Damages (Asbestos-related Conditions) Bill [HL]

My Lords, I shall speak also to Amendments 10 and 11. The amendments are intended to abolish the recovery of success fees paid to solicitors, after-the-event insurance premiums and "membership organisation" fees paid to unions in pleural plaque claims. Amendment 11 is designed to ban the use of referral fees paid to claims farmers and other intermediaries. In his final report, to which we have referred, Lord Justice Jackson recommended in chapter 10 that the recovery of success fees in certain types of claim be abolished. In chapter 9, he makes a similar recommendation in regard to recovery-after-the-event insurance premiums. I see this as a way of getting rid of disproportionate costs, and I would welcome the Government’s opinion on whether this might not be a suitable suggestion for how to do so. Amendment 11 is intended to permit the Secretary of State to prevent the payment of any referral fee by a solicitor acting on behalf of a claimant to the claims farmer or trade union which introduced that claim to the solicitor. I have already made reference to the miners’ compensation scheme. One of the biggest scandals related to that scheme resulted in the solicitors in question being struck off. There was an unlawful deduction from compensation made by the solicitors, who then paid over some of the sums deducted to a claims-farming company. We must ensure that any scheme promoted by the Ministry of Justice does not fall into the same trap. It is no surprise that, in chapter 20 of his final report, Lord Justice Jackson came out strongly against the use of referral fees in personal injury claims. Paragraph 3.7 on page 199 states: ""Trade unions refer the personal injury claims of their members to solicitors on union panels. Trade unions may charge referral fees, albeit at a lower level than BTE insurers or claims management companies. For example, one union informs me that it receives a referral fee of £200 for every case which proves to be ‘worthy of investigation’"." Paragraph 4.9, on page 204, states: ""I do not accept that referral fees are necessary for access to justice. Claimants with personal injury claims would be well aware of their right to claim damages, even if claims management companies did not exist"." Paragraph 4.11, on page 205, states: ""There is also a wider point. In my view, it is offensive and wrong in principle for personal injury claimants to be treated as a commodity"." That must be the case even where the referral fee is paid out of the claimant’s legal costs. In the scheme proposed by the department, there is presumably no right to recover legal costs and any referral arrangement would have to be financed out of the claimant’s damages. As Lord Justice Jackson rightly concludes: ""The only winners are the recipients of referral fees"." This scheme is being offered by the Government for the benefit of individual claimants and not of lawyers or trade unions. Will the Minister assure the Committee that none of the money to be paid to the claimants under this extra-statutory scheme is likely to find its way into the hands of either the lawyers or the trade unions? I beg to move.