Judge asked for ruling on fees charged to residential school survivors

By Kathleen Martens
APTN Investigates
WINNIPEG – The way some Winnipeg lawyers are working with residential school survivors is under the microscope.

Officials with the federal program that compensates survivors for serious physical, sexual and other abuse laid out their case before Justice Perry Schulman on Friday.

Chief Adjudicator Dan Shapiro says at least two law firms in Winnipeg were using non-legal personnel – called form-fillers – to do what he says is lawyers’ work under the umbrella of the Independent Assessment Process (IAP).

The IAP was created out of the Indian Residential Schools Settlement Agreement, but the language didn’t address the role of form-fillers. Several law firms use them to find and contact survivors and help answer questions about the process. They are then paid directly by the firms.

But recent cases have popped up where independent form-filling companies have recruited survivors for affiliated law firms and charged fees separately. Shapiro, as his predecessor Dan Ish, doesn’t have the power to interpret the settlement agreement language and act on his own.

So he has to ask the court for direction  as to whether certain conduct is permissible. In court, other parties to the settlement agreement can weigh in.

Schulman must decide whether these form-fillers are double-dipping fees from survivors or offering a needed service. He must further direct whether lawyers can have a business interest in a form-filling firm.

Such is the case of Winnipeg lawyer Ken Carroll, who was in court Friday to hear the allegations against him and the First Nations Residential Schools Solutions Inc. Carroll said in an affidavit he owns 25 per cent of the firm, which was housed in a downtown office tower he also partly owns.

His lawyer, Steve Vincent, told Schulman Friday Carroll had gotten rid of his shares, and evicted FNRSSI.

But those moves don’t address all of Shapiro’s concerns, specifically how much Carroll and FNRSSI were charging survivors and how they were collecting the money.

The settlement agreement caps legal fees at 15 per cent of each survivor’s compensation payout. Canada, the main party to the settlement agreement, also pays “reasonable” expenses for work on each claim. These fees are clearly marked on each survivor’s invoice.

Lawyers can seek a further 15 per cent directly from the survivor in a contingency agreement. But Shapiro alleges FNRSSI has been doing this as well and those fees are charged above and beyond the lawyers’ fees. Shapiro was in court to ask Justice Shulman if it’s proper for a form-filling company to charge the survivors for their service over and above what the lawyers charge?

The lawyer for the adjudicator said together Carroll and FNRSSI had charged some of their 500 claimants as much as 40 per cent in fees. Charles Hofley said that violated the direction of the IAP, as well as the intent, which was never meant to reward lawyers any more than 30 per cent.

Shapiro also said their actions were putting the IAP in a bad light, something he expanded on outside court.

“I’m certainly concerned as chief adjudicator of a process that is claimant-centred and designed to redress historic wrongs, that people aren’t being re-victimized while these wrongs are being re-dressed,” Shapiro said of the 30 cases he has concerns about, including Carroll’s.

“We know the number of claimants involved with these firms is in excess of 1,000. How many have had relationships with form-filling agencies and how many paid money to form-filling agencies we won’t know unless we get the report we’re asking for.”

Shapiro asked Schulman to take action in a variety of ways, including re-directing claimant money paid by the government to Carroll to the court monitor to distribute to clients, rather than allowing Carroll to pay it directly. And imposing a holdback fee of 20 per cent on Carroll’s pending legal fees for IAP work already completed.

Shapiro also wants Shulman to compel eight lawyers he has concerns about to come clean about their IAP fees and relationships with form-fillers, as well as disclosing how much money was paid to form-filling firms. If lawyers refuse, Shapiro wants them suspended from doing IAP work.

However, Vincent and Blair Graham, who represents Winnipeg lawyer John Michaels in his alleged association with a different form-filling company, rejected that idea. They wondered whether Schulman, a supervisory judge of the settlement agreement, had the authority to intervene in a lawyer’s practice.

Now this has been done before as part of an IAP investigation. Justice Brenda Brown of the B.C. Supreme Court (another supervisory judge) ordered a lawyer to hand over their IAP files. That was David Blott of Calgary. Steven Bronstein of Vancouver was also accused of questionable dealings with form fillers.

Blott was eventually kicked out of participating in the IAP, while Bronstein’s work is still being reviewed. In a separate lawsuit, some 6,000 survivors that were Blott clients are suing him for financial damages.

Schulman didn’t say when he would issue his decision.


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