Photo Credit: Shannon Lough, Photo of Lake Huron
Brief Overview:
On October 28, 2025, Justice F.L. Myers of the Ontario Superior Court released an important decision on fair and reasonable legal fees in Ontario. The decision sets a precedent on the lawyers’ contingency fees in the context of “mega-fund” settlements.[1]
In this case the Applicants represent Atikameksheng Anishnawbek and Garden River First Nation (the “Applicant Nations”).[2] The Applicant Nations asked the Court to review the legal fees claimed by the six lawyers (the “Legal Team”) that represented the Robinson Huron Treaty Litigation Fund (the “Fund”) in litigation at the Ontario Superior Court of Justice. This litigation concerned the Crown’s obligations under the Robinson Huron Treaty of 1850. The Applicant Nations are two of the 21 First Nations who are beneficiaries of the Fund.
Myers J. ultimately found that the Partial Contingency Fee Agreement with the Fund (“Fee Agreement”), was unenforceable, as it was both unfair when it was made, and unreasonable at the time of hearing. The Fee Agreement would have yielded $510 million to six counsel (approximately 5% of the $10 billion settlement). Instead, the Court awarded the Legal Team approximately $40 million for legal services, or double their billed legal fees (2x), on a quantum meruit basis.[3]
At the time of this decision, the Legal Team had already received approximately $17 million in legal fees, and $255 million from the Fund in contingent fees. The Court’s order required the Legal Team to refund the excess $232 million over and above the $23 million additional fee, to equal $40 million.[4] The order was effective immediately.
As part of his reasons, Myers J. was clear that a lawyer’s professional retainer is not “a lottery ticket”, money recovered for clients must go to the clients, save for fair and reasonable legal fees.[5] The legal principle of Champerty, or “buying a piece of a lawsuit without a legitimate interest in the case”, has been forbidden in England since the Middle Ages. Champerty remains illegal in Ontario.[6]
Myers J. acknowledged the significance of Anishinaabe law, tradition and ceremony, including the pipe ceremony. These elements helped to shape the litigation strategy, relationships, and provide context but was not determinative in the assessment of the legal fees in this case. [7] As all parties agreed that legal fees were to be decided under Ontario law alone.[8] In this case, the Solicitors Act, RSO 1990, c S 15 applied.
Context: Robinson Huron Treaty Litigation
As Myers J. explained, the Robinson Huron Treaty Litigation sought to enforce the Crown’s obligations under the Robinson Huron Treaty of 1850. The litigation led to the Supreme Court’s ruling in Ontario (Attorney General) v Restoule,[9] which included a sharp rebuke of the Crown’s conduct as a “mockery of the Crown’s treaty promise to the Anishinaabe of the upper Great Lakes.” [10]
Ultimately, Restoule led to Canada and Ontario agreeing to pay a historic $10 billion to the Fund to cover its past obligations under the Treaty (future obligations remain at issue). The Fund is a trust, representing the 21 First Nations, and their approximately 40,000 Anishinaabe members. As per Myers J., this result was a “stunning success […] that is as historic as it is transformative to the beneficiary First Nations and their members”. This was a direct result of the exceptional work done by the Legal Team, which included representing their clients “zealously, resolutely, passionately, and with extraordinary success.” [11] This work included extensive research into more than 150 years of history, including oral history retained by Elders, and sources only available in the Anishinaabemowin language(s). [12]
In 2024, the Fund signed an agreement for the Robinson Huron Treaty $10 billion settlement with Canada and Ontario.
Context: Partial Contingency Fee Agreement with the Fund
The key issue in this case relates to the Fee Agreement with the Fund. On June 17, 2011, the Fund and the Legal Team signed the Fee Agreement, which provided that the Legal Team would receive a contingent success fee calculated at 15% on the first $100 million and 5% on any amounts above $100 million recovered. The Fee Agreement also provided that the six members of the Legal Team would bill and be paid at half of their normal hourly rates, plus the partial contingent success fee agreed. The Legal Team told the 21 Chiefs, negotiating on behalf of the Fund, that the Legal Team would lose 50% of their fees if they lost.
As mentioned above, the actual settlement involved orders of magnitude above the contemplated amount, being $10 billion. Applying the formula from the Fee Agreement, the Legal Team argued that their fees were $510 million.
