Law Times

PAGE 2 NEWS OcTOber 24, 2011 • Law Times Lawyers' fees under scrutiny Official warns of 'unethical' practices towards residential school victims BY KENNETH JACKSON For Law Times A small minority of law- yers representing survi- vors of Indian residential schools are being "unethical" by overcharging their clients and providing illegal cash payments at high interest rates before the settlements are complete, an of- fi cial has warned. Th e settlement process is a long and complex ordeal that in- cludes court-ordered protections to keep lawyers from providing premature payouts to survivors who qualify and that govern how much they can charge in fees as part of the agreement for survivors of sexual and serious physical abuse. "Th ere appear to be a very small minority of counsel that need to be reminded of what those protections are and there appears to be an even smaller minority of counsel who may not be willing to abide by them," says Jon Faulds, an Alberta law- yer representing many survivors. Faulds is also part of the na- tional administration commit- tee composed of representatives of plaintiff s counsel and lawyers for the government, the Assem- bly of First Nations, and the churches involved in the opera- tion of residential schools. He notes his fi rm, Field Law, sits on the committee as a represen- tative of the national consor- tium, a pan-Canadian group of counsel who act for residential school claimants. "Th e vast majority of lawyers who are representing claimants in the Indian residential school process are doing so properly, responsibly, professionally, and in a way that accords to the protections that are provided," says Faulds. Lawyers recently came under fi re from Daniel Ish, the inde- pendent assessment process chief adjudicator, when he warned about 200 lawyers, including several from Ontario, that "un- ethical" practices could see them forfeit all of their fees, according to a memo obtained by the Ab- original Peoples Television Net- work and published Oct. 11. "It has been brought to my at- tention that at least one fi rm has delivered cheques for compensa- tion funds, payable to the claim- ant, to a third party for 'delivery' to the claimant," Ish wrote in the June 13 memo. "Th e claim- ant is then asked to endorse the cheque to the third party for ser- vices rendered in processing the IAP claim. Th is must certainly be an unethical practice." Faulds says that by prohib- iting assignments, residential school survivors can't pledge the money they're entitled to receive in order to get some- thing now. If they can't pledge it, they'll presumably be pro- tected from lenders who charge high interest rates to people in diffi cult circumstances. "Th e purpose of that is, I think, to prevent claimants who are entitled to receive money from being taken advantage of by people who are prepared to grant them money but charge them a rate of interest that exceeds what any reasonable person would pay," says Faulds. "Really, to boil it down in a nutshell, [the idea is] that any money payable un- der the settlement process goes to the claimants' hands, no one else's. Th at is the heart of it." Residential schools began in the 19th century and con- tinued until 1996. Th e policy saw children taken from their homes and put into church-run schools funded by the govern- ment. Th e intention was to teach the children English and Christianity. As a result, about 150,000 aboriginals were re- moved from their homes and communities. However, there were many problems, including sexual and physical abuse. In 2007, the government an- nounced a $1.9-billion package to compensate survivors. Th en on June 11, 2008, Prime Min- ister Stephen Harper offi cially apologized on behalf of the fed- eral government. Under the agreement, law- NEW EDITION CONSOLIDATED ONTARIO INSURANCE STATUTES AND REGULATIONS 2011 CONSULTING EDITOR: ALAN L. RACHLIN Get convenient access to the most current insurance law – all in one practical resource. WHAT'S NEW IN THIS EDITION This edition includes updates to the latest legislation and regulations, and additional forms such as: • Statutory Accident Benefit Dispute Resolution Forms • Personal Automobile Forms • Garage Automobile Forms It also includes a Table of Concordance for insurance law across Canada. ORDER # 983545-68363 $96 Softcover 1560 pages September 2011 978-0-7798-3545-4 Annual volumes available on standing order subscription Multiple copy discounts available yers are entitled to up to 15 per cent in fees on top of the settlement paid by the federal government, says Faulds. Th e lawyer can also apply for anoth- er 15 per cent that would come from the settlement. All lawyer fees, however, are subject to review by the adju- dicators who conduct the hear- ings. Th ey have discretion to re- view the fees and reduce them if they think they're excessive. "Adjudicators use that power and discretion as a matter of routine. Virtually in every case, adjudicators will conduct a fee review in order to assure the fee is appropriate. I think they have adopted that as a matter of pol- icy to ensure some sort of con- sistency in the fees claimants are charged," says Faulds, who adds he has heard of another lawyer in British Columbia who's not fol- lowing guidelines. Th e Supreme Court of Brit- ish Columbia forbade survivors from assigning money over to a third party for upfront cash, according to a 2007 decision by its late chief justice Donald Brenner. But that didn't stop a Winnipeg lawyer from bilking 26 clients of almost $400,000. Th e lawyer, who can't be named due to Manitoba law, was dis- barred in June for over-billing his clients. Th e ruling didn't entirely ex- plain how the lawyer over-billed clients. But he did use some of that money to purchase land and apartments in Israel, according to a Winnipeg Free Press article published in May. Th e lawyer "professed to be AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. able to net $200,000 in fees over a four-month period," the ruling reads. "However, he has negligible assets in Manitoba. He has substantial assets in Is- rael which, at least in part, he acknowledges were purchased with fees generated from his residential school clients." Th e Law Society of Manitoba took control over his practice. Any notion that lawyers would try to squeeze more money out of survivors makes Gail Gallagher sick. She lost her mother to suicide, something she attributes directly to her mother's time spent in a residen- tial school. "It took my 53-year-old mother's life as she killed her- self due to, I believe, a direct result of her residential school experience and her alcohol- ism," says Gallagher, who has worked with the AFN and is now continuing her education in native studies in Alberta. "I think what those lawyers are doing is disgusting." www.lawtimesnews.com

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