Compensation Bill [Lords]

I intend to ask a number of questions of the Minister and the House, and I hope that people will take them into consideration as the Bill progresses. I will address each question by illustrating what I am talking about with an example from the mother of all gravy trains, the scamming of money from miners. I pay tribute to more than 1,000 of my constituents who have already taken action—many of them successfully—against more than 35 firms of solicitors and a whole range of claims handlers. The first example involves a claims handler called IDC. Many of my constituents signed a form that said that IDC would pay the costs of the claim. It even contained a clause about what would happen if the claimant deliberately misled the company. In fact, the opposite happened. A firm of solicitors called Gorman Hamilton got the claim from IDC and wrote to my constituents to say:"““You, as our client, are liable for our costs but, as you know IDC Ltd have agreed to pay them on your behalf.””" That was not true. The Government were paying the costs. It was a scheduled case. There were never any costs being paid by IDC. Here we have a conspiracy between a solicitor and a claims handler. My question for the Government is: what will happen with that conspiracy if there are different agencies regulating the claims handler and the solicitor? That is the nub of the issue. I have some minutes from the national marketing meeting of IDC. Oxley and Coward solicitors, Park Hutchison solicitors, Marrons solicitors, Whittle Robinson solicitors, and Russell Young solicitors were all at that meeting. IDC went through the importance of knowing the needs of solicitors and what they consider ““good referrals””, of looking at the screening processes and of the ““personal touch””. Mention is made of ““MTFS”” or ““make them feel special””. That is with reference to the clients. Mention is also made of:"““The introduction of a theme to build on in order to provoke a response and to attract and hold the favourable attention of the prospect whilst the selling message is being told.””" There is a discussion of whether to use a shotgun or a rifle approach to the marketing of the product. The question of collusion between solicitors and claims handlers is at the heart of the issue. Under the heading of questions raised from the floor, the minutes state:"““With this strategy in place expect clients to cross from Union Solicitor to IDC.””" That was the aim of that marketing meeting. The question of the two culprits together is important. The second example involves PR and Associates. Again, a number of my constituents signed a common law claim form, headed ““Common Law Claims””. The offer was that the costs would be covered for a common law claim, and the claimant would pay 15 per cent. plus VAT in return. That sounds fair, but of course, those were not common law claims, despite the fact the Kidd and Spoor Harper said:"““In accordance with… your Agreement...we have deducted””" the fee to PR and Associates from the claim. Here we have the solicitor doing the work on behalf of the claims handler. There is a cast iron case against the solicitor, but how will that be affected in terms of how the claims handler is regulated? The third example involves Union and General Services. It is the same old thing. The contract says that the company will pay the costs of the fee. This time the firm of solicitors is called Robinson King, and £3,284 was deducted in this particular case. The letter states:"““you are funded by Union & General Services…I enclose a copy of the signed agreement…I have forwarded this cheque on to Union & General Services who will deduct their…fee and provide you with a cheque””" for the rest. How will that be dealt with? Money has passed wrongly to a third party. Separately, Union and General Services, which was a limited liability company, has gone into receivership. When we started to raise the issue, the company was closed down. How will the regulation affect such a scam company, which was set up by a Mr. Revell from Doncaster, a former union official? It was a pretence to call the company Union and General Services. Given that the company put itself into receivership, we would not be able to take a common-law case against it to the small claims court because it is no longer in existence. How will the ability of companies not to be pursued be dealt with? Another of my constituents, Mrs. Beckett, went to Raleys, a firm of solicitors that I have already named. She was told:"““NUM funding is available only through this firm””." However, Mrs. Beckett did not go through the NUM, but contacted Raleys directly by using Yellow Pages. Despite that, she was told:"““You are of course at liberty to explore other types of funding arrangements, however we cannot guarantee that they will protect you from the need to pay any expenses or from the amount that your solicitor may recover from your compensation””—" not true! I have a copy of the kind of publicity that Raleys puts out from a brochure produced by one of the health authorities. Raleys says, ““Millions won in compensation,”” and asks miners to come forward, but the publicity makes no mention of the NUM. However, when one goes to Raleys, as did another of my constituents, Mr. Dunstan, the situation becomes clearer. He was told:"““If you do not wish to take up the option of Union backing then it will be necessary for us to consider alternative funding arrangements. If you are not eligible for legal aid then it will be necessary to discuss funding your case by either private funding or through a conditional fee agreement.””" However, we should