In spring 2024, the Legal Team prepared two reports for the Fund, summarizing their work, and opinion that they were entitled to the $510 million under Anishinaabe law (though they noted Ontario law was also applicable). As part of the second report, the Legal Team advised that under their view of applicable Anishinaabe legal principles, they had decided to offer to dedicate $255 million of their total fees to specified communal purposes, including Anishinaabemowin language promotion, Elders’ welfare, and ongoing negotiations regarding the Robinson Huron Treaty.[13]
On April 22, 2024, a meeting of the Trustees of the Fund and the Chiefs of the First Nations was held to discuss the Legal Team’s fees. During this meeting, Atikameksheng Anishnawbek Chief Nootchtai presented a resolution to defer approval and obtain independent legal advice and an assessment of the proposed fees. This resolution was later voted down during the meeting.[14]
During the April 22, 2024 meeting, one of the members of the Legal Team advised that seeking independent legal advice would delay the distribution of the settlement funds.[15] Another member of the Legal Team agreed under cross-examination that funds could have been set aside for legal fees without affecting the general distribution.[16] Lastly, at no time during the meeting did the first member advise that she was acting in a conflict of interest in advising the Fund, Trustees, and Chiefs about her and her Legal Team’s own fees.
Trustees of the Fund and the Chiefs of the First Nations voted to accept the opinions in the Legal Team’s reports and the settlement with the Legal Team. Initially 13 of the 21 Chiefs voted to accept the Legal Team’s proposal, with a further six chiefs indicating their concurrence afterwards. This resulted in 19 of 21 Chiefs supporting the settlement. Further, 15 of the 22 Trustees voted in favour of the proposal.[17] The process of voting was not made by consensus. No Elders were engaged to help build consensus at the meeting, although provisions would have allowed this under the trust indenture for Elders.
Issues
Myers J. separated his analysis into three issues, as follows:
- What is the effect of the Legal Team’s conflict of interest?
- Is the Partial Contingency Fee Agreement fair and reasonable?
- What is the value of services rendered by the Legal Team based on the doctrine of quantum meruit?
Analysis
- What is the effect of the Legal Team’s conflict of interest?
Myers J. found that the Legal Team acted in a conflict of interest when advising the Fund and Chiefs on the Legal Team’s fees. Specifically, a member of the Legal Team gave incorrect legal advice to the Fund, and created false urgency in order to pressure them to recognize their fees without obtaining independent legal advice. [18]
Myers J. did not impute bad faith on the part of any of the members of the Legal Team, but held that this case is “yet another indication of the insidious nature of conflicts of interest.”[19]
While the lack of independent legal advice alone did not make the fees sought per se unfair or unreasonable, Myers J. held that where issues arose where the Legal Team acted in conflict of interest, the burden was on the Legal Team to show that the clients were as well advised as if they had received proper independent legal advice; otherwise, the inferences go against the lawyers. [20] In this case, the Legal Team were not able to demonstrate this. In fact, Myers J. held that he was unable to tell to which degree the Chiefs and Trustees’ decisions in 2011 and 2024 “were infused with the conflicted and even wrong advice provided by their trusted Legal Team”. [21]
On this point, Myers J. explained that he did not have to simply accept either side’s characterization of the First Nations as either vulnerable parties (applicants), or sophisticated Nations (respondents). Instead, both can be true at the same time, and “[i]t is not an insult to anyone’s intelligence or sophistication to find that when entering into largely uncharted legal waters, clients and lawyers alike can benefit from expert advice on the risks and benefits of upcoming decisions or transactions.”[22]
- Is the Partial Contingency Fee Agreement fair and reasonable?
As per the leading authority concerning contingent fee assessments, Henricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496, a contingency fee may be voided if it was either unfair when made, or unreasonable at the time of hearing.
Myers J. found that the Fee Agreement was both unfair and unreasonable.
Briefly, he found that the Fee Agreement was unfair when it was made in 2011, as an outsized portion of the risks of the case were borne by the Fund, despite believing that they only bore 50%. While the Fee Agreement promised a 50% discount, because it allowed substantial delegation to the full hourly rate of lawyers without protections, the actual discount amounted to only around 25% of the full legal bill. [23] Ultimately, with legal fees and additional disbursements, the Fund was bearing over 80% of the financial load of the litigation. Importantly, the client representatives were not advised on this. [24] When the Fund pushed back on the proposed structure, a member of the Legal Team threatened to quit. Under cross-examination, that lawyer agreed that he knew that leaving the client would prejudice their interests. [25] Myers J. found that, for all of the above reasons, the Chiefs did not fully appreciate the nature of the agreement that they executed, as they were not properly informed about its risks and benefits, and believed that they bore 50% of the risk.
He then found that the Fee Agreement was also unreasonable at the time of hearing. This analysis requires considering four factors:
- Time spent by the Legal Team: Based on the 65,000 hours that the Legal Team worked on the case, $510 million would average to a billable hourly rate of > $7,800 per hour. [26] Myers J. found that this amount was disconnected from the market value of legal services, whether measured in 2007, or in the present day.[27]
- The complexity of the case: Based on the evidence collection process, Myers J. found that the case was of the utmost complexity.
