Allegations against law firm come out at hearing

A Calgary law firm under fire for the way it handled residential school survivor compensation cases was cleared in two earlier peer reviews, a lawyer representing the firm says.

(Photo: Lawyer David Blott taken at the time of his graduation from the University of Alberta Law School in 1998)

By Kathleen Martens
APTN National News
A Calgary law firm under fire for the way it handled residential school survivor compensation cases was cleared in two earlier peer reviews, a lawyer representing the firm says.

The Alberta Law Society twice looked into complaints against Blott & Company and found nothing wrong, Blott’s lawyer Roy Millen says. The investigations were carried out in 2009 and 2011 after one client complained he was overcharged and another said he received an advance at a high interest rate.

Similar complaints are now being investigated by a court monitor following a hearing in B.C. Supreme Court last Thursday.

Blott & Company can resume working with its 3,000 residential school clients while the investigation is conducted by Crawford Class Action Services of Ontario, the court monitor for the Residential Schools Settlement Agreement.

The settlement includes financial compensation for survivors of sexual and the worst physical abuse while students at Indian Residential Schools through what is called the Independent Assessment Process (IAP).

Justice Brenda Brown has yet to release a written order following last week’s court hearing approving the investigation.

Crawford alleges four clients were advanced loans against their six-figure compensation payouts and charged interest in the 20 per cent range, along with service fees – something Crawford says violates the IAP rule of full compensation paid only to survivors, who can settle with third parties later. Court heard Blott & Company was not the only law firm arranging settlement loans.

Crawford lawyer Lou Zivot told the judge one complainant was expecting more than $100,000 but received around $30,000 after being invoiced for two loans valued at $70,000 – more than she says she got.

Crawford further alleged some clients weren’t properly represented, which Blott denies. And, that some clients were given big-screen television sets and laptop computers, the costs of which were deducted from the compensation payout.

A publication ban remains in effect on any information that would identify the four complainants and the names of 10 associates that work at Blott & Company.

At the same court hearing, Brown lifted her 15-day suspension of Blott & Company operations that put 56 compensation hearings on hold. She’d suspended the firm’s activities prior to the Nov. 10 hearing.

Those hearings frozen from November 1 to November 18 are now being re-scheduled by the Indian Residential Schools Adjudication Secretariat. Its adjudicators hear evidence from survivors at confidential hearings and decide how much compensation is due.

Compensation payouts range from $105,000 to $455,000. About 200 lawyers work with IAP clients.

Roy Millen said IAP cases comprise 90 per cent of Blott & Company business. He also told court the firm was the subject of an investigation started by the adjudication secretariat that didn’t interview founder

David Blott. He said David Blott is willing to meet with the adjudication secretariat’s representative to address any concerns.

Chief Adjudicator Daniel Ish confirmed he ordered an internal investigation last February because of complaints from clients and his adjudicators. Those were that Blott lawyers weren’t properly preparing clients for their hearings, “major discrepancies” between IAP applications and evidence heard by the adjudicator, incomplete documents, and “excessive” cancellation of hearings.

Ish noted Blott challenged the authority of his office to conduct an investigation. Blott also denied the allegations.

Ish says it was first anticipated 12,500 survivors would seek compensation but he says the caseload is now at 27,000. Already 11,500 cases have been heard across Canada.

When the IAP concludes next year, Ish predicts somewhere between $2 billion and $3 billion will have been paid out.

As for the loans, Millen said Blott arranged them for 68 clients but hasn’t done so in the past two years. Court heard the loans were obtained through three Alberta-based lending companies: Funds Now Inc., BridgePoint Financial Services and Settlement Lenders of Canada.

David Hamm, the president of Funds Now, said in an affidavit Blott didn’t receive any direct or indirect payment for arranging loans, adding Funds Now is no longer operating.

The Residential Schools Settlement Agreement states compensation cannot be paid to other parties, including lenders.

Millen says the loans occurred during the precursor to the IAP – the earlier compensation process called the Alternative Dispute Resolution.

He said Blott & Company has handled 500 IAP cases in the past eight months without complaint.

In fact, two Blott associates said they were each attending and billing for 20 compensation hearings per month.

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