Ministers lambasted the firms for deducting money from payments to elderly pitmen suffering from chronic chest diseases as a result of their work.

They accused the firms of manipulating the world’s largest personal injury compensation scheme to create a “gravy train” for solicitors. The Government was responding to an independent review prompted by disclosures in The Times about the huge earnings made by lawyers from its £7.5 billion scheme.

More than a dozen firms have been paid more than £10 million by the Department of Trade and Industry for settling claims. Six have earned more than £30 million and the top three, more than £50 million.

Yet some firms have successfully demanded money from their claimants, who suffer from chronic lung disease or a crippling hand condition, in addition to the fees they were already being paid by the DTI.

Malcolm Wicks, the Energy Minister, said that he was seeking an urgent meeting with the Law Society to discuss how the miners’ claims had been handled.

The move has been welcomed by miners’ action groups but many said that they were still bitter at the way they had been treated.

“They shouldn’t have deducted it in the first place and it’s right that they should pay it back,” said Max Brown, a retired miner who had more than £1,000 deducted from his compensation. “At least Dick Turpin wore a mask.”

The external review, published yesterday, was ordered by the DTI in July after disclosures in The Times about the financial relationship between a number of law firms and leading officials at the Union of Democratic Mineworkers. The disclosures are now the subject of an inquiry by the Serious Fraud Office.

Mr Wicks said: “If anyone has in any way been misinformed or hoodwinked into making a contribution to a trade union on the grounds that this is paying for their legal costs, when the legal costs are actually being paid by my department, then I think that’s outrageous. That’s very, very wrong.” He said that he expected the Law Society to rise to the challenge and “be seized by the importance of taking these issues forward rigorously and proactively”.

The report largely exonerates the DTI from any blame for running of the scheme, which was set up in 1999.

It concludes: “Claimants should now be able to seek the reimbursement of any fees they may have paid [to solicitors] in the past if, when they made their claims, they were not told that they could receive a similar service elsewhere [from another firm of solicitors] at no extra cost.”

Mr Wicks said that he fully accepted the recommendation and cautioned that the deductions made by solicitors on behalf of the UDM and the National Union of Mineworkers were also under scrutiny.

The Times disclosed last month that Raleys, a Yorkshire-based firm that has been paid £53 million in DTI fees for its work on 28,000 claims, also deducted an estimated £10 million from miners’ compensation on behalf of the NUM. The firm faces claims that it mislead clients into believing that the union was funding their claim.

Mr Wicks said that he would seek an urgent meeting with the Law Society, which is already conducting the largest professional misconduct investigation in its history into more than 30 solicitors’ firms involved in the coal health scheme.

“There have been some pretty dodgy goings-on and that’s what we need to remedy with the Law Society,” he said.

If every solicitor who has deducted a slice of the compensation awarded to sick miners or their relatives were forced to pay it back, the final costs to the legal profession would be at least £50 million. Some law firms have already agreed, voluntarily, to refund their clients.

A Law Society spokesman said last night that it would welcome a meeting with the Energy Minister but was already dealing with the issue to the “maximum extent” of its powers.

The review team, headed by Stephen Boys Smith, a retired senior Home Office civil servant, also criticised the level of fees paid by the DTI to solicitors, given the modest level of work involved in each claim.

Estimates for the final cost of the scheme suggest that £4.5 billion will be paid in compensation to miners but that a further £1.6 billion will have gone to solicitors in legal fees.

Mr Wicks said: “I think anyone would look rather aghast at the idea that only 65 per cent of the total expenditure will go to miners and their relatives.

He said that he took the report’s recommendations “very seriously indeed”.

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