National – ABC National – Canadian Legal Affairs
The past few decades have seen an explosion of Indigenous jurisprudence in Canada, with decisions that set precedents like R v. Sparrow and Delgamuukw v. British Columbia, dramatically increasing activity in what was once a specialized field.
More cases means more opportunities for lawyers to have disputes with their clients over financial arrangements. In recent decades, a significant number of these disputes have also been brought to court – disputes over hourly fees, installments and contingency fees, disputes over who has the right to act for a particular First Nation .
Some professionals in the field of Indigenous law claim that these disputes are the result of a power imbalance between Indigenous communities and the lawyers they hire. They are calling for reforms to the Model Code of Conduct to protect Indigenous clients from bad actors in the legal profession.
“Indigenous communities have trust issues when it comes to legal services, which stems from a history of lawyers exploiting them,” said Raquel Fraser of Fox Fraser LLP in Calgary. “And there are many more such cases than ever reported to the bars.” Fraser also discussed the issue at the CBA-FLSC’s online ethics symposium in April.
At the Indigenous Bar Association (IBA) Annual Conference in November 2021, Fraser and IBA President Drew Lafond, Partner at MLT Aikins in Saskatoon, made a joint presentation on Model Code of Conduct reform. . First Nations governments are particularly vulnerable to exploitation by their legal representatives, Lafond said, because they are typically distracted by unmet basic needs in their communities.
“When you’re a member of chief and council, you drink water from a fire hose every day,” he said. “First Nations are embroiled in massive and extremely complex legal claims that take years, if not decades, to resolve.
“And they are trying to manage these claims while dealing with a context of poverty and colonialization that makes it more difficult to address these claims, especially when it comes to dealing with community demands for basic services.”
Lafond said the IBA is partnering with the Federation of Law Societies of Canada to review and modify the model code to protect Indigenous clients — starting with changes to how emergency agreements work.
Contingent fee agreements can jump-start cases for cash-poor clients, but unless their lawyers are transparent about the nature of the work, they can lead to unfair results.
In 2015, Tallcree First Nation in northern Alberta entered into a contingency fee agreement with Rath & Company to manage an agricultural benefits settlement with Ottawa. The agreement awarded the law firm 20% of the eventual settlement, or fees of $11.5 million. A review officer said the fees were “not patently unreasonable”.
An Alberta Court of Queen’s Bench judge overturned that decision, finding it contained “palpable and overriding errors” and pointing out that the settlement with Prime Minister Justin Trudeau’s government – which had signaled an approach most accommodating of native policy – had been concluded quickly and easily.
The model code of conduct section on contingency fees says lawyers should consider, among other things, the “complexity of the claim, the expense and risk of pursuing it” before setting a percentage. The test, he says, is whether the fee is “just and reasonable”.
This is too vague for the IBA, which is calling for a model contingency fee agreement, a maximum percentage for work on indigenous claims and a revised section of the code of conduct expressly prohibiting “exorbitant fees…which are not not supported by the amount of effort put into the case…”
Noel Semple, a law professor at the University of Windsor, says a sensible way to protect vulnerable customers is to develop time-based billing standards, a practice he says is largely unregulated in the country. Canada.
“Companies will make decisions about, for example, the division of labor between associates and associates, or when to stop a lawsuit, that affect what the client pays,” said Semple, who is running for the Ontario Liberals in Etobicoke Centre. “Unsurprisingly, some companies have made such decisions in the interest of making money, not in the interest of the customer.
“Little things can really add up. Like if a company charges a customer three minutes or ten minutes for the labor involved in writing and sending an email.”
The IBA also wants reforms “to ensure that legal fees and disbursements charged to Indigenous clients are tied to legal services rendered under a duly authorized retainer.” Fraser said there were too many disputes over who had the authority to hire a law firm on behalf of a First Nation, too many lawyers working on fees charging clients for work that they had never asked.
“The client receives an invoice for work they didn’t know was in progress. We’ve seen this happen many times,” she said.
“And there are ways to structure retainer agreements themselves to prevent a First Nation from retaining another law firm to review fees charged by another,” Lafond said. “In some cases, these agency contracts prevent the client from hiring another company until the original company has been reimbursed on the invoice they sent to the client.”
Customers who have qualms about legal fees have the option of “taxing” – asking the court to review the account. But these reviews must be launched within a specified time frame.
“And the courts haven’t shown much will to extend it,” Lafond said. “When a First Nation receives a decision from a court, there are a lot of moving parts and a lot of things that need to be done simultaneously. It may be some time before the First Nation has time to review the charges, at which time the time limit may have passed.”
This can particularly disadvantage First Nations undergoing leadership changes, Fraser said.
“Some First Nations have their own election rules, while others follow the Indian Act’s two-year timeline,” she said.
“This means frequent changes of government, new people who may not know the details of business and professional agreements entered into by the former incumbent. Under these circumstances, why shouldn’t law firms review these agreements with their customers?