Administrative fees are £70m as asbestos fund pays out just 20p in the pound to victims

Administrators and lawyers claimed a staggering £70m in fees to administer a compensation scheme which left cancer victims with just 20 per cent of the money they should have received.

The deal means victims of terminal cancer in Leeds who are entitled to compensation of around £100,000 will receive only £20,000, or 20p in the pound.

Around £95m is to be paid out in compensation to cancer victims of Turner and Newall and associated companies nationwide. Among the victims who contracted cancer were hundreds whose illness was caused through the activities of asbestos factories owned by UK firm Turner and Newall, including the J W Roberts asbestos factory at Armley in Leeds. They sued Turner and Newall for compensation. Turner and Newall had other factories in Yorkshire, including in Bradford and Sheffield. The company is now owned by US giant Federal Mogul.

Administrators Kroll, who controlled the fund received around £40m, and their legal and other professional advisors who received a further £30m.

The son of one victim slammed the fees as "obscene" but the compensation deal was reluctantly accepted reluctantly by victims and by dependents of people who have died.

For decades the J W Roberts factory churned out deadly asbestos dust. It blighted the lives of workers at the factory, their families, and people who simply lived nearby. The factory closed in 1958.

Many victims contracted mesothelioma, a deadly lung cancer which usually proves fatal within three years of diagnosis.

Turner and Newall's US owners Federal Mogul went into administration in 2001 when faced with thousands of compensation claims in the United States. Turner and Newall in the UK also went into administration in 2001. Under US law Federal Mogul continued to trade profitably, despite being in administration.

In 2001 Turner and Newall faced claims in Britain totalling £340m.

A trust fund was established to salvage whatever it could for Turner and Newall victims. It won £33m, part of a total of £95m salvaged. Negotiations with the administrators, Kroll, dragged on for five years, and ended only with the vote to accept the reduced payments late last week. Over 100 former Turner and Newall employees died waiting for their cash while administrative costs mounted.

The first compensation victory was won in 1996 by June Hancock, who contracted mesothelioma after living in the shadow of the Armley factory. Mrs Hancock's son, Russell, criticised the fees charged.

He said: "The £30 and £40 million over five years seems to be at best disgraceful, and at worst obscene. I am not saying Kroll should have done it for nothing, but it appears they have done it for everything."

A spokesman for Kroll confirmed that its fees totalled £40m. The money also paid for administering payments of more than £400m to pension funds involving 40,000 Turner and Newall employees. A spokesman said: "It comes from the general assets of the company after approval by creditors."

He said of the 20p in the pound agreement: "When you realise the original proposed payout from the Americans was 7p in the pound, it is a very good deal."

A spokesman for one of the legal advisors, Denton Wilde Sapte, said the £30m spent on legal and professional services covered administration of 135 Federal Mogul subsidiaries in the UK over a period of five years, and was paid to a range of service providers of which they were just one.

Whatever the circumstances, practical accident support, compensation claim assistance and legal advice is available free of charge from our expert First Response team on freephone 0800 037 1066.

Free legal advice direct to your inbox: Ask Law Answers your compensation claim legal question.