Former Calgary lawyer one of hundreds in Canada accused of misappropriating funds, CBC reveals
David Blott defends his work and says his fees were fair
Former Calgary lawyer David Blott is one of more than 200 Canadian lawyers investigated by their law societies between 2010 and 2015 for questionable practices involving clients and their money, a CBC News investigation has found.
But most of those lawyers, including Blott, were never charged with any crimes — although charges for criminal activity would have a much higher burden of proof than disciplinary action by a law society.
- Lawyers across Canada misappropriated millions from clients' funds but few faced criminal charges
- Lawyer resigns over accusations he treated residential school clients 'like cattle'
Blott is named in a multi-million dollar class action lawsuit by thousands of residential school survivors who allege he abused their trust, put his own financial interests ahead of theirs, charged excessive fees, and helped issue illegal loans to claimants ahead of their settlements.
The suit was filed in Calgary in 2013.
Since then, many survivors including Ernie Black Rabbit have died, waiting for some type of resolution.
"My father never got an apology from the priest or the nun, and he never got it from the lawyer he thought was going to help him," said Janice Shingoose, daughter of Black Rabbit, of the Blood Reserve. He passed away in 2014.
Black Rabbit attended residential school for 10 years, but never received any compensation. He was disappointed, and blamed Blott's mishandling of his file.
Clients treated 'like cattle'
Blott was representing at least 4,600 people who were applying for compensation for the residential school settlement program in Alberta, British Columbia, Saskatchewan, Manitoba and the Northwest Territories.
He resigned in 2014 while the Law Society of Alberta was investigating his conduct.
At the time of accepting Blott's resignation, the law society said "victims of the residential school system were, effectively, re-victimized and treated less like human beings and more like cattle."
Shingoose, 52, says her father died before he was able to make peace with what had happened, or regain his trust in the legal system.
"It just seems like there's two different avenues here. There's the abuse as a child in residential school, and then there's also abuse of an elder in the legal system. And I want closure in both of those journeys that my father walked on."
Shingoose has taken on her father's fight in the class-action lawsuit involving more than 3,000 people. They claim Blott failed to advocate for them and charged excessive fees.
Their lawyer says it's been a tough road for his clients.
"There can be no doubt that this is a real stain on our profession," said Max Faille.
"That people who are amongst the most vulnerable in our society, and who were the victims of one of the worst episodes in our history as a country, should be re-victimized by the person that they trusted to assist them in seeking some measure of compensation."
Self-serving loans?
In the statement of claim, the lawsuit alleges Blott and certain lenders encouraged, facilitated, arranged, and profited from loans to survivor claimants.
The lawsuit states these types of loans were expressly forbidden pursuant to the terms of the Settlement Agreement.
In its 2014 decision, the law society said "there appears to be reasonable grounds to believe that Mr. Blott may have been a party to collection of interest at rates contrary to the Criminal Code of Canada — as such, in that regard, a referral shall be made to the Attorney General for such further attention as they deem appropriate."
The Alberta Crown Prosecution Service (ACPS) reviewed the case and referred it to the RCMP for investigation.
To date, no charges have been laid in Alberta.
In his statement of defence, Blott says he did not encourage or benefit from any loans, and he merely acted under his clients' instructions.
He also stands by his work and says his fees were fair.
Blott did not respond to the CBC's requests for an interview.
A note on methodology for the CBC's countrywide investigation into more than 200 Canadian lawyers who were disciplined by their law societies and misappropriated about $160 million of their clients' funds: CBC News compiled information about discipline cases and prosecutions between Jan. 1, 2010, and Dec. 31, 2015, by collecting material from provincial law societies, legal and court databases and media reports. We included all instances in which lawyers were sanctioned by their law societies for improperly taking or mishandling money from client trust funds or overcharging clients to an extent that led to professional misconduct. This includes deliberately overcharging, charging for services never provided, outright fraud and breaching law society rules respecting client funds. Because there is no single comprehensive source for this information, it is possible not all relevant cases of discipline and criminal prosecution were captured. In about 30 discipline cases, it was not possible to provide an estimate of the amount of money clients may have lost.