BC judge orders Ontario company to pay back $874000

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A B.C. judge has ordered an Ontario company to repay the federal government more than $800,000 in unnecessary and unreasonable legal fees and costs.

The fees were billed in connection with an investigation into a law firm’s participation in a settlement agreement to compensate Indian residential school survivors.

The company, Crawford Class Action Service, was appointed by the courts to monitor the class action settlement approved by nine superior courts across Canada. Crawford ended up investigating the conduct of a law firm that represented more than 1,400 claimants.

Following a two-year investigation, Crawford argued the conduct of the law firm, Bronstein and Company of Vancouver, fell below the standard expected of legal professionals, and recommended it be barred from further legal work on the case.

B.C. Supreme Court Justice Brenda Brown, appointed as an administrative judge to help oversee the settlement agreement, found Bronstein had met the minimum legal standard and declined to bar it from further work.

But in a ruling released in October last year, she ordered Bronstein to reimburse the government in the amount of $1.25 million in what she deemed to be reasonable costs associated with the investigation.

The judge also found that in the course of the investigation, Crawford, a company that assists in the administration of class action settlements, had charged the Canadian government unreasonable and unnecessary amounts. In a ruling released Monday, she ordered Crawford to repay a total of $874,700.

That figure included $180,000 in “internal” costs charged by Crawford, with the judge being concerned that the monitor had spent a disproportionate amount of time on activities that appeared to be redundant and duplicative.

The remaining $694,000 had been charged by Crawford’s “external” legal counsel. Those fees were charged by McMillan LLP, a national law firm with offices in Vancouver that worked with Crawford on the investigation.

In the October ruling, the judge focused on the legal fees charged by Howard Drabinsky, a senior legal counsel for McMillan in Ontario.

McMillan had charged a total of $1.77 million in connection with the Bronstein matter. In comparison, Bronstein retained Fasken Martineau DuMoulin, another national law firm, for $764,000.

The difference of more than $1 million in legal fees was “notable,” and the source of the difference was Drabinsky, said the judge.

The judge noted in the October ruling that Drabinsky charged between $775 and $835 an hour, billing more than 1,500 hours for a total of $1,244,000.

Drabinsky, a commercial solicitor, was not a litigator and did not have a speaking role in any of the court appearances, the October ruling said. Nor did Drabinsky, from the court’s understanding, draft any court documents, conduct the examination of Bronstein or assist in obtaining evidence for the hearings.

But despite this, Drabinsky attended the examination, interlocutory applications and substantive hearings, the judge noted, adding: “It is not clear to this court why these appearances would have been reasonably necessary.”

Crawford claimed Drabinsky was uniquely qualified and that there were no B.C. lawyers with his experience as a class action settlement administration lawyer, but the judge said that was not a skill set necessary in the Bronstein investigation.

“It was an investigation of a lawyer’s practice. Nothing in Mr. Drabinsky’s background suggests he had the necessary investigative experience to be of assistance in this regard.”

Drabinsky brought some skills to bear on the Bronstein matter, but given that his hourly rate was $200 an hour more than that of other counsel, his role should have been strictly limited, said Brown.

The judge added that she couldn’t fault Crawford for its handling of the investigation and found the investigation was worthwhile and benefited Bronstein’s clients and the public.

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