Ottawa is rejecting more than $80 million in legal fees sought by the five law firms that represented Indigenous communities in their class-action lawsuit against the federal government over its management of First Nations child protection services. The appeal led to a historic agreement this summer to pay more than $23 billion in compensation to Indigenous children removed from their families.
The government has said it is committed to a fair regulation of legal fees, but the proposed fees are too high. The $80 million sought by legal advisers would allow some lawyers to be paid more than $4,500 an hour, wrote Zeus Eden, press secretary for Indigenous Services Minister Patty Hajdu.
In our opinion this is exaggerated.
By comparison, the Indigenous Treaty requires Ottawa to pay $40,000 to any First Nations child inappropriately removed from their parents’ care and placed into the child welfare system after 1991.
For Cindy Blackstock, the Indigenous children’s defense attorney who sparked this litigation, the $80 million legal bill is unreasonable. There needs to be more discussion about the role of class action lawyers in reconciliation and perhaps more oversight, she says.
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Cindy Blackstock, executive director of the First Nations Child and Family Caring Society of Canada. (archive photo)
Photo: Radio-Canada
Because legal fees are separate from the fees for financial compensation paid to Aboriginal people under the agreement, this litigation should not block payment of compensation, which has not yet begun.
Lawyers defend themselves
For their part, the lawyers involved argue that, unlike other class actions, they agreed to a settlement cap of $80 million, which they say is much lower than the amount they could have recovered in such a lawsuit.
They also say they took certain risks because they would not have been paid in the event of a legal setback. “We were hesitant to agree to a cap on legal fees because there were significant risks and a protracted litigation seemed likely,” said attorney David Sterns, one of 93 lawyers, partners, employees or interns involved in the site’s settlement.
We did this because the Assembly of First Nations had legitimate concerns based on lessons learned from previous class actions.
Several communities signed affidavits in support of the proposed legal fees. “I was pleased that my lawyers negotiated that their fees would not be deducted from the amounts paid to the survivors,” said one of the plaintiffs, Zacheus Trout, a member of the Cross Lake First Nation in Manitoba.
A federal court hearing is scheduled for Oct. 27 in Ottawa. Anyone affected by the class action settlement can provide feedback on the proposed legal fees. Submission can be made in writing or in person.
On the face of it, the proposed fees do not appear to be overcompensation, with lawyers charging less than 1% of the total, points out Jasminka Kalajdzic, a law professor at the University of Windsor.
While it’s not unusual for the court to allow attorneys to bill at an hourly rate well above the base rate, it’s still surprising that the attorneys billed $18.5 million in a timely manner since the class action lawsuit was already under way was initiated a few years ago after the first judgment of the human rights tribunal.
The issue of attorney fees for class actions is controversial, and many people reject the idea that attorneys have to pay fees […] profiting from the losses of others.
If we want to have a class action system that works, we really need to encourage lawyers to take on these cases. At the same time, we must remain vigilant about cases of overcompensation, she concludes.
Based on a text by Olivia Stefanovich, CBC News