Ottawa contends that lawyers are not entitled to an $80 million payout for the First Nation child welfare settlement.

The legal expenses will be in addition to the $23 billion earmarked for compensation and the $20 billion allocated for long-term reform.

Ottawa is seeking to provide class action lawyers with roughly half the amount they’ve requested in legal fees for a multi-billion dollar First Nations child welfare compensation case — the largest settlement agreement in Canadian history.

The federal government argued in the Federal Court this past week that it should compensate the class action lawyers with an amount ranging between $40 million and $50 million, as opposed to the $80 million they’ve requested.

Federal Court Justice Mandy Aylen, who reserved her decision on Thursday, emphasized the need for the court to consider the size of the settlement agreement and the fact that the case had evolved over more than a decade of litigation at the Canadian Human Rights Tribunal (CHRT).

“One is that this settlement of this type has been characterized as what we call a mega settlement … Second, and importantly, this settlement piggybacks on the tribunal proceeding.”

However, class action lawyers assert their request for $80 million is justified due to the unprecedented nature of the deal they helped negotiate. They undertook this case with the understanding that their compensation would be contingent on their success.

Ottawa has agreed to cover the legal fees for the five law firms that initiated the class action lawsuits leading to the approval of the $23 billion-plus settlement agreement by the Federal Court last Tuesday.

This compensation will benefit over 300,000 First Nations children and families who suffered from discrimination resulting from the government’s underfunding of on-reserve child welfare systems and other family services.

The Canadian Human Rights Tribunal (CHRT) determined that the government’s actions created an incentive for foster care systems to remove children from their homes, a practice known as the “millennium scoop,” which led to more Indigenous children ending up in foster care than during the peak of the residential school system.

The legal expenses will not be covered by the $23 billion allocated for federal compensation or the $20 billion designated by Ottawa for the long-term reform of First Nations child and family services. The class action lawyers will receive their compensation from separate public funds.

These fees will be distributed among five firms: Sotos LLP, Kugler Kandestin LLP, Miller Titerle + Co., Nahwegahbow, Corbiere, and Fasken Martineau Dumoulin.

The government has expressed concern about certain lawyers billing at the highest tier of their hourly rate scales. According to the government’s argument, if the $80 million legal bill is sanctioned, it would mean some lawyers receiving compensation at a rate of $4,580 per hour.

Ottawa maintains that a legal bill in the range of $40 million to $50 million is more in line with the fees associated with other recent substantial settlement cases, as indicated in court filings.