Thursday, 11 December 2008

Truth repeats itself

I remember seeing the film about the US lawyer who obtained compensation for people living near a chemical plant. In the movie, Erin Brockovich, played by Julia Roberts, uncovered a conspiracy involving contaminated water which was making local residents sick. She helped to secure the largest settlement in United States history- 333 million dollars.
By signing up a considerable number of claimants, all of whom agreed to pay a relatively small proportion of any reward, her firm made considerable profits. Nothing legally wrong in that; open to personal interpretation as to the moral angle.
Now we have the story here in UK of a legal firm criticised for a repeat of Erin's activities. The senior partners in a firm of South Yorkshire solicitors have been paid almost £30 million for settling thousands of compensation claims on behalf of dead or sick miners. Until late 2003, Beresfords’ head office was to be found among a shabby line of redbrick terraced buildings on tired and dust-stained Balby Road in Doncaster. Near-neighbours on the street included a Chinese takeaway and Lorraine’s CafĂ©. The premises are now boarded up and for sale. Beresfords no longer needs them because in November 2003 the firm moved into a luxurious £4.8 million lakeside development at Quay Point in Doncaster. An ocean of shimmering glass fronts the new 38,000sq ft office, big enough to house the 200 employees who, the solicitors’ website announced in 2003, would be housed together for the first time since the rapid growth of the firm. When the firm’s three partners — Jim Beresford, 55, his daughter Esta, 27, and Doug Smith, 48 — gaze from their “magnificent boardroom overlooking the lake”, they may well reflect on the wisdom of recognising the potential for expansion and glittering profits via the coal health compensation schemes. To date, Beresfords — which in 2004 was describing itself as “a unique law firm . . . dealing with industrial disease and personal injury claims only” — has registered 80,474 chest disease claims on behalf of miners and their families, more than any other solicitors’ practice in the country. Only 15,713 — less than 20 per cent — of those claims have so far been settled, yet the Department of Trade and Industry has already paid Beresfords a total of £27.2 million in legal costs. If all the remaining cases were successfully settled on the same basis, the firm potentially could receive a further £100 million from the public purse. Beresfords has enjoyed a close working relationship with the Union of Democratic Mineworkers and Vendside, the claims-handling company owned by the union, which chose to pass on several thousand of its cases to be dealt with by the Doncaster solicitors. And as the three leading individuals at the UDM have flourished financially, so have their friends at Beresfords. The profits allocated to Mr Beresford in 2002 and 2003, the most recent year for which his limited liability partnership has returned a financial statement, totalled £1.4 million. Meanwhile, Mr Smith has been busy spending his money. In November 2003 he sold his modern, red-brick house at Tickhill, near Doncaster, for £340,000. Three months earlier he had spent £840,000 to buy Noblethorpe Hall, a Grade II-listed Victorian country property with seven bedrooms, four reception rooms, grand hall, scullery, butler’s pantry and cellars, set in 18 acres of parkland, including a ha-ha and folly. In the past few weeks Mr Smith has also spent more than £200,000 on two cars, an Aston Martin DB9 and a Bentley Arnage.
Solicitors Jim Beresford and Douglas Smith have been found guilty of misconduct by the Solicitors’ Disciplinary Tribunal in London over compensation payouts for sick miners.
The two former senior partners faced 11 allegations of serious professional misconduct. They were accused of conduct unbecoming a solicitor in failing to represent the best interests of their clients, misleading a government minister, breaching referral rules and entering into “sham arrangements”.
The tribunal found eight out of the allegations against the lawyers proven.

Chairman David Leverton said: “If ever there was a group of persons who needed the full care and attention from solicitors, it was these miners. Mr Beresford described himself as an entrepreneur. Unfortunately, his attitude allowed himself and Mr Smith to put commercial goals before his clients’ best interests.”

The lawyers were also accused of not giving adequate advice and entering into contingency fee deals against their clients’ best interests. Both men denied the charges at the tribunal hearing last month, which heard that up to 30 per cent of a miner’s damages could be deducted by Beresfords. The compensation scheme was set up by the Government because of British Coal’s lack of safety standards and led to hundreds of thousands of claims from former miners and their families.The Department of Trade and Industry (DTI) agreed to pay lawyers’ fees in successful cases and it was also agreed that in unsuccessful cases miners would not have to bear costs.Some miners claimed they were not told what compensation they might obtain.

Beresfords expanded rapidly with the advent of the coal claims, acting in more than 83,000 cases of chronic obstructive pulmonary disease and more than 14,500 cases of Vibration White Finger (VWF), a painful condition caused by working with vibrating tools.

Beresford and Smith’s joint earnings went from more than £182,000 in 2000 to £23,273,256 in 2006, the tribunal heard. But Timothy Dutton QC, appearing for the Solicitors’ Regulatory Authority (SRA), said charging conditional or contingency fees over and above those set out in the scheme was “unacceptable”. In one case, the firm deducted a “success fee” from the widow of a miner, leaving her with a total payout of just £217.73, the tribunal heard. The law firm argued there was “absolutely nothing wrong” with earning substantial fees from its business conduct. The tribunal panel will now decide what penalties to set.

I like it when people such as this get their come-uppance.

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