Judge reserves decision in law firm’s survivor dealings

As residential school survivors represented by a Calgary law firm wait for a judge’s decision, Chief Adjudicator Daniel Ish is trying to put their minds at ease.

“They shouldn’t be panicking …there’s a number of well-meaning parties overseeing this to make sure the right thing gets done,” he said.

A five-and-a-half-day hearing concluded May 11 with BC Supreme Court Justice Brenda Brown reserving her judgement on allegations that Blott and Company took financial advantage of clients they were representing in the Independent Assessment Process and that the law firm was providing poor representation.

Concerns regarding Blott and Company’s practice came to light last November when the court appointed Crawford-Class Action Services to conduct an audit of claims by IAP clients, who applied for compensation through the Indian Residential School Settlement Agreement.  Crawford’s investigation took three months.
While Crawford was reviewing Blott’s actions, Ish was ordered by the court to monitor the IAP hearings in which Blott represented clients. Ish said he provided his adjudicators with a list of points to take note of during the hearings and then presented a monthly report to the judge. Ish would not comment on the content of his reports.

Ish said the Indian Residential School Adjudication Secretariat wasn’t aware until the court hearings began April 30 of allegations that Blott was facilitating action by third-party finance companies to provide loans at interest rates as high as 50 per cent or 60 per cent or charging high fees to IAP claimants in anticipation of settlements clients. A provision in the IRSSA prohibits the assignment of settlement agreement funds to anyone, but the claimant.

“It’s a special provision that doesn’t apply in the law generally,” said Ish. “But there must have been a fear that money would be … assigned to other people in anticipation of getting either Common Experience Payment or IAP payment and … by the time (the claimant) got their money, there wouldn’t be much left.”

The second allegation facing Blott was improper legal representation. Concerns were raised with how often firm lawyers met with clients. At 3,000 IAP clients, Blott has “the greatest inventory of cases,” said Ish, noting other law firms also have large numbers of residential school clients.  Almost half of the claimants that Blott represents have not had their IAP applications filed. September 19 is the deadline for applications to be received for compensation under the IAP.

Ish noted that Blott is not the only law firm that raised red flags of concern at the Secretariat for alleged poor representation.

“We didn’t start the process looking for poor lawyers’ practices. My assumption was that they would be good practices and there would be the odd one that the law societies would take care of it. But it’s kind of evolved now because there have been numerous worrisome and questionable practises …I’ve asked our adjudicators to be a lot more vigilant to look for this and I’d follow up if I think there is a concern,” he said.

The Law Society of Alberta has conducted an investigation of Blott and Company, and has made the decision to restrict Blott’s practice. The LSA released its conditions April 23, stating Blott could no longer have contact with IAP clients nor handle their cases. However, lawyers within the firm may continue to work with IAP claimants but may only accept new files if LSA-appointed lawyer Paul McLaughlin approves.

McLaughlin is to oversee the management of Blott and Company’s practice, as well as the transfer and closing process of IAP files.

“Mr. McLaughlin’s appointment was made to protect the interest of clients,” said Steve Raby, president of the LSA, in an email interview. “The Law Society of Alberta is very concerned for the clients and about the conduct of Mr. David Blott. Mr. Blott was not suspended but put under strict conditions of practice. As Mr. Blott is still practising the conditions are intended to protect the interests of clients.”

Crawford, the court-appointed monitor, has taken a stronger stand asking the judge to remove Blott and Company from doing IAP cases. Blott has challenged that direction.

Ish said Judge Brown could impose an intermediate remedy or could provide a ruling that limits the work Blott does with IAP claimants instead of completely cutting the law firm off from representing IAP claimants.
The Assembly of First Nations has asked Brown to consider appointing a claimant representative to help Blott’s clients choose new legal representation.

“If there are going to be files that are moved from Blott and Company to other lawyers it should be done orderly and it should be done quite quickly and the bottom line is that the claimants have the right to choose their own lawyer,” said Ish.

Brown has been asked by the federal government to put the $3 million price tag of the investigation back on Blott. Presently, the cost is being picked up by the federal government, but not through funds assigned to the IRSSA, said Ish.

Blott and Company have a large number of clients from the Blood First Nation in Alberta.

“People on our reserve were complaining that there was no action happening with (their IAP) claims,” said Rick Tailfeathers, with the chief and council’s office. “When the claims take over two or three years, you start to wonder if they’re really able to deal with this. The clock is ticking away so a lot of members were worried that their claims were not really taken care of.”

Ish said there is no urgency for Brown to render her decision as the IAP hearings are continuing but “time is of concern.” He said everyone is aware of the impending deadline for application.

“I’d be reluctant to call a delay a re-victimization. It’s unfortunate it’s happening to a group of people who were the victims of abuse.  But hopefully that can be minimized through the… careful and caring handling of these cases so that they are truly not re-victimized in any real meaning of that word,” said Ish.

UPDATE:

Judge rules: David Blott violated trust, breached settlement agreement

A Vancouver judge has kicked a Calgary lawyer out of the Independent Assessment Process (IAP) based on the allegations made by investigators.

Justice Brenda Brown released her 59-page written decision: David Blott and Tom Denomme of Honour Walk are barred from any further participation in the IAP.

The IAP is a compensation process for serious physical and/or sexual abuse suffered by former residential school students as children.
The judge accepted the findings of investigators from Crawford Class Action Services as completely credible. The Crawford report on its four-month, $3-million investigation was 7,496 pages long, consisting of an executive summary and more than 7,400 pages of exhibits.

“I have concluded that an order must go prohibiting the further involvement of Blott & Company, David Blott, Honour Walk, Thomas Denomme and certain other parties in IAP proceedings. This order will be subject to conditions to alleviate the impact on the clients of Blott & Company as much as possible,” the judge wrote.