’60s Scoop payouts on hold as fight rages over $75 million in legal fees

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One of the applicants, Joan Frame, of Hamilton, had previously alleged to The Canadian Press that the lawyers who negotiated the settlement — some of whom worked on the case for free for the better part of a decade — “resorted to trickery” to get the agreement.

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“To allow people to win illegally and make money off our backs and suffering again should not be allowed to happen,” said Frame, who wrote the chief justice of the Federal Court after the settlement received final approval in September.

In new filings this week, lawyer Jai Singh Sheikhupura with Vancouver-based Watson Goepel writes that the applicants don’t want to delay the implementation of the settlement. Their only wish, he says, is to have the court review class-counsel fees.

On Wednesday, Canadian government lawyer Catherine Moore warned in a letter to the court that implementation of the settlement could not proceed until the legal action was over.

The $75 million in legal fees, which the federal government agreed to pay to four legal firms separately from the compensation to the Scoop survivors, became a flashpoint earlier this year when Ontario Superior Court of Justice Edward Belobaba said they were far too high.

Belobaba, who was fiercely critical of some of the law firms involved, refused to sign off on the Ontario end of the class-action settlement, prompting a scramble to separate the fee issue from the compensation deal.

Both Belobaba and Federal Court subsequently approved the settlement itself, although the appeal application has delayed his decision on whether the Ontario lawyers largely responsible for the successful deal should get their $37.5 million — half the legal fees Canada agreed to pay.

The appeal attempt could founder on the grounds that it was filed too late. Only if they overcome that hurdle will the Federal Court of Appeal decide whether to hear the case.

Some of the lawyers who negotiated the settlement are adamant in opposing any appeal as too late and an abuse of process. They are equally adamant the legal firm involved in the appeal filing should not get a penny in legal fees.

The Federal Court of Appeal should award legal costs against the applicants’ lawyer for “levying serious and false allegations,” attacking Federal Court decisions without justification, and holding the settlement as “ransom to extract legal fees,” lawyers for Toronto-based Koskie Minskie, who are waiting to take home $12.5-million in legal fees, argue.

“If this motion is granted, it would be the first time in Canada that a class member was permitted to appeal a consent settlement approval,” the Koskie Minskie lawyers say in their filings. “Given the specious grounds for the motion, this honourable court ought not use this case to set such an unwieldy and unworkable precedent.”

Two other law firms initially involved in the appeal attempt have since withdrawn from the case.

Colin Perkel, The Canadian Press