A recent article in Law Times looks at a landmark settlement involving Indigenous Canadians removed from their families, which has turned to a battle over legal fees. According to author Anita Balakrishnan, Justice Edward Belobaba approved the settlement agreement in Brown v. Canada (Attorney General) 2018 ONSC 3429, without the $75-million legal fees provision, which the Ontario judge said was “excessive and unreasonable.”
At the heart of Justice Belobaba’s decision in Brown, states the article, was “how a reasonable legal fee is determined and whether approval of the overall settlement should hinge on the successful approval of legal fees.”
To gain insight into the settlement in Brown and how class action settlements are negotiated and approved, Anita Balakrishnan turns to legal experts, including Lauren Harper, an associate in Osler’s Litigation Practice Group.
Lauren tells Law Times that from a defence perspective, the case may influence how legal fees are negotiated in future “mega” settlements, where the settlement is more than $100 million. She states that specifically when a small percentage of the settlement represents a very large payment or “windfall” to counsel, courts may come to favour looking at multiples instead.
Lauren also says the ruling suggests de-linking “may be an important negotiating point for defendants because it provides them finality, and it may decrease their costs because it allows the court to bifurcate [and] approve the claims at issue, even if there is a dispute over fees.” According to the article, the judge in Brown ruled that it would be possible to de-link the implementation of the settlement from the negotiation of legal fees, and that the counsel in Brown has consented to the de-linking.