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11/04/2007

costs outrage

The issues of fees in miner’s white finger and respiritory disease claims, following the institution of a compensation scheme, has been rumbling on for some time. All hell seems to have broken loose with the report that Beresfords, a small firm that, via some sort of association with the Union of Democratic Mineworkers (UDM), handled many of the claims made £20.4 million (pre-tax) in one year, including a personal profit of £16.8 million (pre-tax) for the lead partner of three.

This has been met with howls of outrage, not least because, as the Times points out, more than half of the miners, or their estates, only received £2000 or less. The usual misunderstanding that somehow the solicitors’ fees came out of the miners’ money raises its head all over the place. Let’s get that straight, it didn’t. The solicitors’ fees made no difference to the awards made.

There was a flat fee from the DTI, apparently of £2125 per case. As far as I can tell this would include disbursements for a medical report.

Beresfords claim to have handled 92400 claims for VWF and respiratory combined. I make this a total of £196,350,000. This makes Beresfords’ profits an average of 10% (or 9 and a bit) of the fee. Given that there was little to do apart from obtain details and a medical report, this is hardly an impressively high profit rate (hefty overheads for a three partner firm perhaps?). But it puts their proud boast to have obtained £180 million of compensation into perspective – £16 million less than the fees paid.

The set fee was a matter for the DTI. It is their problem, not that of the solicitors. What might be a problem for some of the firms is the apparently ongoing Serious Fraud Office investigation into financial relationships with the UDM, never the least shady of unions.

Beresfords might also have a more pressing problem. According to the Times

The coal-fired surge in the firm’s fortunes is also reflected in its glittering head office. Until 2003, Beresfords operated from a cramped, redbrick building on one of the main arterial routes into Doncaster.

Following a £4.8 milion investment, its home is now a glass-fronted lakeside development covering 38,000sq ft at the town’s prestigious Quay Point business park.

But miners, like mines, are a dwindling resource, victims of the 1980s in several senses. I hope the firm owns that Lakeside development, because they might need the money. Still, at almost 11,000 sq ft per partner, you’ll never run out of meeting rooms in the meantime.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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