Legal Aid, Sentencing and Punishment of Offenders Bill

Baroness Deech Excerpts

Wednesday 14th March 2012 Lords Chamber

[Lord Martin of Springburn]

My Lords, I wish to speak to Amendment 146 in my name. In doing so, I declare an interest as I have been a member of the Unite union for a long time. I am not having a go at the media on this matter but, often when trade unions are mentioned in the media, reference is made to trade union leaders. Not much is known about the activities of the lay officials and junior officers of a trade union. Tonight we have spoken about asbestos victims. A trade union would probably be the first port of call for a person who felt that they were suffering from the effects of asbestos inhalation. Apart from the serious matter of asbestos inhalation, your Lordships may be aware that even a National Health Service kitchen can be a very dangerous place for workers. They can fall, be scalded or be cut by the knives that they are using. After any injury such as that or any other injury relating to a person’s work, the first port of call is to the local trade union office, and an investigation is made before the matter is referred to a lawyer. Any of us who has run an office knows that photocopiers, heating, lighting and cleaning all cost money. It means that there should at least be some compensation for the trade union that is prepared to try to help that member before the member goes to a solicitor.

[Baroness Deech]

My Lords, I declare an interest as chair of the Bar Standards Board, which regulates barristers and prohibits the payment of referral fees, which we regard as immoral—I think that I am not putting it too strongly—and which we disapprove of because they are anti-competitive.

While I have every respect for my noble friend Lord Martin and for the work that the unions do to help their members, the amendment has brought to mind one of the most reprehensible incidents of modern times relating to lawyers and referral fees. I will not give the House too much detail because it is late at night, and the story is probably well known to noble Lords here, especially noble and learned Lords. When very many miners were sick and 23,000 cases were referred on by the union to a solicitors’ firm, it ended up with reprimand and with the law firm taking far more money than did the sick miners. The solicitors were paying the union, and in the case that I am thinking of the amount came to about £10 million, because 23,500 cases were referred to one firm.

If a firm of lawyers knows that a number of cases of that order are to be referred to them without the firm making any effort, without it going out into the market and proving how good it is, it is not surprising that things went wrong.

[Lord Martin of Springburn]

I know it is late in the evening and I thank the noble Baroness, but I am sure she would agree that not every union or every solicitor would conduct their affairs like that. Tomorrow, there will be unions that refer their members to a solicitor, and they will do so in good faith and in the best interests of their members.

[Baroness Deech]

I am sure that the noble Lord is right, but what I am objecting to is the exchange of money. If you go to the website of the union, you may click through to the page where legal services are offered, click where the page directs you to a law firm, the law firm is named, and then you can continue to click until it says, “For every case referred to this firm, the firm will pay the union a sum of several hundred pounds”. If the unions wish to help their members, it would be very easy simply to refer them to a whole number of local firms without money changing hands. There is nothing to stop the good work done by the unions, which I praise. It is the exchange of money that I object to. In the case that I am thinking of, it was actually public funds that went to the solicitors’ firm. It illustrates what is wrong with referral fees: the issue is treated as commercial and the law firm can sit back, knowing that cases will flood its way, whether it deserves them or not.

There have been other reprehensible incidents such as this, with which I will not delay noble Lords, save to mention one other effect. Given that very large sums of money are paid to the union, whichever union it is, by the law firm, and we know that many unions are inclined to support one political party, we end up with money being paid—very indirectly, I grant you—to the political party because the money is coming from the funds that the union has accumulated, and part of those funds come from referral fees.

If the solicitors can afford to pay £200 a time, or whatever it may be, to the union in return for every case, that must logically indicate that the case could have been handled for less money than was charged. I am by no means saying that that is always bad, but there is definitely a risk in referral fees. In particular, there is a severe risk to the interests of justice where a firm knows that thousands of cases can come its way without it making the effort in the market to get them and handle them well. Therefore, with all due respect, I hope that the amendment will not be pursued, as I do not think that it helps the Bill.