Scottish law firms take a slice of abuse victim pay-outs

Law firms have been criticised over how much they are charging child abuse survivors to help secure compensation.

Redress Scotland allows people abused in care to apply for one-off payments between £10,000 to £100,000.

Solicitors making applications on behalf of survivors are meant to be paid directly from the scheme.

But some legal firms are shunning the fixed fee structure and instead making arrangements with clients, which can see them paid up to five times as much.

In countries like Ireland, the redress scheme was mired in controversy over how much money legal firms made from it.

So the Scottish scheme was set up to pay legal fees of between £450 and £2,000 directly to solicitors for their work.

A BBC investigation has discovered some leading law firms - including Scotland's biggest personal injury solicitor Digby Brown - are not taking these fees and instead billing clients up to 10% of their compensation award, which can be as much as £10,000.

Digby Brown said clients were clearly told what the pre-agreed fees would be and said they reflected the value of the investigative work required.

But Helen Holland, of in-care abuse survivors charity Incas, said the scheme had been set up so that all legal fees were paid by the state not the survivor.

She said: "A lawyer representing a survivor should be charging Redress Scotland for their legal fees. They shouldn't be charging survivors a percentage."

Abuse charities and some solicitors have also criticised the practice, with one Tory MSP saying he had warned that legal firms would exploit the "loophole".

The redress scheme, which was launched in December 2021, covers physical, sexual and emotional abuse and neglect.

It is open to people who were under 18 before December 2004 and were cared for in a children's home, including those run by religious orders, or in foster care.

Compensation is paid for by organisations responsible for abuse and by the taxpayer.

Those who accept cash must sign a waiver that they will not make civil claims.

The BBC reported in November that some people were being put off applying by delays, a lack of communication and an overly-complicated process.

Last month, Deputy First Minister John Swinney said more than £11m was paid out from the compensation scheme in its first year.

He said 277 people were paid in 2022 from 1,960 applications.

One of those who received a pay-out is Joanne Peacher, who was raped by a priest in a Nazareth House children's home in Glasgow when she was just eight years old.

The 54-year-old received an undisclosed award from Redress Scotland in January.

Ms Peacher applied for the award in February last year and asked Digby Brown, Scotland's biggest personal injury firm, to help with her application.

She is unhappy that the firm is asking for 10% of her compensation.

"It was me who was injured, not them," she said. "I think they should be paid, just not 10%. It's too much."

Her husband, Andrew, said the solicitors gave him the impression that the government's contribution would not be enough to do the job properly.

"But I feel if we had filled the forms in ourselves it would be like applying for a benefit," he said.

"It does justify a payment but not 10%."

Mr Peacher added: "The fee is excessive. The government scheme was obviously put in place for a reason - to pay lawyers the appropriate rate for the work they do.

"To get it off the survivors is an insult. It's wrong, it's immoral."

Solicitor Simon Collins, of Collins & Co, which represents abuse survivors, said his firm and many others only accessed fees paid by Redress Scotland.

Mr Collins said no money from survivors should be paid to solicitors.

"Solicitors should be paid but firms should not charge percentages of the survivors' pay-outs," he said.

"This is not a windfall for survivors but redress for severe trauma experienced in childhood."

Scottish Conservative justice spokesman Jamie Greene said his amendment to close the loophole was voted down when the law was passed.

"To now learn that lawyers have taken such a significant chunk of the compensation paid out to survivors is galling but unsurprising," he said.

Scottish Liberal Democrat justice spokesman Liam McArthur said: "The rules underpinning this scheme are supposed to prevent lawyers from swallowing the compensation, but it seems that is not happening."

Digby Brown made £18m in profit in 2022, according to its latest accounts.

Its highest-paid lawyer was paid more than £2m in the same year.

A spokesman for the firm said clients were told clearly what the pre-agreed fee would be after it had carried out an initial investigation to explore all the legal avenues open to the client.

He said: "It is our legal duty to investigate and confirm all the circumstances, evidence and routes to justice before providing the best possible legal advice because survivors have the right to know all their choices and they do not get any kind of help like this from redress or government call handlers."

The spokesman added: "We do not charge a flat percentage for redress applications and any fees incurred are deferred until the case has settled and reflect the value of the exhaustive investigative work required to navigate and undertake Redress applications."

The Law Society Scotland, which represents solicitors, said legal firms were free to choose between being paid by their clients or the authorities.

A spokesperson said: "We are currently working to facilitate training from Redress Scotland to relevant solicitors so they better understand how the scheme works, including fees."

The Scottish government said: "Scotland's Redress Scheme has been designed to enable applications to be made without the need for a solicitor.

"To allow applicants to make that choice without having to fund it themselves, reasonable legal fees up to set maximum levels will be paid for by the scheme, in addition to the redress payments.

"We do not expect applicants to contribute to legal fees and this should be agreed with their solicitor at the outset.

"Applicants are free to appoint their own solicitor and come to their own arrangement on the payment of fees if the solicitor chooses not to have their fees paid by the redress scheme."