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February 19, 2009

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Solicitors compromised duty to act in best interests of sick miners

Three solicitors have been suspended after breaching regulations that

allowed their firm to collect £32m in fees from miners claiming

compensation for vibration white finger and respiratory disease.

The men, all partners at Yorkshire law firm Raleys Solicitors also failed to properly advise the miners – some of whom could not read or write – about claims-handling arrangements and encouraged them to sign an agreement that was not necessarily in their best interests.

According to the Solicitors Disciplinary Tribunal, which passed down its judgement on 17 February after a 20-day hearing, the partners also compromised their independence and integrity through their close ties with the National Union of Mine Workers (NUM). The firm paid the NUM a percentage capped at £750 of the compensation obtained in each case, plus an allowance for limited membership of the NUM for the length of time it took it to obtain compensation for each miner. These deductions were made as part of an agreement with the union, which miners signed before their claim commenced.

The company dealt with 68,000 claims by miners for vibration white finger and respiratory disease from 1999, when the claims-handling arrangements began, until these compensation schemes closed in October 2002 and March 2004, respectively. Between 2003 and 2005, the firm’s two senior equity partners, Ian Firth and David Barber, took as their share of the profits in these agreements £9.9m and £7.2m, respectively.

The Tribunal confirmed that Raleys had provided a good service as far as pursuing claims was concerned, and had not taken any monies for itself from amounts of compensation obtained for miners. However, claimants were not informed that there were other solicitors who might handle their claim without making any deduction from their compensation.

In giving evidence to the Tribunal, some miners said if they had been told of alternative funding options and the way in which the claims-handling agreements worked then they would not have signed the NUM agreement. But, according to the Tribunal’s findings, Raleys had “already made up its mind that the NUM agreement was in the best interests of the client and encouraged all clients to sign up to it”.

The Tribunal also heard how Firth agreed a deal, in February 2004, with Zuko Legal Ltd to purchase 19,000 claims, despite knowing that this breached a regulatory code of conduct. The action, said the Tribunal, amounted to “a deliberate calculated risk on the part of the partners, with the object of making a lot more money”.

Firth, Barber and another senior partner, Jonathan Markham, were suspended from practice for four years, two years, and six months, respectively. Three junior partners – Carol Gill, James Gladman and Katherine Richards – were each fined £10,000.

All six lawyers were ordered to pay a proportion of the costs, with Firth told to pay 50 per cent.

Responding to the Tribunal’s decision, Ian Firth said: “In the six years up to 2005, at which point the amounts of subsequent awards were artificially depressed by the Government’s introduction of a fast-track variation to the scheme, Raleys’ clients were averaging £8500 per claim – up to four times the averages of some other law firms in the region. Those whose claims benefited from the NUM agreement contributed a small portion, on average £250, to the union from their compensation payments.”

He continued: “The partners and our loyal, hard-working staff, many of whom joined Raleys to pursue a vocation of fighting for justice for vulnerable individuals against powerful corporations, have been devastated by the accusations made against the firm, and will feel even more downhearted by these decisions of the Tribunal.”

Firth added that the firm is considering whether to appeal to the High Court.

 

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