Pike families may act over dodgy $3.41m compensation deal claims

The families of the 29 men killed in the Pike River mine explosion are considering further legal action in light of a lawyer’s letter that proposed compensation money be made available to them if charges against former mine boss Peter Whittall were dropped.

Fairfax Media revealed yesterday that Mr Whittall’s lawyer, Stuart Grieve, QC, laid out a proposal to make $3.41 million available to the Pike River families, in a letter dated October 16.

Mr Grieve said in ‘‘advance of the $3.41 million being made available, it is proposed [ with precise terms to be agreed] that . . . the ministry will not proceed with the charges laid against Mr Whittall by advising the court that no evidence will be offered in support of any of the charges.’’

Twelve health and safety charges laid against Mr Whittall were dropped in Christchurch District Court on December 12. It was also announced at that hearing there would be a $3.41m payment to the families of the men who died, and the two survivors of the November 2010 explosion.

At the time, Judge Jane Farish stressed that there had been no backroom deal. One of Mr Whittall’s lawyers, Stacey Shortall, said any suggestion that the offer from the Pike River Coal Company and its directors and officers was in return for the charges being dropped was ‘‘absolutely wrong’’.

Prime Minister John Key said the Government played no part in the decision to drop the charges. ‘‘My understanding is the judge made it quite clear the reasons she actually supported the Sometimes people fighting things out in court, if there’s not going to be a successful prosecution, makes the lawyers rich but doesn’t help anybody else. actions that were taken were because it was very unlikely a prosecution would be successful.’’

He understood, however, that while the offer of compensation was a factor it was only ‘‘quite a small factor’’ and the October 16 letter had been unsolicited. It seemed to be a pragmatic solution.

‘‘Sometimes people fighting things out in court, if there’s not going to be a successful prosecution, makes the lawyers rich but doesn’t help anybody else.’’

Pike River families spokesman Bernie Monk said he would consult lawyers about the letter, and also the families.

The main focus now was recovery of the 29 men, who still lay where they died.

Widow Anna Osborne said she would ‘‘absolutely’’ take further legal action if there was any to be taken.

‘‘Our innocent men are still lying where they were killed, and nothing has been done to rectify any of that.’’

Mrs Osborne, whose husband Milton died, said she would never have given her bank account details to the court had she known the money was coming from insurance companies.

‘‘The families were asked to give their bank account numbers to a person at the courts, thinking that the Government were close to paying the families.

‘‘I never gave my bank account number to Peter Whittall’s insurance company to pay me the blood money that I believe has been paid.’’

Labour MP Andrew Little said the letter released was a ‘‘watered down’’ version.

‘‘What hasn’t been explained is why the charges against Peter Whittall were discharged, not withdrawn, meaning he can never face any charge associated with the Pike River deaths.

‘‘My hunch is the original letter contains a lot more and sets out the real deal. We need to know what that was.’’

In a letter to Mr Little, WorkSafe NZ spokesman Brett Murray said:‘‘. . . I am aware that there have been wildly inaccurate allegations made by a number of people [and repeated as ‘fact’ by media and others] that there was some sort of ‘backroom deal’ done between the defence and the prosecution, which ‘let Mr Whittall off’ in return for these payments.

‘‘I wish to make it very clear, again, that there was no such arrangement between the defence and prosecution.’’

This month, documents released to Fairfax Media by Mr Bridges’ office showed there was ‘‘particular concern’’ at the ‘‘legalities and propriety’’ of such a payment.