Rules tightened for residential schools settlement lawyers

Federal authorities are tightening rules to protect Indian Residential School claimants from their lawyers, a small number of whom have been keeping more than they are entitled to out of settlement funds.
The body that's overseeing the payouts for victims of residential schools says it's cracking on unscrupulous lawyers who sometimes find ways to keep too much of the settlement money for themselves. 4:55

This story may trigger painful memories for former residential school students. If that's the case for you, we encourage you to tell someone you trust about how you are feeling.  You can also find help from the toll-free 24-hour crisis line for victims: 1-866-925-4419.

Federal authorities are tightening rules to protect Indian Residential School claimants from being taken advantage of by lawyers.

The new rules will curtail lawyers from giving clients high interest cash advances, charging finders fees, or billing for improper expenses. 

"The vast majority do excellent work they’re ethical and very professional," says Dan Shapiro, chief adjudicator for the independent assessment secretariat, and the man responsible for making sure the settlement process is being handled appropriately. "There are, however, a handful of lawyers that have engaged in conduct that we feel is unconscionable and in some cases illegal."

Across the country, more than $2 billion has already been given out in compensation for victims of residential schools. The new rules aim to get rid of the bad apples in that process, to make sure unscrupulous lawyers don't skim more than they are entitled to from victims. 

Broadly, the new rules crack down on three main violations, Shapiro says:

  • It's not appropriate for lawyers to be engaged in the assignment of the settlement of funds. In a few instances, lawyers would disburse settlement funds to their clients only after having kept an unfair percentage to themselves. Shapiro says some lawyers have already been disbarred for this, and the new rules will crack down on that process even more.
  • Settlements will include, in very clear language, the fee structure rulings, so it's very clear to victims exactly how much money they can expect to receive. "If there are any deductions from that, they are invited to contact our office," Shapiro says.
  • If there's any sort of administrative fee for form-filling, the lawyer is responsible for paying those fees — not the victims themselves.

Shapiro also listed a number of red flags for clients to look out for. Specifically, he says a lawyer who is non responsive to telephone calls, and reluctant to meet in person to their client's satisfaction could be a sign that something is amiss.

"Lawyers asking them to sign agreements to be paying some of their settlement funds to third parties," is also a red flag to watch out for, he says.

The new rules have already come into effect, and anyone involved in the process is invited to contact the secretariat's hotline set up to give more information.That number is 1-877-635-2648.

Click here to listen to the the CBC's Loren McGinnis talking with Shapiro about the new lawyer rules.


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