Compensation Bill [Lords]

I rise to support strongly this important and long overdue Bill. In particular, I want to direct my remarks to part 2, which will regulate claim farmers. In my constituency, they are preying on the vulnerable and weak. I also put on record my thanks to the Minister and her civil service team for how they have engaged with me and other constituency Members who are dealing with chronic obstructive pulmonary disease claims and have experience of claim farmers in relation to the framing of the Bill. I want to concentrate on three points. The first is the need to regulate claim farmers, and the second is who should be the regulator. The final point relates to the legislation covering, in particular, the reference to trade unions and solicitors. Claim farmers are simple middle men and nothing more. In my constituency—my hon. Friend the Member for Bassetlaw (John Mann) has already referred to this—firms have been created simply for the purpose of raping the CPOD scheme. People have been forced to sign agreements they do not understand, and claim farmers have also made bogus claims in advertisements. Also, when they have been talking to people, they have given the impression that they are solicitors or legally qualified when clearly they are not. Some of the most disgraceful individuals are former National Union of Mineworkers activists, who are working for these claim farmers. They have tried to blur the edges with the implication that they are somehow still connected with legitimate trade unions. I deplore those former activists, who have thrown their lot in with greedy claim farmers and clearly have prostituted any principles that they had, simply to make a quick buck for themselves and their new employers. I want to refer to two cases in my brief contribution. My hon. Friend has already referred to IDC, or FreeClaim IDC, as it is now called, which is a claim handling firm that was set up in the last 10 years and is based in Ashington, Northumberland. I want to refer to a case that involves Mr. Jobes, my constituent, who was approached by the firm and filled in an agreement with it. It did what all claim handling firms did, and passed his case on. It went to a Liverpool-based firm called Silverbeck Rymer. At the conclusion of the case, Silverbeck Rymer deducted £3,600 of the compensation given to Mr. Jobes and passed it on to IDC to cover ““IDC’s costs””. As my hon. Friend has already said, no costs were involved in the case because the Government paid them all. IDC and Silverbeck Rymer knew that at the time. My problem was how to address that. I could not go for IDC because it is not regulated, so I went after Silverbeck Rymer through the Law Society. I pay tribute to the case officer who dealt with this. In a highly critical judgment, the adjudicator said of the case:"““I have concluded that they””—" that is, Silverbeck Rymer—"““did not explain matters to Mr. Jobes so that he could properly understand the funding arrangements and he was not, therefore, in a position to give informed consent to the deductions made””." The key point, which my hon. Friend also made, is that those claim farmers could not have operated without collusion with solicitors. Mr. Jobes could not have been defrauded or robbed without the collusion of Silverbeck Rymer with a claims handler. I challenge the Law Society to examine Silverbeck Rymer’s books, as well as those of every single solicitor who has had dealings with IDC, to see how much they have deducted and force them to pay it back. That is the only way to ensure that those people get justice. I will follow up that challenge and I hope that my hon. Friend the Minister can assist. Firms are not being honest with people about the courses of action open to them, such as help from legitimate trade unions that do not charge anything or home insurance policies. Under the scheme, there is no reason why any legitimate law firm should charge clients a single penny. I also welcome the removal of the regulation of claims from the industry. The Claims Standards Council was a joke, although it tried to claim that it was an independent adjudicator. FreeClaim IDC was on the council—the same company that defrauded and robbed my constituent, Mr. Jobes. It has been argued that trade unions should be excluded from regulation by the Bill, but I do not agree. Most trade unions, which are ethical and well run, should not be constrained by burdensome regulation. However, my hon. Friend the Member for Bassetlaw has already pointed out that the UDM, which has been running a claims farm operation, would not be covered if we excluded all trade unions. It saddens me to say that Thompson’s, a trade union solicitor, is doing the same thing, in league with the Durham NUM. The firm sent all MPs a briefing note this week asking us to argue for trade unions to be excluded, which states:"““Trade unions should be specifically excluded from regulation in Part 2. The suggestion that unions will be excluded as long as they can show that they comply with certain conditions is an unnecessary and overly complex formulation.””" But in Durham Thompson’s has been involved in a con. Individuals with COPD claims, many of whom have never been members of the NUM—such as widows or other relatives—have been asked to join as associate members for £20 a year. That money—and some cases go on for five or more years—does not give them many rights and they are not covered by the certification officer rules. People pay the £20, fill the form in and it is then passed to Thompson’s solicitors, so it appears to be a joining fee to access the scheme. Some people have been threatened that if they stop paying the £20, the action will be stopped. In addition, and even more scandalously, people have been asked to sign a form allowing 7.5 per cent. to be deducted from the final settlement. That money is not kept by Thompson’s, because of course its costs are paid by the Government, but passed to the NUM. The agreement states that that is done to ““indemnify”” the individual against any costs, but we all know that there are no costs for the trade union or the lawyers, because the Government pay them. As in the Silverbeck Rymer case, the NUM is acting as a claims handler. I congratulate my hon. Friend on his tenacious work on the Raleys case. The judgment a few weeks ago stated clearly that Raleys was acting as a claims handler and could not justify the deductions that it had made and passed on to the NUM in Yorkshire, and I think that that also applies to Thompson’s in Durham. I challenge Thompson’s to pay back every penny that it has deducted from my constituents. One of the reasons given for deducting the money is that the NUM needs the money to pursue further claims and continue its activities. But under the scheme Thompson’s alone has received £92 million in fees, £2.5 million of which was for constituents of mine. If further test claims are necessary or the NUM in Durham needs money to keep going, Thompson’s should pay, instead of poor claimants, such as some of my constituents, who have struggled to understand the complexities of the scheme and been bemused by some of the sharp practices involved. I expect better from a company such as Thompson’s. I dealt with it in my time as a trade union officer, and have the highest regard for it, but its actions in Durham are nothing short of a disgrace. The TUC should take steps immediately to ensure that the money is paid back. I welcome the claims handling regulations, as anyone who does not conform to the code of conduct will be classed as a claims handler. The hon. Member for North-East Hertfordshire (Mr. Heald) asked whether trade unions should be covered by the Bill if they act as claims handlers. I believe wholeheartedly that they should be.