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23 May 2007 : Column 460WH—continued
Mr. Jones:
I agree, but I do not want to pre-empt what the Minister is going to say. Those payments were challenged in a court case last week, in which the court ruled that £100 million has to be paid back to the DTI.
I have asked the Durham area NUM, even though it refuses to meet me, to write to every claimant it has worked with to say that the contribution system is now voluntary and that if people wish to have their money back, they can. Thompsons agrees with me on that point, but is reluctant to write to everyone concerned. We had tortuous meetings earlier this year, in which the NUM produced a long-winded two-page letter that would be difficult for anyone to understand. What is needed is for a simple letter to be sent to people telling them that they can have their money back if that is what they want. It could be as simple as that.
It is mind-boggling that the certification officer’s accounts for Durham NUM show that it has 15,000 members, of whom 5,000 are women. The vast majority of those people are not full but associate members. I tried to find out what rights they get as associate members, and the quick answer is none. They pay a £20 fee to access the so-called legal services of Thompsons Solicitors through the Durham area NUM. I have asked what rights they get to decide the structure of the regional NUM, and they do not get any. They have no voting rights. If one of them forgets to pay the £20, they get an interestingly worded letter from Mr. Hopper and Mr. Guy at Durham NUM saying that if they do not continue to pay their legal case will be withdrawn. First, that is wrong. Secondly, it questions the nature of the relationship involving Thompsons.
Does Thompsons, or the Durham area NUM, represent the best interest of the client? My constituent, Mrs. Clark, challenged the NUM by asking whether she could have back the £60 that she had paid. She wrote and then rang the NUM only to be told, “We haven’t got any notification of your letter. Anyway, why are you complaining?” We are talking not about a membership fee, but about an access fee that one would pay to a claims handler to get the case put forward.
Great claims are made in Durham that the deducted money is being used for the promotion of other health claims, the protection of the mining community and in supporting welfare work. I question that, because I do not see much evidence for it on the ground in Durham. I thought that I would see what the Durham NUM does. What I shall now say is happening to the money would amaze many of the people who have paid the 7.5 per cent. My information is not made up; it comes from the Durham area NUM’s accounts, lodged with the certification officer for the past two years.
The president, Mr. David Guy, and the general secretary, Dave Hopper, are paid £6,034 by the Durham area NUM. In addition, they receive £16,000 in car and other benefits. One then notices a figure in the accounts of £120,000, which is transferred to something called the north-east area NUM. That body’s accounts for last year show that two of its employees are, lo and behold, Mr. Hopper and Mr. Guy. Mr. Guy is paid £51,000 and also receives £5,000 a year in pension benefits, while Mr. Hopper is paid £50,000 a year and a further £5,700 in pension benefits.
Unless one traces the Durham area NUM’s accounts to the north-east area NUM, one cannot discover where the money is going. It clearly pays two individuals very well. I have asked for the north-east area NUM’s accounts
for this year, but I am told that the body has now been delisted as a registered trade union, so it does not have to produce accounts. Why is that? The interesting point that lifts a veil is that the north-east area NUM has just 30 members. I am also told that not only are Mr. Guy and Mr. Hopper employed; the new Mrs. Guy is too, although one cannot see that in the accounts.
I am told that all this activity is going on, and that is what the money is being paid for. However, I thought that I had better check to see what is being said in the returns to the certification officer. I have the details here. All trade unions have to put in these returns. They contain a number of self-explanatory headings that have monetary figures next to them.
The return for the representation of employment-related issues was nil. The figure for representation of non-employment-related issues—that obviously relates to welfare, disease cases and so on—was nil. The return for communications was nil. The figure for advisory services—giving advice to people—was nil. The figure for dispute benefits was nil. The other cash payments were nil. The figure for education and training services was nil. The negotiator discounts totalled nil. The salary costs were nil. Interestingly, the figure for other benefits or grants—that is specific—was nil. The figure for death benefits was £1,280. That is all the activity that was being paid for. Given that two individuals are earning a hell of a lot of money, what is the union doing? By its own admission, the answer seems to be very little.
