A SOUTH Yorkshire law firm which represented thousands of sick miners was lent money by the National Union of Mineworkers in an agreement personally approved by leader Arthur Scargill, a tribunal heard.
Six partners of Barnsley-based Raleys solicitors face allegations of misconduct by the Solicitors Regulation Authority centred around the firm's relationship with the union.
The hearing in central London heard money was deducted from damages paid
to miners for illness suffered as a result of their work, which was then paid to the NUM. The NUM, meanwhile, recommended Raleys to miners and ex-miners.
Raleys is alleged to have persuaded 29,000 claimants to pursue their case through the union "funding arrangement" despite the fact the government was paying the legal fees for successful claims and was not seeking to recover costs for claims that failed.
The tribunal heard the firm earned £72 million for its handling of claims for respiratory disease and a disabling hand condition called vibration white finger.
However, when it was experiencing financial difficulties in 2000, it turned to the NUM for help.
The union approved a £4 million loan to Raleys at an interest rate of 11 per cent, which the firm paid back in full later.
Timothy Dutton QC, for the SRA, asked SRA investigator Martyn Duerden who he believed had organised the loan.
"The correspondence that I have seen and the notes that I have seen indicate that it was Mr Arthur Scargill who was the person who was the conduit for the loans," Mr Duerden said.
Extracts of an interview carried out with the six partners in April 2005 were read out.
Under cross-examination, Mr Duerden was questioned over the fact that concerns had been raised about taking deductions from compensation payments before the SRA investigated Raleys.
Gregory Treverton-Jones, for Raleys, told the hearing that in November 1999 Kevin Barron, MP for Rother Valley, had complained about what he described as a "scam" involving Raleys passing on a three per cent slice of miners' compensation to the NUM.
The partners - Firth, 60, Jonathan Markham, 46, David Barber, 44, Carol Gill, 38, Jim Gladman, 49, and Katherine Richards, 40, who no longer works for the firm - are alleged, through their relationship with the NUM, to have "compromised their independence and integrity and duty to act in the best interests of their clients." All six deny any wrongdoing.
The tribunal, due to last until January 30, continues.
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