Thousands of sick miners were misled into handing over millions of pounds to
Arthur Scargill's union by a firm of solicitors that has earned a fortune
from their compensation claims, an investigation has revealed.
Elderly men suffering from chest diseases and a crippling hand condition were
advised to allow the National Union of Mineworkers to fund their legal
claims in return for paying part of their eventual compensation to the
union.
But what the miners were never told was that in reality, the Government — and
not the union — was paying the legal bills for successful claims.
The Government has repeatedly emphasised that “100 per cent of the
compensation that we pay must go to the claimants without anyone else taking
a slice of it”.
The solicitors concerned, Yorkshire-based Raleys, have been paid £53 million
of public money for their work on the cases settled so far.
The NUM has banked an estimated £10 million from the compensation scheme but
has not paid legal costs in any of the 28,000 cases that Raleys has so far
handled.
Some of the money, it can be revealed, has been pledged towards a £10 million
legal action that the NUM is mounting — with the help of Raleys — in an
attempt to win compensation for an osteoarthritic condition known as
“miner’s knee”.
If the group action succeeds, the Government — which took on on the former
British Coal’s liabilities — will face a further multimillion-pound payout
to Raleys. A court date has been set for January next year.
Raleys’ clients, who include the widows and children of dead miners, were
rarely if ever told that they could take their claim to a solicitor who
would not deduct a penny from their settlement.
Leaders of the NUM, whose national headquarters are in Barnsley, South
Yorkshire, have refused to discuss where its cut of the compensation money
has gone and for what purpose it is being used.
But Kevin Barron, the MP for Rother Valley and a former senior NUM official,
described the union’s arrangement with Raleys as “a scam from day one” and
accused Mr Scargill of “abusing the loyalty of the mining communities”. “The
NUM has not put a penny into fighting these cases and they have raked in
millions of pounds for doing very, very little,” he said.
John Mann, MP for Bassetlaw, another coalfield constituency, who has waged a
long campaign against abuse of the scheme, said last night that there could
be no justification for Raley’s actions and demanded that all the NUM money
“be paid back immediately”.
The NUM’s money-making enterprise is the latest scandal to hit the Coal Health
Scheme, which has spun so badly out of control that the final bill — which
was initially estimated at £1 billion — is likely to reach £8 billion.
Of the 750,000 claims that were registered, 390,000 have so far been settled
and damages totalling £2.8 billion have been paid to date. Solicitors’ fees
have spiralled to £665 million.
After earlier revelations in The Times, a criminal investigation is
being held into the actions of senior officials and employees of the Union
of Democratic Mineworkers in relation to thousands of compensation claims.
Malcolm Wicks, the Energy Minister, has also ordered an independent inquiry
into the handling of the coal health scheme by the Department of Trade and
Industry. Its report is expected soon.
Raleys insisted this week that it did not mislead miners when it told them
their claims for chronic chest conditions and vibration white finger were
benefiting from an NUM “funding arrangement”.
Jonathan Markham, a Raleys partner, said that although the firm sent letters
that told its clients that NUM funding was “the best funding arrangement for
your claim”, this should not have been interpreted as meaning that the NUM
was providing financial backing for the claim.
“If the union can get a benefit for its members without the union having to
give up any of its money then it’s going to do that,” he said.
“It’s understandable that they would want to keep that money for when they
really think that it’s right that they spend it. And if they can get the
lawyers to pay for things instead of them then all well and good — they are
doing a good job.”
Raleys is due to appear before the Solicitors’ Disciplinary Tribunal over its
refusal to comply with a Law Society ruling that it should pay £300
compensation to two clients who had complained about the way their claims
were handled.
The society found that the firm had given poor service by failing fully to
explain to clients how their claims would be funded before they signed an
agreement under which part of their compensation would go to the NUM.
The Times understands that a separate and more serious Law Society
investigation is also under way into Raleys’ conduct. The nature of the
allegations has not been revealed.
Shortly before Mr Scargill — now the union’s honorary president — officially
retired in 2002, he forced through rule changes that, according to insiders,
have ensured that he retains huge influence within the national NUM.
Ian Lavery, who was elected unopposed as the NUM’s national chairman in 2002,
and who was arrested six times during the 1984-85 miners’ strike, sees
himself as “the natural successor to Arthur Scargill” and has boasted of
having “absolutely no respect for the police”.
HISTORY OF CRIMINAL INQUIRY
June 28 The Times reveals that a criminal inquiry is
being launched into the relationship between the Union of Democratic
Mineworkers (UDM) and solicitors handling coal health compensation claims
June 29 Brian Wilson, a former Energy Minister, claims that
government officials gave the UDM preferential treatment
July 1 Mick Stevens, the UDM vice-president, and Clare
Walker, the union’s head of claims, stand down from their posts, pending
outcome of a police inquiry
July 6 The Law Society reveals that it is investigating more
than 30 firms of solicitors linked to the £7.5 billion scheme, the largest
inquiry into solicitors’ conduct in its history
July 12 South Yorkshire Police fraud squad raids Miss
Walker’s home
July 20 The Serious Fraud Office takes control of the
criminal investigation
July 22 An independent inquiry is ordered into the DTI’s
running of the scheme
August 3 A government blunder in the contract governing the
scheme will cost taxpayers £5 million
