The society’s inquiry — its largest into solicitors’ conduct — involves several teams of investigators. Its scale emerged in the High Court yesterday at an extraordinary review of the miners’ scheme after revelations in The Times that a police fraud inquiry had been started into leading officials and employees at the Union of Democratic Mineworkers (UDM).

Mick Stevens, the union’s vice-president, and Clare Walker, of Vendside, a claims-handling company wholly owned by the UDM, have stepped down from their posts pending the outcome of the police inquiry.

Police are investigating payments made by two firms of solicitors, Doncaster-based Beresfords, and Wake Smith, of Sheffield, to companies associated with the UDM. Timothy Dutton, QC, told the court that the Law Society had received 402 complaints about alleged wrongdoing and was “profoundly concerned by the harm caused to the reputation of the profession”.

Sir Michael Turner, the judge who has overseen the miners’ compensation litigation since 1995, told the court that he had been unaware, when the agreement for respiratory disease was signed by the Department of Trade and Industry and the claimants’ solicitors in 1999, that the DTI had also signed a separate agreement with the UDM and Vendside.

This agreement has allowed UDM/Vendside to earn £19 million in costs, paid by the DTI, for settling claims in-house.

The union has also chosen to refer more than 10,000 of its claims to a select group of outside solicitors, including Beresfords and Wake Smith, which have been paid a total of £25 million for settling UDM cases. John Cooper, QC, representing the DTI, said that the department’s role in the compensation scheme ended once payments had been made.

James Goss, QC, for the UDM, defended the union and the reputation of Miss Walker and Mr Stevens, who have not been charged with any offence.

Alan Gowers, QC, for Beresfords, said the firm handled claims with “great care, professionalism and efficiency”. There was no basis for any insinuation that Beresfords was implicated in fraud, he added.

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