not just supporting its retired members, but doing sterling work in supporting widows and others in the community. Unions should be congratulated on that, but alas, it is not what has happened in Durham. That is why it is important for the code of conduct to include a definition enabling trade unions to do the great work that my hon. Friend has described.

There is also the issue of funding. Paragraph 2 of the draft code states:

That is fine, but if a fee is to be deducted, members should be told on what it will be spent. It is important to avoid misapprehension or, indeed, the lies that have been peddled in, for instance, the Durham NUM case. It was said that the fee was being deducted to fund the case when that was clearly not so.

As has been said, in nine cases out of 10 trade unions provide the cheapest way for people to obtain justice in court when accidents have befallen them, but if there is a cheaper way, it should be explained to people so that
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they can decide what to do. I realise that nowadays, given conditional fee agreements and insurance, there is no reason why any trade union should charge individuals anything, but I think it vital to make clear to clients how cases are to be funded and what alternatives may exist.

Paragraph 3 of the draft code of conduct deals with arrangements with third parties, and I must tell the Minister that I think it contains certain minefields. It seeks to deal with the relationship between a trade union and a third party, which may be a claims handling company. It also refers to solicitors. I think it important to explain to trade union members the exact relationship between a trade union member and a firm of solicitors, to avoid any misapprehension if a success fee, or other fee, is paid to the firm.

I am surprised that Members who are advocates of trade unions, and great champions such as the hon. Member for Hendon, have not homed in on paragraph 4 of the draft code, which I think is a bit draconian for unions. It refers to the competence of employees and volunteers. I do not agree with the sentiment, but paragraph 4.2 states:

I think that that will impose on many trade unions an additional burden that they will not welcome.

I accept that the volunteers to which the code refers should be trained, but people must recognise that a lot of people who give trade union advice, as lay members in workplaces elsewhere, may not be trained and their knowledge comes from many years of working in particular industries. Therefore, paragraph 4 needs to be tightened so that it is not too onerous for trade unions and does not debar some people who are doing very good jobs in workplaces from giving initial employment advice. In parts, the provision is quite draconian.

John Mann: My hon. Friend makes an excellent and pertinent point. Does he agree that, as a consequence of that particular provision, volunteers within trade unions such as shop stewards or branch secretaries may be unwilling to proffer even indicative advice about where people should go, for fear that complaints will be lodged against them under a regulated system? Therefore, it will be harder to get volunteers to do anything.

Mr. Jones: I agree totally with my hon. Friend. It is important that during the consultation trade unions think carefully about the consequences of that part of the code of conduct. It could put off branch secretaries and other trade union volunteers, who do a sterling job on behalf of their members, from giving “legal advice”. In the worst case scenario, shop stewards will refuse or be afraid to give advice, so that matter needs clarifying.

The last point in the code again tries to deal with the issue but goes half way and does not answer a lot of the points. It is about complaints and redress. I am not clear, because there is no reference here, how the provision on complaints by trade union members links with the legislation in respect of certification officers. Clearly, as a trade union member—not an associate or other type
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of member such as I spoke about earlier—the individual member has the recourse of going to the certification officer. That needs to be welded into this part of the complaints and redress system. Otherwise, there could be a conflict between the code and existing trade union law that governs regulation of trade unions by the certification officer.

Paragraph 5.2 says:

There is no reference to who the third party would be, and there are no explanatory notes. I would be very resistant if the third party were to be, for example, the union’s solicitors, if they were involved. It would have to be some independent body—perhaps the certification officer, as I have outlined.

This is a good first stab at the code of conduct, but it needs to be updated and refined and some of the points that my hon. Friend the Member for Bassetlaw and I have raised need to be taken on board. However, it is better than bringing trade unions into the Bill; there is existing law to protect trade union members. It is odd that it is Labour Members who are arguing for less regulation and the hon. Member for North-East Hertfordshire and other Conservative Front Benchers who are arguing for more regulation. No doubt I will use that as a good example when I am being lectured by Conservative Members to the effect that the Government are all about more regulation rather than less.

What has been put forward by the Government is a compromise that will protect people. More importantly, it will ensure that organisations that do not abide by the code of conduct will come under regulation. We had the discussion in Committee. The solicitors Thompsons, in their briefing to Committee members before the Committee stage, took the line that has been taken by the hon. Member for Hendon: all trade unions should be exempt. That would include the UDM and others. I pointed that out to a member of the Trades Union Congress, who said “No. We can just have TUC-affiliated organisations.” I was not sure how the Bill could exempt TUC affiliates alone. I think that what the Government have put forward will work if we can get a tougher version of the code to clarify the points that other hon. Members and I have raised.

8.15 pm

I now turn to new clause 11 and the scandal that my hon. Friend the Member for Bassetlaw has already referred to in respect of the COPD scheme. The Government should be proud of bringing compensation to many tens of thousands of miners and their families, who were denied it for many years. However, that has been plundered by unscrupulous solicitors and, I have to say, certain trade unions. Is it a scandal? Yes it is. It has been given some attention by some national newspapers, but not a great deal. If the scandal had taken place in the leafy suburbs of Surrey, I am sure that it would have been on the front page of every national newspaper throughout the country. It is worth bearing in mind that it is because it has taken place mainly in poor former mining communities that it has not received a lot of attention, although I, and other hon. Members, have tried to publicise the issue.

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