JFK Law LLP is proud to share that our Managing Partner, Sara Mainville, is featured in an interview with Canada’s National Observer. In the article, Mainville sheds light on exploitative practices used in legal fee arrangements with First Nations.
A recent court decision by the King’s Bench of Saskatchewan found that legal fees charged to Beardy’s & Okemasis Cree Nation by its former law firm were unfair and, in some cases, unenforceable. The court ordered the law firm to pay back over $826,000 and an additional $100,000 in costs. After Beardy’s & Okemasis Cree Nation ended their contract with the law firm, the law firm demanded more than $1.1 million in fees plus a share of future contingency payments – even though it had been paid by loans and insurance already – due to a ‘poison pill’ clause in the retainer agreement in the event that the First Nation terminated the agreement.
Exploitative Legal Fee Practices
The article highlights a troubling trend where contingency fee arrangements, initially designed to enhance access to justice, have devolved into mechanisms for predatory practices. These arrangements often result in windfall profits for lawyers at the expense of First Nations clients.
Mainville explains that this issue is common in Saskatchewan where there is a surge in large, complex First Nation litigation and settlement activity, so law firms are attracted to the work because of the large payouts. Mainville points out that some firms exploit the principle of “sharing” in Indigenous cultures to justify exorbitant fees, framing them as a form of sharing in the community’s success.
The use of poison pill clauses in retainer agreements is especially problematic. Mainville recognizes that it goes against best practice to use a poison pill clause, as no client should be penalized for seeking another lawyer.
As First Nations continue to receive settlement or litigation funds rightly owed to them, it is important that law firms act ethically. Mainville emphasizes that contingency fees are used when there is no other option, as it undermines reconciliation to take an unfair cut of the damages given to a Nations’ generation of citizens. JFK Law remains committed to modelling best legal practices in the interest of our clients and we commend Mainville for speaking out against exploitative legal practices.