Federal Court confirms legal fees in ’60s Scoop class-action lawsuit

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The judge said lawyers in the federal suit are free to reassess their fees and decide whether part of the money should instead go to the settlement, but are legally entitled to the sum approved by Federal Court Judge Michel Shore, who was handling the matter.

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Phelan had requested input into whether he could review the fees after Justice Edward Belobaba, in a separate but parallel proceeding in Ontario Superior Court, found the $75 million Canada had agreed to pay in legal costs was excessive.

Belobaba also took issue with part of the deal that split the fees evenly between lawyers who acted in Federal Court and those who did in Superior Court.

The lawyers who had spent years fighting the landmark case in Superior Court agreed to allow Belobaba to deal with the fee issue separately, so that he could approve the Scoop settlement under which survivors are to be paid up to $50,000 each.

The lawyers in the Federal Court action, however, maintained that Shore had signed off on the settlement on May 11, including the fee arrangement. But they returned to Federal Court for one more approval in light of the decision on the Ontario end.

Phelan, who took over the case from Shore, signed an order last month confirming the lawyers in Federal Court would get their $37.5 million. But he sent a note to the federal parties the next day saying his approval applied to the agreement except for the fees and later questioned if he could even rule on the issue.

In the end, the judge found that Belobaba’s ruling did not raise a circumstance that would permit the reopening of a federal judgment, saying each court’s decisions stand on their own.

It would also be inappropriate for the Federal Court to comment on the merits of the Superior Court ruling, given that counsel fees remain a “live issue” before the Superior Court, Phelan said.

“It is not surprising that different court records yield different court decisions,” Phelan wrote. “Both are valid and subsisting decisions.”

Paola Loriggio , The Canadian Press