Mr. Alan Meale (Mansfield) (Lab): I must enlighten my hon. Friend a little. I know those two gentleman and the organisation well. I do not represent a constituency in the north-east of England, but I know about their activities, as do many hon. Members who are present. I have no financial connection with the organisation, but I must tell him that he is not blind and he is well aware of what the NUM does in the north-east of England. It is heavily involved in welfare activities, in representation activities and in the communities in the north-east. He cannot hide away from that fact. I hope that he is not intimating that the NUM in the Nottinghamshire area is in any way involved in these issues. It is a separate organisation, and is not involved in the ways that he has described.
Mr. Jones: Not at all. I am raising a specific issue. My hon. Friend the Member for Wansbeck (Mr. Murphy) referred to the Northumberland area, and its returns show what it does. I am sorry to tell my hon. Friend the Member for Mansfield (Mr. Meale) that that is not the case in this example.
This 7.5 per cent. has been taken off people’s compensation. Many people feel that they have to pay it and they still think that they are legally obliged to do so. It generates £5.5 million for the Durham area NUM, which sits in its bank accounts. It was news to me when I found out that the accounts show that £680,000 is in an offshore bank account. What is a trade union doing with an offshore bank account that has more than £500,000 sitting in it?
If the organisation was doing the welfare work to which my hon. Friend refers, I would have no problem, but it is not. I shall cite an example. It paid out just over £1,000 on death benefits last year. I understand
that its death benefit is now a £20 to £30 payout. I understand that Durham Mechanics, a less wealthy organisation, pays out more than £600 in that regard, and I know that other areas do too. So we need to ask what has happened to the money.
The clear solution would be if Thompsons was to write to every person who has had their 7.5 per cent. deducted to ask whether they know whether they were legally obliged to pay it. If people want the money back, it should be paid back. In all of the cases that I have put forward so far, the money is being paid back, and unless that is done, this situation will continue.
If people wish to give their money—the 7.5 per cent.—to Durham NUM, that is up to them, but many of these people do not know about this. It is all very well Mr. Guy and Mr. Hopper condemning me for being an attacker of the trade union movement, but I am not—I want rights for my individual constituents—and if they have nothing to hide, why do they not write to people? Every time that I raise the issue, more constituents say to me, “I want to claim my 7.5 per cent. back.” That will doubtless happen when this debate appears in the local press. This matter needs to be cleared up.
The other issue that I should like to raise is the relationship between solicitors and claims handlers. I want to raise the case of Watson Burton solicitors in Newcastle. It purports to be a major commercial law firm, but it clearly could not resist getting involved in miners compensation. It had a relationship with an organisation called P and R Associates of Sunderland, which is another one of those claims-handling companies that does nothing for clients apart from getting them to fill in a form and then passing it over to the likes of Watson Burton. That firm has deducted £325,000 from miners compensation victims.
On 27 February 2006, a complaint went to the adjudication panel of the Law Society, which found that the named partners in Watson Burton had breached solicitors’ practice regulations. One might expect that some action would have been taken, but was a fine imposed on Watson Burton? No. Were the partners struck off? No. Were they suspended from practice? No. There was merely a reprimand, which Watson Burton was able to trumpet in its press releases as being the lowest form of reprimand that the Law Society put forward.
I have still not received an answer from Watson Burton about its relationship with P and R Associates. Did it buy these cases? Its defence and argument is that it was legally obliged to pass the money over because people had signed a legal contract, but did it advise clients that they did not need to pay the money? No, it did not; it just passed the money over anyway. We are talking about a firm that has taken £325,000 of victims’ money. I understand that one senior partner earned £850,000 last year, so I would challenge the firm to pay back the money, because the clients were clearly being ill advised; they were not being advised that they did not need to pay the money to P and R Associates. That goes to the nub of a lot of relationships, and such disgraceful activity could not have happened without collusion between solicitors, claims handlers and others.
I first became involved through a case concerning a firm in Newcastle called Mark Gilbert Morse, which would unscrupulously charge 25 per cent. in the early days, but I am told by the Law Society that it no longer does so and has paid the money back. I want to highlight an issue about the service that clients receive. A constituent of mine—I shall call her Mrs. X because I do not want to name her—went to Mark Gilbert Morse via a claims handler whose advert was stuck on her door. She was a miner’s widow and last year Capita offered Watson Burton £42,000 to settle her claim. Mark Gilbert Morse did not even inform her that that offer had been made but rejected it saying that it could get a higher offer. However, lo and behold, when Capita made another offer six months later, it was considerably less than the £42,000. I complained to the Law Society, and it shamed Mark Gilbert Morse into paying the original figure of £42,000. However, I am worried about how many other cases are being handled by firms, such as Mark Gilbert Morse, that are giving a poor or substandard service.
