Lawyers for more than 2,000 people who say they were physically or sexually assaulted as children at Indian residential schools have seen their fees reduced by adjudicators who determined that they overcharged their clients, the federal government or both, the government has revealed.
Over the past decade, more than 50 lawyers saw their fees reduced by an adjudicator of the Independent Assessment Process (IAP) on 10 or more occasions. One lawyer had to pay back more than $2-million.
Lawyers across Canada have been supplementing their caseloads since 2007 by representing claimants at hearings of the IAP, the "non-adversarial" process established under the Indian Residential Schools Settlement Agreement for settling the claims of former students who say they were abused at the institutions. For some lawyers, IAP claims have become a full-time business.
Officials with the IAP, which is expected to hold its final hearing this year and has paid out $3.1-billion in awards to date, point out that residential school claims involve complex legal concepts and processes. For that reason, the parties to the settlement agreement urge claimants to hire a lawyer.
Under the terms of the settlement, the federal government pays those lawyers an amount equal to 15 per cent of the award received by their clients, but they are permitted to charge their clients as much as an additional 15 per cent of the award.
With an average claim being settled for $93,500, and given that almost 90 per cent of IAP claims are successful, some lawyers have been making large amounts of money for what one lawyer says generally amounts to two days of work for a standard claim, three for something more complex, but just a single day for simple cases.
But claimants can ask the IAP adjudicator to determine whether the fees are fair and reasonable, and adjudicators can initiate the reviews themselves if they suspect the lawyers are overbilling. When it is determined that the fees are too high, they can be reduced. Even the government's portion can be cut to less than 15 per cent, if an adjudicator decides the amount is unwarranted.
In response to questions put to the government late last year by NDP MP Charlie Angus, who was his party's critic for indigenous affairs, Indigenous and Northern Affairs Canada said "there were some 24,380 legal-fee rulings completed by Dec. 12, 2016, [and] some 2,540 legal-fee reviews that resulted in fees being reduced. There were 56 lawyers that had their fees reduced on 10 or more occasions."
In other words, the adjudicators reduced the fees in more than 10 per cent of the claims.
Michael Tansey, a spokesman for the Indian Residential Schools Adjudication Secretariat, which administers the IAP, later told The Globe and Mail that "one lawyer had their fees reviewed 257 times and had to pay back $2,019,836.85. This lawyer is no longer practising in the IAP."
In 2014, Calgary lawyer David Blott was accused of misconduct in his handling of the cases of residential-school survivors and was disbarred by the Law Society of Alberta. His firm handled almost 4,600 cases between 2006 and 2012, and some claimants met their lawyers only minutes before they went before an adjudicator.
Adjudicators have no authority to sanction lawyers for excessive fees. That authority rests with the law societies.
But any lawyer who is routinely found to have charged excessive legal fees will be subject to extra scrutiny, Mr. Tansey said. To his knowledge, the only instance in which a lawyer did not reimburse fees to clients after being told to do so resulted in the Manitoba lawyer's disbarment.
Doug Racine, who heads the Aboriginal Law Group in Saskatoon, was an IAP adjudicator for a couple of years before he started working as a lawyer for IAP claimants. He estimates his firm has handled as many as 1,000 IAP cases.
Mr. Racine said there are cases where additional fees are justified, but they are rare and his firm has never asked clients to pay them.
"The payments paid to lawyers by the government of Canada are fair and reasonable. Taking any more than the 15 per cent perpetrates an abuse on the claimant because these claims are not difficult to take forward and because, once your law firm sets up the office so you can deal with these claims, you can streamline everything and they become a lot easier to run," he said.
"Most of these claimants are living at the poverty line or below the poverty line. They are looking after young children. If they are grandparents, often they are looking after grandchildren," he said. "And that extra $15,000 or $20,000 can go to looking after their family."