The Newfoundland and Labrador government admitted Monday that Danny Williams was premier when his former law firm was hired to work on a lawsuit aimed at recovering millions of dollars from tobacco manufacturers.

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Justice Minister Felix Collins said a U.S. law firm picked a St. John's firm that had been founded by former premier Danny Williams. ((CBC))

Roebothan McKay Marshall — a firm Williams helped found, but which he left after he entered politics a decade ago — is at the centre of a political controversy, with the Liberals accusing the governing Progressive Conservatives of awarding a rich contract without tender.

"There is no paper trace anywhere inside of the government that allowed for this contract to be awarded or done appropriately," Liberal Leader Yvonne Jones told the house of assembly.

"I ask you today to stand in your place; you are spending taxpayers' money: Why did you solicit this company untendered, who has connections to the former premier and is known as a former PC-connected firm in this province?"

But Justice Minister Felix Collins said even though Williams was still in office when the contract was let, the government had nothing wrong.

He said Humphrey Farrington McClain, the Missouri-based firm law firm hired to take on the cost-recovery case, subcontracted the work on its own.

Humphrey Farrington McClain was hired a decade ago, when the Liberals were still in power, and current Liberal justice critic Kelvin Parsons was the justice minister.

The decision to hire Roebothan McKay Marshall, which specializes in litigation and has a large personal injury practice, was made when Williams was premier, but by the U.S. firm itself, Collins said.

"Whatever law firm [it picked], that would be our obligation to enter into contract with their firm, that they had retained," Collins said.

Suit aimed at big tobacco

Collins said Humphrey Farrington McClain would receive 30 per cent of any settlement reached in the case, which is aimed at recovering some of the money spent through the health care system on tobacco-related disease.

Collins said once Humphrey Farrington McClain obtains a certificate of practice allowing its lawyers to work in Newfoundland and Labrador, it could take over as lead counsel in local courts.

Jones said government should nonetheless have called for proposals to find a law firm to take on the case.

"How much is this firm being paid, what are the terms of the contract? These are the things we don't know," she said.

Collins says there is no contract or payment arrangement between the government and Roebothan McKay Marshall.