Federal gov’t files lawsuit against Sask. law firm
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After almost a decade of fighting over alleged fake documents and millions of dollars, the Government of Canada has filed a lawsuit against Saskatchewan firm, Merchant Law Group.
The statement of claim from the Government of Canada, filed at Court of Queen’s Bench in Regina on Thursday, called it a “scheme to deceive and defraud Canada.”
In 2005, a settlement worth billions of dollars was reached between the Government of Canada and former residential school students. Part of the settlement was for the fees of the former students’ lawyers.
When asked in 2005, Tony Merchant put forward that the Merchant Law Group had unbilled time worth about $80 million relating to the residential schools case. The government’s representative had concerns about that information, so he asked for verification.
The request for verification kicked off almost nine years of back and forth cases and motions. In that time the federal government was ordered to pay $25 million in fees to the Merchant Law Group; an order they unsuccessfully appealed.
The federal government alleges the Merchant Law Group falsified expenses and time spent on the case to get more money, sometimes adding more than 24 hours in a single day.
“Once the settlement of the (residential school) litigation had become a reasonable prospect in the summer of 2005, (Merchant Law Group) began entering huge amounts of purportedly billable time into its billing database that it would later claim reflected work actually completed by lawyers on (residential school) litigation.”
The Government of Canada went on to say in the statement of claim that, “a large proportion of these time entries were intentionally inflated, duplicated or simply fabricated by (Merchant Law Group).”
The statement said the inflated times were worth tens of millions of dollars.
The federal government said it found the discrepancies once the verification process was finished in January 2014.
The Government of Canada is asking for general, punitive, and aggravated damages. It wants to get the $25 million back that it paid the Merchant Law Group plus interest, costs for this and all previous court proceedings, and a declaration that the group isn’t entitled to any payment related to the residential school litigation.
On Friday the Merchant Law Group filed a lawsuit against the federal government for $15 million saying it’s still owed in fees from the residential school litigation, damages, and costs.
In a statement about the proceedings, the Merchant Law Group’s Executive Director, Donald Outerbridge, said the federal government only filed the suit to deflect the suit it knew the firm was filing on Friday.
Outerbridge said there is animosity between the law firm and the federal Department of Justice because of the position the Merchant Law Group took against the government over residential schools.
“We had decided as a law firm in the nineties that we would not allow people who had been abused as children within the government’s Resident School system, to be re-vicitimized by government lawyers.”
Outerbridge believes the government is repackaging old arguments because it doesn’t want to pay the fees. He called the allegations against the firm “concocted,” and said they have no basis in reality.
The Department of Justice only provided two lines of comment on the matter: “A recent review shows that the Merchant Law Group has misrepresented the amount of legal fees they are owed in relation to the Indian Residential Schools Settlement Agreement. The Government is taking legal action to recover public money that was paid to this firm as a result of serious misrepresentations.”
None of these claims have been proven in court.
news@panow.com
