OVERCHARGING: law firms told not to claim costs exceeding those in government agreement

The Law Society is writing to all firms that handle mining compensation cases to warn them off claiming costs exceeding those fixed by a government handling agreement, amid complaints by MPs that some are overcharging.

The move follows a policy statement from the Society's compliance board, advising that firms claiming more than the 1,800 specified in the Department of Trade and Industry agreement - which governs chronic obstructive pulmonary disease and vibration white finger cases - should be regarded as having provided an inadequate professional service.

Where there is evidence that the solicitor took advantage of the client, it is likely to amount to misconduct.

In both cases, the bill will probably be reduced to nil and the firm required to pay back the client's costs.

Solicitors will only be allowed to charge extra if it was fully discussed with the client and the amount is reasonable.

The second proviso will be based on whether the costs exceeded 1,800 or more than a quarter of the damages, and whether the firm considered the risk of the case failing when it determined the additional charges.

Law Society chief executive Janet Paraskeva said the principles were now clear and would be delivered in writing shortly.

'Additional charges in these cases cannot be justified unless clients were given all the information they needed to make an informed decision and unless the additional charge was itself reasonable,' she stressed.

The Society has already relaxed its rules on complaints after 96 MPs signed an early day motion complaining that some solicitors were indulging in the 'deceitful practice' of imposing additional charges in mining claims (see [2003] Gazette, 11 December, 1).

However, more than 50 MPs have now signed a separate motion calling for an examination of the fee structure in such cases.

It said that although some firms had repaid success fees, all solicitors who claimed an uplift should be forced to pay back the money.

Paula Rohan