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Justice minister failed to declare interest in industry he regulates
Randeep Ramesh, social affairs editor of the Guardian reports that justice minister Jonathan Djanogly failed to declare that his children were minority shareholders in his brother-in-law’s businesses – two firms which advertise accident compensation claims and are part of an industry that Djanogly regulates in government.
Djanogly records in the ministerial register of interests that his “brother-in-law Ben Silk owns Going Legal Ltd and Legal Link Introductory Services Ltd”. According to company accounts, the two firms made £130,000 last year in profits.
The cabinet secretary, Gus O’Donnell, is considering a complaint from Labour’s justice spokesman, Andy Slaughter, that Djanogly faces a slew of conflict-of-interest claims over plans to cut legal aid budgets and curb payments.
An investigation by the paper also revealed that the minister could personally profit from the changes. In the past three years, Djanogly has been entitled to an average annual payout of £41,000 from being a minority partner in his family’s firm of insurance underwriters, the Djanogly Family LLP..
Justice minister failed to declare interest in industry he regulates
[ Edited: 3 Oct 2011 at 11:46 am by Paul Treloar ]The Guardian reports that Jonathan Djanogly, the justice minister, has admitted for the first time to MPs that inquiries had been launched by his own department and the Cabinet Office following an investigation by the Guardian that revealed he could personally profit from changes he was piloting in the Commons.
In front of the bill committee, which is considering controversial changes to legal aid and civil litigation costs, the minister admitted that the matter is “being looked into by both the Ministry of Justice and the Cabinet Office and they have my full co-operation.”
He added: “In the meantime, I fully stand by my published position that I have at all times made relevant declarations as an MP and as a minister.”
The Guardian reports today that the justice minister, Jonathan Djanogly, has been stripped of his responsibility to regulate firms that “ambulance chase” the public following their investigations. These revealed how he and his family could profit from changes to legal aid. Djanogly failed to declare that his teenage children were minority shareholders in his brother-in-law’s businesses, who advertise claims and are part of an industry that Djanogly regulated in government.
Claims management companies “ambulance chase” the sick, the sexually harassed and the sacked and put them in touch with no-win no-fee lawyers. The firms collect a payment known as a referral fee. In May the Legal Services Board, the independent body which advises minsters on legal regulation, said the case for banning referral fees “had not been made out”. Four months later – without any consultation or impact assessment – Djanogly announced a ban on referral fees in personal injury cases, but effectively excluded his brother-in-law’s businesses, which deal with employment law.
Sir Gus O’Donnell, the cabinet secretary, launched an inquiry into the apparent conflict of interest. O’Donnell said that Ken Clarke, the justice secretary, would now be in charge of the industry, leaving Djanogly in charge of legal aid and civil litigation. This still means he will be able to identify growth areas for claims management companies.
Justice minister stripped of powers
I must admit that I think that it’s astounding that he’s been able to remain at the helm of this Bill, given these revelations which inherently cast doubt over his independence and conduct in pushing these reforms.
As would be expected, a slightly different take from the Telegraph on this story, although even they acknowledge the concerns over conflicts of interest, following the Liam Fox resignation. Also interestingly, they appear to claim credit for the revelations in their opening sentence.
The minister was facing a formal investigation after The Daily Telegraph disclosed that his children held shares in an “ambulance chasing” legal claims firm.
Sir Gus O’Donnell said last night that Mr Djanogly had passed responsibility for the regulation of the industry to Kenneth Clarke, the Justice Secretary. He also said that Mr Djanogly’s children had sold their shares.
The Cabinet Secretary concluded that the minister was not in breach of the ministerial code and that no further investigation was necessary.
The ruling will add to growing concerns over the robustness of Whitehall rules designed to stop conflicts of interest.
Djanogly cleared in family shares row but loses claims firms role
And it keeps on coming. The Guardian now reporting that Jonathan Djanogly failed to declare a third company owned by his brother-in-law, which supplied staff to an industry he regulates. Djanogly, one of the richest MPs and heir to a £300m fortune, recorded in the ministerial register that his brother-in-law, Ben Silk, “owns Going Legal Ltd and Legal Link Introductory Services Ltd”.
But the minister did not declare that another firm run by Silk, Matrix UK, also provided staff for the claims management companies: it supplied Djanogly’s niece to work for Going Legal. Last night a spokesman for the minister said: “Jonathan Djanogly has no interest, financial or otherwise, in Matrix UK and has no knowledge of the company’s activities.” The minister is expected to return to parliament next week to push through the legal aid changes.
The ministerial code states: “Ministers must provide a full list in writing of all interests which might be thought to give rise to a conflict. The list should also cover interests of the minister’s spouse or partner and close family which might be thought to give rise to a conflict.”
Labour said the ministerial code made it clear that any financial interest should be declared. “The minister has complied with two companies but not with this holding company the Guardian has discovered.” The shadow justice minister, Andy Slaughter, said he would be writing to the cabinet secretary with a “range of questions about the minister’s possible conflict of interests and the consequences of his supervision of legislation”.
Minister failed to register brother-in-law’s firm under his jurisdiction