A contingency-fee agreement that will see a northern Ontario First Nation band pay its law firm almost $7 million has raised the ire of a prominent community member who believes the amount is excessive.
Lac Seul First Nation won a $27-million settlement from the federal government for a century-old dispute over timber harvesting rights, but under an agreement reached eight years ago, Kenora, Ont., firm Keshen & Major will take a 25-per-cent cut totalling $6.75 million.
At a recent public meeting to discuss the government’s offer, Garnet Angeconeb, whose father was chief of the Lac Seul nation in the 1970s, told band lawyer Will Major that he was a “rich man on the backs of poor Indians.”
But Douglas Keshen, Major’s partner at the firm, is defending the fee and notes the band was never asked to pay anything towards the case during the last eight years. His firm absorbed all fees and disbursements, including expert reports and legal opinions.
“Absolutely, the agreement was fair,” he tells Law Times. “When it went to trial last year, it was very intense and very complex and it was contested by Canada all the way. I know the band was very pleased with the result.”
But Angeconeb is vowing to continue the fight despite the band’s overwhelming ratification of the settlement on Sept. 9. With 735 members of the band’s 3,000-strong population voting, the settlement sailed through with 96-per-cent backing. More than 2,100 members, on and off reserve, were eligible to vote.
According to Angeconeb, many band members remain concerned about the size of the legal fees but were unwilling to risk the offer on the table, which the government had given them until October to accept, for the sake of the issue.
“It’s not thousands we’re talking about here; it’s millions of dollars,” he tells Law Times. “There’s many concerned that 25 per cent is too high and that the money would be better used going towards addressing some of the deep-rooted social concerns of the community.”
Angeconeb notes he has always supported the settlement, which he believes will be good for the First Nation in the long term. Nevertheless, he feels ratification doesn’t close the door to a challenge.
“I feel that 25 per cent is way out of range and it needs to be reviewed to look at what is fair for the First Nation,” he says, adding he has already looked into the band’s options.
“The band should seek independent legal counsel to take a look at the contingency fee and possibly file documents to have the Superior Court review the arrangement.”
Angeconeb will meet later this month with the chief and council to ask them to pass a resolution that would reopen the contingency-fee agreement.
In an open letter to band members, Chief Clifford Bull defended the size of the payment, noting Lac Seul had no money to pay for fees and disbursements when it launched the case in 2002 and, as a result, preferred to give itself a safety net in the event of defeat.
“The risk undertaken by our legal team to carry the file for eight years was enormous,” he wrote. “If we lost the case, then the law firm would have had no way of recovering the amounts they paid out over the last eight years.”
But Angeconeb claims an earlier case involving the Long Lake First Nation near Thunder Bay, Ont., that settled around 2002 was similar enough to show the law firm there was a very good chance the Lac Seul claim would be successful.
“There was a case won with almost identical issues,” he says. “That would tell me that my risks were minimized. They would have assessed that, and 25 per cent was the figure they came up with knowing that the chances were they were heading for a nice windfall.”
Lac Seul’s claim dates back to 1919, when it surrendered the timber on its reserve to the government so it could handle the harvesting and sale of the product.
Following a two-month trial in 2009, Federal Court Justice John O’Keefe issued a judgment in which he agreed with the band that the federal government had breached its fiduciary duty to Lac Seul in its dealings with timber contractors.
The judge found contracts weren’t re-tendered, bonuses weren’t collected, and the Crown had failed to notify the First Nation when the price of timber or the terms of the agreements changed.
“The Crown did not act in a prudent manner and in the best interests of the band,” O’Keefe wrote.
Rather than imposing a settlement, O’Keefe asked the parties to enter into negotiations that resulted in the $27-million offer in August. Lac Seul had asked for $29 million.
Angeconeb says some of the same players were involved in both the Lac Seul and Long Lake matters and that the bands used the same historical research team to build their cases.
“They weren’t completely reinventing the wheel,” he says.
But Keshen dismisses the comparison between the two cases, saying the Long Lake matter settled out of court and had no bearing on Lac Seul.
“Our case was contested and it was incredibly complex,” he says. “It was as a result of the judgment that the settlement was reached.”
Lac Seul’s elections for council take place later this month, after which officials will get to work on distributing the funds from the government. Angeconeb says many people expect individual payouts of around $1,500, as well as joint investments on the part of the whole band.
“I find a little bit of danger in that. Having watched the payouts that went out with the residential schools settlement, many people did well by that, but others did not.”