Mr. Mark Todd (South Derbyshire) (Lab): Will my hon. Friend comment on the lessons that we can learn, because there are likely to be similar claims for damages to industrial workers? The mechanism for meeting such claims is wholly inadequate and subject to exactly the sort of problems that he has outlined. How can we avoid the problems happening again? My hon. Friend may want to reflect on the pneumoconiosis scheme that the Government introduced and which bypassed all that.
Mr. Jones: There is one short answer: keep the solicitors out of it. If there is to be a scheme for beat knee sufferers, we do not want another feeding frenzy for lawyers. We need a clear scheme that is simple for people to understand and does not need representation.
I have said before that many of the people who come to see me with such complaints have never dealt with solicitors. They are elderly and sometimes without a high degree of literacy. They are in awe of solicitors and believe everything that they say. The Law Society should check those firms to see whether the advice that they give is correct.
The level of claims is revealing. I pay credit to Thompsons who do a good job in ensuring that the claims that it takes on are worked through properly. However, the average figure that Thompsons obtains compared with those obtained by some other firms raises the question: why does one firm obtain more than others? Are the claims different? They cannot be, and often they are very similar. The issue is that firms, such as Mark Gilbert Morse, raise thousands of claims and deal with them like a sausage machine, as they come along. In some cases, I doubt whether a solicitor ever goes near them.
Mr. David Anderson: Perhaps one reason why Thompsons has better results is that they work closely with the NUM and people such as David Guy and David Hopper who have a hands-on relationship in the villages that they come from. They put the work in and get witnesses to come forward, so better cases are put to the Department of Trade and Industry and the courts. That is why they win more money.
Mr. Jones: I wish that were the case, but why is it that firms in North Durham, such as Mark Gilbert Morse, and the claims handlers have so many cases if they do such a good job? They were not doing a good job in those areas. My parliamentary neighbour, my hon. Friend the Member for Blaydon (Mr. Anderson) suggests that, somehow, they were out there actively doing such work, but they were not. In North Durham, for example, claims handling companies, Mark Gilbert Morse and others have a large number of claims from people who have gone not through the union but to claims handling companies. The worst thing about that—it gives me no pleasure to say this—is that there is clear collusion between former NUM officials and unscrupulous claims handlers, such as Industrial Disease Compensation Ltd.
Mr. Todd: I thank my hon. Friend for giving way again. The misclassification of vibration white finger claims into groups 1, 2 and 3 is an example of the differential quality of solicitors. A huge number were incorrectly placed in group 3 by Government contractors and only a certain number of solicitors pursued them. Many people accepted as gospel that their claims had been rejected and that they should forget about them. It was only pressure, partly from Members of Parliament but also from well-informed solicitors, that led to many rejected claims being looked at again.
Mr. Jones: I totally agree with my hon. Friend. Some solicitors give correct advice and press claims, and I have no problem in saying that Thompson do that, but I am sorry that they are dragged into the matter by an agreement that they should not have had in Durham. There was collusion, and I do not blame individuals for being confused.
A working men’s club in my constituency has a long tradition of being associated with the NUM, and I found out that IDC Ltd. was holding a surgery there. I asked the club secretary why he had let IDC Ltd. in, and he said that a certain individual, who used to be a trade union official, had said that it was okay, again giving the impression that such organisations have some legitimacy with the trade union movement. Some of those people should, frankly, hold their heads in shame for their relationships with some claims handling companies.
Mr. David Hamilton: I give no credit to collusion between ex-trade unionists and a filing company, but that has always been the case with ex-trade unionists who move across the floor to management.
My hon. Friend refers to Thompsons and solicitors in England. There is also an issue in Scotland, and Thompsons is picking up hundreds of cases because English solicitors made themselves available to try to make a cheap trick, but did not realise that Scots law was different from English law, and just left people high and dry. Thompsons and the NUM in Scotland—I should emphasise that the NUM is a federal union—is picking up those cases.
