Last updated 19:42, Thursday, 10 July 2008

A SENIOR environment agency economist has admitted that a misunderstanding took place during the 2001 foot and mouth crisis, leading to Cockermouth’s Mitchells auction mart missing out on fees.

The admission by David Rabey, of the Department for the Environment, Farming and Rural Affairs, came at a tribunal hearing at which Mitchells was suing the Government for £119,000 which it says it has been owed since the 2001 foot and mouth crisis.

The judge in the case, at the High Court in Manchester, has reserved judgement until later this month.

Mitchells is thought to be the only company in the country not to have agreed an out-of-court settlement over disputed fees.

Michael Cousin, a partner at Burnetts, the firm representing Mitchells, said: “Although Mitchells remains hopeful of a favourable outcome, in this case it is even more difficult than usual to predict what the judge will decide.”

He said that there were three distinct strands to Mitchells’ case and several bases upon which the judge could arrive at his decision.

Mr Cousin added that it was possible the judge would rule the case too complicated to decide and instead agree a fair financial settlement.

The case centres on fees paid to the auction mart for valuations of inspected and condemned sheep flocks.

Defra – then called Maff – claimed it imposed a cap of £1,500 per valuer per day, when it agreed national rates with the Central Association of Agricultural Valuers (CAAV).

Mitchells, whose staff often couldn’t return to their own farms in the Cockermouth area because they were valuing infected stock, claims it was a per valuation agreement.

Mr Rabey, who was involved in the negotiation, told the court: “In hindsight, I wish we had put a statement on the website about the fees.

“There was clearly a level of misunderstanding, but I do not agree there was a systematic or wholesale failure.”

Cumbrian valuers started work without knowing how much they would get paid in many cases, unaware of the CAAV agreement.

Mitchells director Adam Day said it had been impossible to get confirmation on the rates from the department at the height of the crisis.

He said: “As a valuer, with foot and mouth raging through the country, my only thoughts were to get the job done; I did not think about the rate at the time.”

Jeremy Moody, secretary of the CAAV, said that the fees were unclear from the start and there had been inconsistency in payments.

Mitchells conducted more than 400 valuations during the crisis and was paid a total of £231,000 for the work.

Richard Morris, managing director of PFK, which used to own the Penrith Mart, said in a court statement: “Valuers were working flat out and well into the evening every day and, on the per day basis, would have reached the £1,500 cap at an early stage.

“There would have been no incentive for valuers to carry on working once the daily cap had been reached.

“There could have been a huge backlog.”

Valuations were essential before flocks were culled so the Government knew how much compensation to pay farmers.

Helena Mitchellhill, from Mitchells, said she had a telephone conversation with Defra that seemed to confirm a per valuation agreement in March 2001. She said it was several weeks before a per day cap was mentioned.

Livestock marts in Wigton and Ulverston gave evidence in support of Mitchells’ case.

Catherine Harrold, head of farm health planning and disease for Defra , said she helped set the fees to be paid to valuers who had to value flocks before they could be slaughtered. Mrs Harrold said she felt there was a tension between getting the job done and at the best price.