Media centre
Solicitors Regulation Authority wins case on miners' compensation
29 June 2007
A Welsh firm of solicitors has to repay about £160,000 to miners following a hearing at the Solicitors Disciplinary Tribunal (SDT) this week.
Gabb & Co from Abergavenny and Crickhowell agreed to repay the money which had been deducted from miners' damages and paid instead to a claims company.
A partner in the firm, Glyn Maddocks, also admitted five breaches of professional rules and was fined £15,000 and ordered to pay the costs—estimated to be £60,000.
Antony Townsend, chief executive of the Solicitors Regulation Authority (SRA), said: "Our successful prosecution sends a message that we are determined to see these cases through in the interests of miners. It is the third successful prosecution we have brought and there are at least 14 more to come, many of them involving much larger sums.
"We hope that other solicitors will wake up and understand that repaying improper deductions from miners' damages is in their clients' best interests. Failure to repay may aggravate any misconduct, and will not be tolerated by the public, the SRA or the profession. As a result of the combined efforts of the SRA, the Legal Complaints Service and the DTI, solicitors have agreed to repay well over £3 million to miners. We will continue to pursue those who will not behave ethically."
Mr Maddocks admitted five charges. The SDT commented that it had fined him the maximum on one charge, £5,000, as he failed to recognise a conflict between his firm's interests and those of his clients by virtue of his firm's relationship with a claims introduction company, IDC. Other admitted allegations included that he failed to consider the terms of agreements entered into between clients and IDC and the impact of the claims handling agreements on the charges made by IDC for their services to clients, and that his firm had paid unlawful "referral fees".
Opening the case, Timothy Dutton QC for the SRA told the Tribunal that Gabb & Co had bought the miners' cases from IDC and had paid them over £110,000. IDC had also been paid over £200,000 from clients' damages in accordance with the agreements clients and IDC had signed. Mr Dutton described these agreements as potentially very prejudicial to clients. If a miner changed solicitors to a firm not approved by IDC, the contract provided that he would be liable to IDC for any financial loss they suffered. Mr Dutton also described the supposed benefit of the contracts for clients as "illusory". Mr Maddocks had described the agreements as like insurance contracts, but later admitted that, at the time, IDC was not an insurance company.
Gabb & Co agreed to write to all miners' compensation clients who signed agreements with IDC after the government set up the miners' compensation schemes for respiratory disease and vibration white finger, and offer to repay the money it had deducted. The law firm also agreed to repay clients whose cases were settled within the government schemes but who signed agreements with IDC beforehand, if those clients make a complaint. Mr Dutton told the SDT that failure to comply with the agreement will be considered by the SRA to be misconduct.