Sask. Law Firm Gets Its $25m Payout for Residential School Class Action

By Barb Pacholik

August 14, 2008

REGINA - Good news for a Saskatchewan law firm that led the charge for residential-school survivors: turns out the cheque was actually in the mail.

The Regina-based firm, Merchant Law Group, has succeeded in getting Ottawa to hand over $25 million owed for legal work on First Nations residential claims.

On Tuesday, a spokeswoman with Indian and Northern Affairs Canada said the department was still reviewing a court order directing it to pay up, so it hadn't yet released the money.

Lawyer Tony Merchant, head of Merchant Law Group. A judge recently directed the federal government to pay Merchant Law Group $25 million immediately - the minimum amount the firm is owed for legal fees.

"I can tell you now with updated information that (in) the court ruling that was rendered on July 2 . . . Canada was ordered to pay to Merchant Law Group a sum of $25 million. And the Government of Canada has complied with the decision of the court," said Patricia Valladao.

"Canada will not appeal the court decision."

The money comes as part of the court-approved Indian Residential Schools Settlement Agreement, which provided compensation for former students. Individuals can receive $10,000 for the first year in school and $3,000 extra for each additional year. The agreement also provided terms of payment to law firms who represented eligible claimants.

Merchant Law, which has its main office in Regina and lawyers across the country, has said it handled claims for about 8,500 residential-school survivors going back a decade.

In a July 2 ruling, Court of Queen's Bench Justice Neil Gabrielson ordered the federal government to abide by the terms of the agreement, which directed that Merchant Law would get a minimum of $25 million and maximum of $40 million. The government contended all the money hinged on a process of verifying the legal fees, but Gabrielson said the minimum $25 million would have to be paid, pending verification of the remaining amount.

The process of verifying the fees reached an impasse when Merchant Law refused to release claims information to Ottawa, citing solicitor-client confidentiality. The lawyers have been told to iron out their differences within 90 days of the ruling, or go back to court.

While the potential $40-million payout is believed to be a record for Canadian law firms, Merchant Law head Tony Merchant has previously defended the money as fair pay for services provided.

"There was no other way First Nations people were going to receive compensation, except for the fact lawyers fought hard," he once told the Saskatoon StarPhoenix.


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