Wednesday, March 05, 2008

Lawyers condemned as leeching from miners compensation scheme

Taking ten years to receive compensation isn't all that unusual in the legal world when claims cases are subject to long and unnecessary delays ....

However, the miners compensation scheme certainly did see lawyers make a meal of things for themselves ..

The Herald reports :

10-year wait for ex-miners as lawyers earn £1.3bn


Former miners have been forced to wait more than 10 years for government compensation for pit-related illnesses, a powerful committee of MPs said yesterday.

Some even died while their claims were being processed because ministers underestimated the size and complexity of the project, the Public Accounts Committee found.

Solicitors have earned more than £1.3bn in fees for handling the claims, with one firm alone collecting nearly £124m.

Average administration costs amounted to more than the claim itself in more than two-thirds of the cases.

In a highly-critical report the committee said the government had expected about 218,000 claims for lung disease and vibration white finger, with payouts totalling £614m.

There have now been about 762,000 claims which it is thought will cost about £4.1bn once they are all settled, as well as another £2.3bn in administration.

But tens of thousands of ex-miners are still waiting for an offer. Last September there were about 128,500 claims still awaiting settlement.

Some miners had waited more than 11 years between their medical assessment and receiving an offer.

Edward Leigh, the Conservative MP who chairs the committee, accused the Department of Business and Enterprise of having "seriously mismanaged" the schemes in their early stages.

"Its attempt to implement the schemes swiftly, combined with its underestimation of how many claims would be made and how complex some would be, resulted in many claimants having to wait a very long time for the compensation they were owed," Mr Leigh said.

"Some of these were elderly and ill and in no position to wait for years for compensation - in some cases 10 years or more. Some claimants even died while waiting. The taxpayer has also taken a big hit, with the cost of just administering the schemes expected to total nearly £2.3bn."

The restitution packages were arranged after British Coal was found to have been negligent in the cases of ex-workers who had developed chronic obstructive pulmonary disease (COPD) from dust and vibration white finger from equipment in the pits.

But the government failed to get its own actuarial assessment of the likely number of claims and liabilities under the Coal Health Compensation Scheme, instead relying on British Coal's forecasts.

Ministers did not initially realise that deceased miners' claims would be payable to their widows and families.

The cross-party committee also criticised the government's dealings with solicitors, accusing it of "weak" negotiations on their fees which led to higher administration costs.

Of the £2.3bn administration expenses, solicitors' bills accounted for £1.3bn.

The average cost of processing each claim was £3100, more than what two-thirds of miners received in compensation.

Just 10 law firms collected between them £635.8m in fees. The highest earner was Thompsons, which received £123.6m.

The government is chasing up to £100m in repayments from solicitors after a court ruling that certain cases should have incurred a smaller fee.

Some solicitors also effectively double-charged for their services by taking a cut from their clients' compensation packages on top of their government-paid fees.

The Legal Complaints Service believes lawyers owe millions of pounds to tens of thousands of miners.

It is currently contacting every miner covered by the scheme urging them to check whether they had money wrongly deducted.

Mr Leigh said: "There are lessons aplenty here for other parts of government planning and implementing new compensation schemes.

"Far too much money went into the solicitors' pockets."

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