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Hearing Loss (Coal Industry)

I shall proceed studiously, carefully and cautiously to outline the issues that I wish to raise about the scheme—or the lack of a scheme—that the Government operate for coal industry hearing loss claims. It is not a new matter. Such claims have been submitted over many years; the vast majority were settled 10 or more years ago through the iron trades scheme, which itself wound up about six years ago. I want to consider what has happened since then, and to ask some questions. For the benefit of the Minister, and to give his officials the maximum time to delve into the issue, I give notice that one of my questions will be about the levying of VAT on costs, particularly those of the Union of Democratic Mineworkers. I have asked various parliamentary questions during the past year on whether the UDM has had to pay VAT on its costs. I give the officials the maximum time to clarify matters, should the Minister care to respond on that point. I shall start with how the system used to work. Until six years ago, the costs paid by the Department for Trade and Industry as the employer, as a result of its Coal Board legacy, were between £600 and £700 a case. That is what solicitors received across the board. A number of solicitors have verified that the figures were in that ball park, and the Department’s statistics, kindly supplied in written answers, demonstrate that that was pretty much the case even six years ago. The vast majority of cases were not legally disputed. Most legal disputes were over limitation, but the vast majority were not disputed and therefore never went near the courts. Since then, we have moved away from that system to a hybrid of bilateral arrangements with certain solicitors and others, and the common law. The position has worsened with the impact of the Conditional Fee Agreements Regulations 2000, which came into force in November 2000. From then, a different approach seems to have been taken by solicitors, which has implications for our constituents and for the Government. I offer the Minister the opportunity to demonstrate that his Department and the Government have higher standards than other employers—as the Government should, given their employer liabilities. First, on their expenditure, the Government have a duty to taxpayers; secondly, as good employers, the Government have a duty of care to current and ex-employees. The difference between good and bad employers is that, faced with compensation claims for an industrial disease, the bad employer does not care how much goes to the men or women making the claim; they care about the bottom line and how much it will cost them. For the Government, the breakdown between the two is equal; the Government want to minimise the amount of taxpayers’ money being spent in toto—rightly so—but they also want to maximise the amount that goes to those who suffer industrial diseases as a result of negligence either of the Government or, as in this case, of the Coal Board, the employer. When considering solicitors’ costs, the past six years provide some interesting reading. Between 2000 and 2006, the increase in solicitors’ costs for hearing loss claims has risen by 78 per cent. That is a significant increase. Average damages have gone down only slightly, but it is fair to say that they have remained on an even keel at just over £2,000 per man. I turn to the costs; I shall give one example, but there are many more—and this is not one of the more expensive ones. In 2001, Beresford, the firm of solicitors, was paid an average per claim of £687. In 2005, that had risen to £1,246. As I said, at 61 per cent., that increase is below the average; the rise for the other solicitors and claims handlers is 78 per cent. That demonstrates a sudden and prominent rise. I shall round the figures downwards; the averages from 1999 onwards are £700, £700, £700, £700, £800, £1,100, £1,100 and £1,200. It is an upward spiral of costs to the taxpayer, but it is not only the Government who are paying more. Strangely, the claimant who wins is paying more. It will be interesting to consider what has happened to some of my constituents. I have with me the minutes of a meeting between Beresford and the UDM. It gives details of how moneys will be transferred between the various agencies. It states that Vendside is ““entitled”” to a share of the client’s compensation. That sums up what was going on. A range of middlemen and women are sticking their noses in. That is the kind of thing happening to my constituents. If someone takes a claim to the UDM, the union might pass it on to a solicitor—perhaps Beresford. But Beresford could pass it on to another company, perhaps Browns. Indeed, I know of a case in which that happened. As a result, a cut of £352.50 goes to Vendside and another cut of about £250 goes to Beresford—before any work has been done by Browns. It gets worse. I have a copy of the standard UDM form that one of my constituents had to use. Stamped over it is ““Walker and Co.”” and in the corner of the form I see this:"““When instructing Melex, the referral source of this claim should be noted on the letter of instruction.””" It seems a rather odd thing to write on a claim. Going back through the minutes of the meeting between Beresford and the UDM, I see that for medical fees Melex is a middleman broker, as is Walker and Co. They, too, are getting a cut of the money. Frankly, although the question whether my constituent or the Government pay is important, someone is making money out of claims for hearing loss.