A new row over solicitors' handling of mining claims blew up last week after a government minister accused firms of agreeing illegal retainers with clients and charging 'excessive' success fees and insurance premiums.



A House of Commons debate on hearing loss cases - for which, unlike other categories of miners' personal injury claims, no formal government compensation scheme exists - was told that, over the past five years, solicitors' costs have risen from an average of £700 per case to £1,200, while the average damages pay-out has remained static at around £2,000.



Some 40,000 claims have been submitted since January 1997, with almost £70 million paid out in compensation. The Department of Trade & Industry (DTI) has costs agreements in place with some firms of solicitors bringing large numbers of claims, but other firms are operating under conditional fee agreements (CFAs).



Labour MP John Mann, who instigated the debate, said the situation had worsened with the impact of the CFA Regulations 2000. 'From then, a different approach to hearing loss claims seems to have been taken by solicitors, which has implications for our constituents and for the government,' he said.



Energy minister Malcolm Wicks largely agreed, saying: 'I am concerned that some of the contractual arrangements entered into by some claimant representatives may breach either the regulations or the professional code of conduct for solicitors.'



The DTI has been disputing costs where appropriate, although Mr Wicks said the number of challenges has been falling. He said: 'I understand that, in some cases, the claimant's representative is withholding part of the compensation due in order to cover interest payments that accrue while the costs element is in dispute. That is, to put it mildly, disappointing, but it is for the Law Society to consider whether solicitors are acting appropriately in those circumstances.'



Mr Wicks added that he was concerned about some of the insurance premiums claimed - 'those do not always appear to be good value for the claimant' - as well as the success fee, which is 'invariably 90-100%'. He said: 'I believe such claims to be excessive, given the nature of the cases that have been brought.' He also reiterated his 'disgust' at reports that solicitors are deducting money from claimants' compensation.



A spokesman for the Law Society's Consumer Complaints Service said: 'We have not received any complaints on hearing loss yet, but we do anticipate there may be some in the future. We took a close note of the debate.'



Mr Wicks pledged to bring up his concerns at a meeting with the Law Society scheduled for next month.



By Neil Rose