Ottawa, lawyers reach $55M deal on First Nations child welfare legal fees

Class action lawyers have shaved $25 million off their request for $80 million in legal fees related to a multi-billion dollar settlement on First Nations child welfare.

Five legal firms have agreed to settle the issue with Ottawa if the federal government pays $50 million for fees up to Oct. 31, 2023, and up to an additional $5 million for ongoing work required to implement the settlement.

Ottawa also would be required to pay disbursements and applicable taxes to lawyers.

"We believe that this fee, which is $25 million lower than the request fee, is reasonable," said Jennifer Cooper, a spokesperson for Indigenous Services Canada.

"It is also in line with the fees paid for previous class actions, even though this class action is the biggest in our history and required significant work."

But Cindy Blackstock, who filed the 2007 human rights complaint with the Assembly of First Nations that launched the case, said the legal bill is still too high.

The settlement came after a 2016 ruling from the Canadian Human Rights Tribunal that found Canada engaged in wilful and reckless discrimination against First Nations children and families by failing to provide them with the same level of family services provided elsewhere.

It also came on the heels of the tribunal's 2019 ruling, which ordered Canada to pay the maximum human rights penalty of $40,000 per First Nations child and family member.

"I still think this is an imbalance between what victims receive and what the class action counsel receives, particularly when most of the work was done by the tribunal," said Blackstock, who is the executive director of the First Nations Child and Family Caring Society.

The Federal Court still needs to approve the $55 million legal bill, which would be paid out of public funds.

The government argued before the Federal Court last month that the initial $80 million request was unreasonable and suggested it should pay roughly half that amount. 

The fees will go to five firms: Sotos LLP, Kugler Kandestin LLP, Miller Titerle + Co., Nahwegahbow Corbiere and Fasken Martineau Dumoulin.

None of the legal fees will be paid out of the $23 billion-plus in federal cash set aside for compensation, or the additional $20 billion earmarked by Ottawa for long-term reform of First Nations child and family services.

Under the compensation settlement, more than 300,000 First Nations people will receive tens of thousands of dollars because Ottawa underfunded child and family services on-reserve.

The Canadian Human Rights Tribunal said the government's actions created an incentive for foster care systems to remove First Nations children from their homes, communities and families.

Dubbed the "millennium scoop," the practice meant more Indigenous children ended up in foster care than were sent to residential schools at their peak.