Law firms that profited from handling compensation claims of sick miners may have to pay back tens of millions of pounds to the Department of Trade and Industry (DTI) following a High Court ruling.
The news comes just weeks after The Lawyer revealed that the British Coal compensation saga has seen lawyers scoop more than £800m of taxpayers’ money in legal costs for handling coalminers claims (9 April).
In the recent High Court ruling Mrs Justice Swift held that lawyers had been paid too much for processing claims which had been fast-tracked.
Swift J noted in her judgment that a detailed study of the time spent by solicitors on each coal claim “gives rise to the strong inference that the work has been significantly less onerous than had originally been anticipated”.
The money law firms are expected to payback to the Government is estimated to be in the region of £100 million.
The DTI, which has responsibility for the liabilities of the former British Coal, had appealed against the level of costs it was being forced to pay solicitors for each claim settled under a fast-track procedure which was introduced in 2005.
The fast-track or optional risk offer schemes (OROS) were set up to speed up the settling of respiratory claims, many of which were taking several years to complete with the result that thousands of former miners died before they received any damages.
For the families of those who had already died who were making claims on behalf of deceased miners, the fast-track process removed the need to pass a rigorous testing of their eligibility.
The process meant solicitors, who typically need to spend a maximum of seven hours working on each fast-track claim, would have to spend less time and therefore require less pay for handling the claims.
For their time they were being paid £1,769 plus VAT for each deceased claim and £1,561 for each live claim, however Mrs Justice Swift has now reduced this to £1,192 and £1,103 respectively
The amount is still higher than the amount 58,000 miners received in compensation - for 4,000 this was less than £100.
An estimated £25 million will be saved from claims which have not yet been settled, while the bulk of the money, £74 million, has already been paid to solicitors’ firms and should be paid back.
Partner Andrew Tucker from Irwin Mitchell instructed David Allan QC of Byrom Street Chambers as lead counsel for the claimants, the British Coal Corporation Respiratory Disease Litigation Solicitors' Group. Nabarro partner Gareth Watkins instructed Michael Spencer QC of Crown Office chambers for the DTI.