not forget—the letter was written in 2000—that the Government were paying the fees. The letter continues:"““If you choose to fund your claim on a private basis then you will be liable for the costs and disbursements of this firm in dealing with your claim. You will also be responsible for the opposition’s costs, should you lose””—" not true; it is a lie. The letter then sets out a statement on conditional fee arrangements and says:"““Please find enclosed a form of authority confirming the funding options which you would prefer.””" The TUC briefing for the debate makes the situation when dealing with unions clear. The vast majority of unions are decent organisations that deal with members who can get remedies in a range of ways. However, Mrs. Beckett was not a member of a union and Mr. Dunstan was a retired member. The situation was affecting non-members, not members, so remedies available for members, ranging from the certification officer to common law governed by statute, would not be available. Precisely how would that be addressed? Of course, we have also heard about another union: the Union of Democratic Mineworkers. I have lots of similar forms that contain such phrases as:"““I will pay … a fee … to cover the cost of pursuing this Claim””." However, that should not be the case. One of the dilemmas is that although the majority of people went through solicitors, so the Law Society would be involved, some did not. That is precisely why I intervened on the Minister to ask about the Government’s ongoing three agreements with UDM Vendside. There are no solicitors involved and no consumer right is available. The people involved have never been to court or had dealings with solicitors before. Many of them are in their 80s and 90s, and their only remedy is to go to court to get justice, but that does not appeal greatly to people of that age. There is far more to the situation. I have a form from a Mrs. Cocker. The Vendside bit of the form has been covered by a sticker for Walker and Co., which is not known to my constituent. An individual employee of Vendside and the UDM had set up a different company. That company then takes a cut. I know that because I have a copy of the minutes of a UDM meeting in January 2002 between Beresfords solicitors, the UDM leader, Mr. Stevens, and Clare Walker—Walker and Co. The minutes explain in graphic detail who gets what cut of the money. There is a range of information detailing what Beresfords, Vendside and Clare Walker will be getting. The minutes also cite a company called Melex that is being set up, 90 per cent. of which is owned by the Beresford family. Letters between Beresfords and the Law Society have come into my possession. Beresfords has been asking, in essence, how it can get around the Law Society rules on referral fees. They ask, ““Can we set up a third party?”” They do not call it Melex, but Melex comes into existence. Who should get paid? Obviously, the Beresford family get some money, but so does Clare Walker. But it goes on, because then there is the conditional fee arrangement, and insurance. In some cases, Beresfords hands matters on to another firm of solicitors—its panel—which themselves pay a fee back to Beresfords. In a hearing loss claim, there could be five or six different deductions. There is an amount for the ATE Insurance commission—the minutes say who is going to get a bit of that. There is the Melex money. There are the vetting, administration and marketing fees. That leads me to my key point. It is very easy to set up new companies to get round the guidelines. In other words, people say, ““It’s not a referral fee—that’s not allowed under Law Society rules. It’s a marketing fee.”” It is only when someone manages to get all sorts of files that they see that lots of people are doing the same work. Walker and Co. was doing the marketing; Vendside was doing the marketing; Beresfords was doing the marketing. Oh, and there is another firm, Indiclaim, which was doing the marketing as well. There are lots of different people doing the marketing. We must ensure that these dodges are not allowed. I understand that some of these companies are now charging money for training. Training has nothing to do with my constituents. There are different ways of skinning the cat and getting the money. Another firm of solicitors, BRM, is paying £500 plus VAT to Indiclaim. Another one, Wake Smith, has done a better deal, as it has to pay only £300 plus VAT to Indiclaim. My constituents have never heard of Indiclaim Ltd. They do not realise that it is owned by one of the people running Vendside, which is owned by the UDM. We must ensure that people cannot wriggle out of regulation. It is essential that the Government use the opportunity of their agreement with the UDM to look into the matter in graphic detail. The Law Society is quoted in the legal services ombudsman’s report as saying:"““it is not clear what (if anything) Vendside and/or the UDM did pursuant to the Vendside Agreements in respect of the fee paid””." What they did was set up lots of other companies. My constituent Annie Robinson, aged 93, gets £352.50, which she struggles to get back either from the solicitor or from Vendside. That is simply not acceptable. It is essential that we act now, and do not wait until the Bill comes into force. The scandal of the miners’ compensation is going on at the moment. These people need consumer rights now, because the Raleys, the Vendsides and the plethora of other firms who have been ripping people off should be held to account—and if solicitors who are claims handlers are struck off, the Government should cancel their agreement with the UDM.