Mr. Jones:
I make no bones about it. The NUM has a federal structure, and it amazes me that Thompsons and others have allowed a relationship that is not
correct to develop in Durham. My hon. Friend the Member for Wansbeck (Mr. Murphy) mentioned the situation in Northumberland, which I commend.
My hon. Friend the Member for Midlothian is correct, and that comes back to the Law Society. Under the Legal Services Bill, there must be an onus on the Law Society not to try to educate—that is too patronising—but to ensure that solicitors tell claimants if they may not be the best firm to deal with a case and that another, more specialist firm would be better.
My hon. Friend raises a legitimate point. There was a feeding frenzy and people wanted to get in, so small high street firms of solicitors with no expertise in industrial disease work became involved, and gave bad advice. That is why we should tell people to go to a solicitor by all means, but that they should make sure that they go to someone who knows what they are talking about.
Mr. Meale: My hon. Friend has paid tribute to Thompsons and is also critical of them. Can we move on to other solicitors who had their hands in the till, or their snouts in the trough, such as Beresfords of Doncaster, who have earned hundreds of millions of pounds from such cases?
Mr. Jones: I agree, and I am sure that my hon. Friend the Member for Bassetlaw will add more names. I could read a long list of shame, and it saddens me that Thompsons is associated with that list of shame. They should try to sort that out.
Many hon. Members want to speak, so I shall draw my remarks to a conclusion. Unless the Law Society instructs its members to pay back the money that they have deducted themselves and kept or passed on to a third party, whether a trade union or claims handling company, the matter will not go away. Today, I am challenging the Law Society to instruct every solicitor to pay the money back. It is no good saying, “We are waiting for people to come forward and complain,” because most people do not know whether they have a complaint. In most cases, people have signed a bit of paper with a claims handling company, which they think is a legal obligation. In some cases, as my hon. Friend the Member for Bassetlaw knows, people have been threatened when they have not paid.
Mr. Denis Murphy: Although I agree 100 per cent. with my hon. Friend’s comments about many firms of solicitors, does he agree that there are also decent firms of solicitors that have acted honestly, pursued claims diligently and recovered a lot of money for their clients? One such firm is Browell Smith and Company. Northumberland miners use that company and have had some great success with it.
Mr. Jones: I know Browell Smith and Company well from when I was northern region legal officer of the GMB, and I commend it. As I have said to Durham NUM and to Thompsons, what people do with the compensation they receive is up to them. If people want to give it to the NUM, fine. It is entirely up to them if they want to give a portion to a cats home, but people should not be given the impression that they have to give a certain percentage to an organisation.
Mr. David Hamilton: Will my hon. Friend accept the distinction between claims handlers and the NUM? He has criticised the NUM in Durham. The claims handlers take all the money that they get for the company’s profit, but the NUM in Durham is one of four regional branches that put by £1.2 million to try to lodge a claim on knee litigation. The regional branches are Scotland, Derbyshire, Durham—or the north-east NUM, I am not sure what it is called—and south Wales.
Mr. Jones: My hon. Friend’s loyalty to ex-colleagues is admirable, but what he said is not the case. [Interruption.] Well, let us just take beat knee, or miners’ knee. Until I raised the issue, there was no situation in which Durham NUM would have contributed money, and it still has not put any money in. I am sorry, but the Durham NUM is not different from claims handling firms. The union is acting as a claims handler, and two individuals are quite clearly doing well out of it. Indeed, Mr. Guy’s wife is now also employed by the organisation. It has acted exactly like a claims handler. If the money were genuinely going back into communities and people had a choice about it, I would have no problem; however, that has not been the case. I say to my hon. Friend that I accept long friendships and loyalties, but I ask him to look at the facts and not to be blinded by his past loyalties.
A challenge has to be made. Every single law firm that has deducted money from people’s compensation and kept it themselves should pay it back, and if they have deducted the money for a third party, whether a trade union or claims handler, they should also pay it back now. Otherwise, I will not give up on the matter, as I am sure other hon. Members present will not.
Mr. Edward O'Hara (in the Chair): May I ask hon. Members to bear in mind that wind-ups must start no later than half-past 3?
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