Solicitors earning £23m a year accused of creaming off cash from sick miners

Published on Monday 17 November 2008 21:40

TWO members of a law firm that specialises in winning personal injury claims for sick miners were accused yesterday of serious professional misconduct.

James Beresford, 58, said to be Britain's highest-earning solicitor, and Douglas Smith, 51,

face 11 allegations of misconduct relating to taking cuts from money paid to miners under the government's coal health compensation scheme.

They are accused of failing to act in the best interests of their clients, after making millions of pounds from miners' personal injury claims.

The pair, from Beresfords Solicitors, in Doncaster, South Yorkshire, appeared before the Solicitors' Disciplinary Tribunal in London.

Outlining the allegations, Timothy Dutton, QC, appearing for the Solicitors' Regulatory Authority (SRA), said the pair had failed to act in the best interests of their clients, had failed to give adequate advice, had broken rules governing solicitors' practice, and had entered into conditional and contingency fee agreements against their clients' best interests.

Mr Dutton told the court: "We say that the breaches were serious enough to constitute conduct unbefitting of a solicitor."

He told the court it was not prohibited for law firms to charge other fees, but added: "We will be submitting that the charging of conditional fees over and above those set out in the scheme, or contingency fees, was unacceptable."

The compensation relates to miners suffering conditions such as respiratory disease and vibration white finger due to British Coal's lack of safety standards from the 1970s and onwards. The court heard that Beresfords acted in more than 83,000 cases of chronic obstructive pulmonary disease and more than 14,500 cases of vibration white finger.

Mr Dutton gave the example of Rodney Bochenski, who had a claim against British Coal after he suffered vibration white finger. He entered into a contingency fee agreement with Beresfords in January 2000, which meant that if he won his claim, the law firm would receive 25 per cent of the damages.

"It is our contention that the information provided to him (Mr Bochenski] was inappropriate and inadequate," Mr Dutton said. "There was no disclosure given to him that the DTI (Department for Trade and Industry] would be paying the respondents' costs."

Of the 18,517.81 damages won by Mr Bochenski, 4,795.72 was deducted by Beresfords under the contingency fee agreement. This was on top of fees the law firm received from the DTI.

The court heard that Beresfords "expanded remarkably with the advent of coal claims". In 1999, the company had an annual fee income of 684,152. By 2004, it had a gross profit of 8,758,743, and in 2006 the profit had risen to 36,205,805.

Beresford and Smith's own earnings went from more than 182,000 in 2000 to 23,273,256 in 2006, and the company expanded from ten employees in 1998 to 244 in 2004.

The miners' cases also highlight the wider debate over the ethics of referral fees, where payments are made for work referred to solicitors by third parties, such as estate agents, insurers or unions.

But Glen Millar, a solicitor-advocate with Thompsons solicitors, said last night that the issue had never arisen in Scotland as solicitors north of the Border never took a "success fee".

"It has never been a problem up here," he said. "Scots firms have acted above board. "We have only taken a fee from the DTI agreed fee."

It is understood Beresfords had some claimants in Scotland, who had used claims companies rather than solicitors. It is unclear how many people were affected.

A spokeswoman for the Law Society said there had been no complaints made in relation to lawyers in Scotland.

The SRA said about 25 firms had so far been referred to the tribunal in relation to miners' compensation cases, with more to follow.

Some 40 investigations have been concluded and the tribunal has fined eight solicitors up to 15,000 each and reprimanded three others.

If Beresford and Smith are found guilty of professional misconduct, they face the possibility of being struck off, suspended or fined 5,000 for each allegation. Both men deny the charges.