Compensation Bill [Lords]

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 halfway 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 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:"““Where a complaint cannot be resolved to the satisfaction of the member within a reasonable time, it should be referred to a third party for termination.””" 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. 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. There are two separate aspects of the scandal. The first is about the way in which certain solicitors have seen this as a quick way to make a lot of money. I first raised the case of Mark Gilbert Morse over three years ago. Those people were not content with getting their fees paid by the Government; they added 25 per cent. on top as a success fee, and they got people to sign agreements saying that they would have the money deducted. As my hon. Friend the Member for Bassetlaw said, the reaction of many constituents was, ““I’ve signed the agreement so I have to pay that money.”” Well, they did not have to pay it. I am pleased to say that Mark Gilbert Morse quickly decided to pay the money back, but I am still not satisfied. That company and a number of other companies have said that they have paid it back. We have their word, but I suspect that unless someone has complained about the fee being deducted, the money will not have been returned. That is why the new clause is important. We should force solicitors to pay back all the money that has been deducted unlawfully. I give credit to the Law Society individual case officers, because some are very good and work very hard in pursuing some of the rogue elements involved in those scandals, but as my hon. Friend said, that can be done only if someone makes an individual complaint; otherwise, people will not get justice. Some firms of solicitors have started paying money back, irrespective of whether complaints have been received. Obviously, they feel guilty and think that they will be exposed later, but we are not talking about small amounts of money; we are talking about millions and millions of pounds. That has been taken by firms of solicitors regulated by the Law Society. Clearly, self-regulation has not worked. That is why I have been one of the strongest advocates for independent regulation of solicitors. I am glad that the Government are taking that on board. The Bill will cover two other consumer rights issues that need to be addressed. I am not afraid to say this about claims handling companies: I hope that the Bill kills off that industry altogether, because in my opinion there is no need for those companies. They are simply middlemen that have preyed on people and take a cut. If people want legal advice, they should go directly to their solicitors or their trade unions. That should be the best way forward. To date, there are no ways of getting at claims handling companies, apart from going to their solicitors. The only way to get at the solicitors is through the Law Society, case by case, because many claims handling companies are still holding on to money that was deducted unlawfully. I took up the case of one of my constituents, Mr. Jobes, who had been contacted by Industrial Disease Compensation, now FreeClaim IDC. Ironically, it was one of the founder members of the Claims Standards Council, which was set up supposedly to regulate the sector. I am pleased that my hon. Friend the Minister has not fallen into the elephant trap and allowed the CSC to be the regulatory body for claims companies. IDC took £3,600 from my constituent, but all it did was get him to sign a form—which purported to indemnify him against legal costs, when the company knew full well that he would not need to lay out any money at all under the COPD scheme—and pass it on to a firm of solicitors in Liverpool, Silverbeck Rymer. The case went through the process, the money was paid out and the solicitors deducted £3,600 and passed it on to IDC. What did IDC do for that money? It did nothing except pass on the information. It had led Mr. Jobes to believe that he was being indemnified against legal costs. Mr. Jobes and the other constituents who have come to see me are not, with no disrespect to them, used to dealing with solicitors. Some are widows, others are in very poor health—including Mr. Jobes—and do not know what to do with legal documents they get sent. Some have even been sent threatening letters saying that if they withdraw from the agreement they will end up with huge liabilities. That is a disgrace. I pursued Silverbeck Rymer through the Law Society, which ruled that it had to repay the full amount. Silverbeck Rymer lost the appeal and had to pay the money back, but I hate to think how many other cases there have been in which money was deducted by solicitors and paid to IDC. How much money is sitting in the coffers of IDC for which it did nothing? IDC knew that it was doing something wrong. Not long after the publicity on the issue, it changed its agreement so that all that was payable was an administration fee of £100. It was still doing nothing for that £100 except passing information on to solicitors. Another scandal remaining to be unearthed is the collusion of former NUM officials and others who had access to membership lists. They prostituted any trade union principles that they had by going to work for IDC and helping it to make a quick buck out of the COPD scheme. The scandal of the £100 administration fee is that all IDC did for the money was pass on information to solicitors, which deducted sums from the final award to pay to IDC. I am pursuing several cases with the Law Society questioning the role of the solicitors in acting as collection agents for claims companies. These scams have cost people tens of thousands of pounds, but they could not have happened without the collusion of solicitors’ firms, including some well known high street names. I would have thought better of those firms. As well as acting as collection agents, the solicitors are failing to advise their clients that there is no need to pay the £100 administration fee. In fact, if people had gone direct to the solicitors, they would not have paid any fee. The solicitors were not acting independently. They saw IDC and the other claims handling companies as a way to gather hundreds of claims and paid the £100 fee with no questions asked. Another issue is quality of service. IDC’s website talks of a panel of solicitors, as though they have been vetted or specialise in such claims. In fact, they are high street solicitors who are looking for work. That has meant that not only have some people been ripped off by the fees, but some of the solicitors have taken a sausage machine approach to the cases. They have put the claims through their administration system and, in many cases, accepted the first offer from the Department of Trade and Industry. The work has not been checked and so the firms have settled the cases for much less than other solicitors could have achieved. That is another scandal that the Law Society should address.