- The result: Myers J. was clear that the result speaks for itself as historic. [28]
- The risk the Legal Team assumed (relatively low in relation to similar cases): The Legal Team’s risk profile was “at the lowest end” for mega-fund cases. Only about 25% of their own fees were at risk, and they carried no disbursements or adverse costs risk. Additionally, the Legal Team helped the Fund to obtain funding for the anticipated billings. In total, the Bank of Montreal lent $7.25 million to the First Nations, with their financial covenants. Many of them granted the bank security interests over their future gaming revenues as collateral.[29]
Myers J. then noted that, while the Legal Team offered to share half of the contingency fee claimed, he is concerned that the Legal Team set out defined uses, which included paying the Legal Team’s fees for the ongoing piece of the Restoule litigation, and that the Legal Team had not explained how the amount was arrived at as per Anishinaabe Law. Additionally, he held that the Legal Team’s alternative argument, that the fair and reasonable value of its legal services on a quantum meruit basis is $255 million, is “an implicit concession that the fees sought under the Partial Contingent Fee Agreement are not reasonable.”[30]
- What is the value of services rendered by the Legal Team based on the doctrine of quantum meruit?
Having voided the contingency fee agreement, Myers J. moved on to assess the legal fees on a quantum meruit basis, guided by the factors from Cohen v Kealey (1985), 10 OAC 344 (C.A.). These factors include an analysis based on the time, complexity, responsibility, monetary value, importance, skill, results, ability to pay, and the clients’ reasonable expectations. All of the factors weighed in the Legal Team’s favour.[31]
Ultimately, Myers J. awarded double the Legal Team’s billed fees in extraordinary recognition of their efforts.[32] This amounted to around $40 million, excluding disbursements.
At the time of this decision, the Fund had already paid the Legal Team approximately $17 million in fees, and $255 million in contingent fees. The Court’s order therefore required the Legal Team to refund the excess $232 million over and above the $23 million additional fee, to equal $40 million in compensation. Myers J. did not vary or award further disbursements.
Key Takeaways
Myers J.’s reasons emphasize the danger of disproportionate legal fees, and their potential to undermine the integrity of the legal profession. Even in mega-fund settlements, “[n]o lawyer can reasonably expect to take advantage of a windfall or lottery ticket.”[33] The ruling emphasizes the necessity of building fairness into fee agreements from the outset. This involves more than just focusing on the percentage but requires considering factors such as the relative risk being borne by the parties, in this case, the clients themselves and the legal team.
Myers J. is also clear that lawyers must be extremely careful to separate advocacy from advice. This is especially important when counsel’s personal interests are involved. In such situations, independent legal advice is essential, regardless of the sophistication of the parties.
Myers J.’s reasons also provide commentary on risk assumed by counsel. This risk must be genuine to justify substantial rewards. Conversely, when a legal team’s exposure is limited, it is more challenging to justify large percentage recovery.
In conclusion, Myers J. cautions lawyers, including lawyers generally acting in good faith, to ensure that their legal fees are fair, reasonable, and promote the integrity of the legal profession. Lawyers are not their clients, and “[a] lawyer’s professional retainer is not a lottery ticket offering a bonus prize of generational wealth to the lawyers if the clients hit the jackpot and win a mega-award.”[34]
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[1] Nootchtai v. Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, 2025 ONSC 6071 (CanLII), <https://canlii.ca/t/kg64z> [the “Decision”].
[2] In this case the Applicants were: Gimaa (Chief) Craig Nootchtai on his own behalf, and on behalf of Atikameksheng Anishnawbek, and Ogimaa Kwe (Chief) Karen Bell and Councillor Chester Langille on their own behalf, and on behalf of Garden River First Nation. The Respondents were: Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, David Nahwegahbow, Dianne Corbiere, Roger Jones, Mark Stevenson, Donald Worme, and Connie Addario, Mike Restoule, Peter Recollet, Duke Peltier, Angus Toulouse, Patsy Corbiere, and Wilma-Lee Johnson.
[3] Ibid at para 26.
[4] As one member of the legal team has since passed away, this included his estate.
[5] Ibid at paras 19-20.
[6] Ibid at para 16.
[7] Ibid at para 133.
[8] Ibid.
[9] Ontario (Attorney General) v. Restoule, 2024 SCC 27 (CanLII), <https://canlii.ca/t/k60vs> [Restoule].
[10] Ibid at para 2.
[11] The Decision, at paras 6-7.
[12] Ibid at para 41.
[13] Ibid at paras 104-110.
[14] Ibid at para 124.
[15] Ibid at para 115.
[16] Ibid at para 116.
[17] Ibid at para 121.
[18] Ibid at para 167.
[19] Ibid at para 173.
[20] Ibid at para 175.
[21] Ibid at para 176.
[22] Ibid at paras 74-76.
[23] Ibid at paras 65, 188.
[24] Ibid at paras 66, 186.
[25] Ibid at paras 192.
[26] Ibid at para 203.
[27] Ibid at para 203.
[28] Ibid at para 210.
[29] Ibid at para 213-216.
[30] Ibid at para 238.
[31] Ibid at para 249-251.
[32] Ibid at para 27.
[33] Ibid at para 266.
[34] Ibid at para 19.