Beresfords Solicitors partners Jim Beresford and Douglas Smith have been struck off after all but three of the 11 allegations of professional misconduct against them have been upheld by the Solicitors Disciplinary Tribunal.
The hearing against Beresford and Smith, who have become multi-millionaires through work on sick miners compensation claims, arose from their alleged conduct in relation to their handling of the claims.
The firm paid a £300 referral fee to claims farmer Vendiside – a firm owned by the Union of Democratic Mineworkers (UDM) – for cases passed on under the guise that this fee would be used as a “marketing/administration/investigative fee”.
The Tribunal today upheld the Solicitors Regulation Authority’s (SRA) claims that was in reality a referral fee and that by attempting to dress it up as a marketing fee, Beresford and Smith had breached the referral fee code (1990).
Furthermore, before UDM clients received compensation, Beresford made a deduction of up to £300 plus VAT, which was given to Vendside “to cover the cost of pursuing the claim”.
The tribunal said: “These allegations that have been proved are serious
allegations. The rules and regulations are needed for the proper conduct of
the solicitors profession. Cases like this have a serious impact on the
reputation of the profession and in the eyes of the public.”
Tribunal chair David Leverson warned that any solicitors that breached the code must expect “severe punishment” and “the tribunal has come to the conclusion that both respondents must be struck off the role as of today”.
Beresfords managing partner Martin Ryan said: “As the SDP has said this is not about negligence or any criminal prosecution…we have managed to get £221m compensation to miners…It must be noted that, as was mentioned in the tribunal, client money was not misappropriated.”
Beresfords will be appealing the findings in the High Court.
As The Lawyer revealed last year, Jim Beresford became the UK’s richest lawyer in the 2005-06 financial year, having taken home a total of £16.8m in the 12-month period.
His firm was one of 30 law firms to take home more than £800m, paid by the Department of Trade & Industry (DTI), for handling claims for coalminers who have suffered from respiratory diseases and vibration white finger (9 April 2007).
Fountain Court silk Tim Dutton QC, who represented the SRA in its case against the firm, said that 84 per cent of its work came from the Government’s miners compensation schemes, which were set up to compensate those who had contracted conditions such as vibration white finger syndrome.
“Every allegation is serious, with some serious enough to see it as conduct unbefitting [of a solicitor],” Dutton told the tribunal.
Upholding the SRA allegations, David Leverson earlier today ruled: “Our view is that the miners were not vulnerable because of their core health but because of their inability to understand the legal documentation and advice. If there was ever a group of people that needed care and skill of solicitors it would be miners.”
He continued: “Careless use of documentation shows their attitude towards their clients. Beresford describes himself as an entrepreneur but his commercial goals were put before the clients best interests.”
In total, Beresfords registered 97,500 claims under what has become the world’s largest personal injury compensation scheme.