Solicitors 'bemoaned' fees refund

Mr Beresford earned almost £17m in 2006

Two solicitors thought it was "unfair" not to be able to take success fees of up to 25% from compensation pay-outs to sick miners, a tribunal has heard.

Jim Beresford, 58, and Douglas Smith, 51, of Doncaster-based Beresfords Solicitors, are accused of dishonestly taking cuts from miners' compensation.

The Solicitors' Disciplinary Tribunal heard the men earned millions through a government compensation scheme.

Both have denied 11 counts of serious professional misconduct.

The hearing was told the two solicitors earned the money through claims from the government's coal health compensation scheme.

The tribunal in central London was told the men took up to 25% of compensation awards but that the firm ended these types of agreements for coal claims in 2002 and subsequently refunded the money.

We believe it is a niche market, the biggest niche market is industrial disease Solicitor Jim Beresford

When asked about the company's decision to repay success fees, the hearing was told the solicitors reportedly said they "thought it was unfair".

Timothy Dutton QC told the tribunal that 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.

This was despite already having claimed £2,431.08 in costs from the Department of Trade and Industry (DTI).

Mr Dutton, acting for the Solicitors' Regulatory Authority (SRA), said the solicitors had failed to act in the interests of clients.

'Eye on market'

He said they had not given adequate advice and had entered into conditional and contingency fee agreements against their clients' best interests.

Giving evidence, Martyn Durdon, from the SRA, who carried out an investigation into the firm, said he questioned both men in 2004 about the rapid growth of the company, which by then had gross profits of more than £36m.

Mr Durdon said Mr Beresford told him: "I would say it's because we are entrepreneurs with an eye on the market and it's because of advertising.

"Our reputation is a good one, lots of growth, we are marketing-influenced and commercially-minded.

"We believe it is a niche market, the biggest niche market is industrial disease."

'Disguised fees'

The firm acted in more than 83,000 cases of chronic obstructive pulmonary disease and more than 145,000 cases of vibration white finger (VWF).

The court was earlier told that under government procedures, the DTI had agreed to pay lawyers' fees in successful cases.

The tribunal heard Mr Beresford and Mr Smith made arrangements with the Nottinghamshire-based Union of Democratic Mineworkers (UDM) and its support company, Vendside, that breached solicitors' practice rules.

Mr Dutton said payments made by Beresfords to UDM/Vendside were effectively referral fees, but were disguised as being union subscriptions.

The court also heard that in January 2002 the firm went on to make an independent arrangement with Clare Walker, who worked for the UDM but who had also set up her own company, Walker & Co.

Mr Dutton said Beresfords paid Walker & Co a total of £736,186.30 under a "claims handling agreement".

He said the money was paid directly to Ms Walker and it was instructed all correspondence regarding the arrangement be directed to her home address.

Mr Dutton said the fees paid to Ms Walker were "disguised" as being for "marketing, vetting and administration work" but were in fact referral fees.

The hearing continues.