By Kathleen Martens
APTN National News
November 22, 2011
http://aptn.ca/pages/news/2011/11/22/residential-school-students-say-law-firm-offered-loans-at-30-per-cent-interest/
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Former students of residential schools allege a Calgary law firm handling their compensation cases offered them loans at around 30 per cent interest and the option of buying electronic equipment like televisions, sound systems and computers, APTN National News has learned.
The loans, plus interest, along with the cost of the electronics equipment would then be taken off the survivor’s final compensation pay out, leaving some with a fraction of what they were entitled to receive.
Blott and Company allegedly paid the lending companies that made the loans out of the settlement funds, something that was expressly prohibited in a 2007 court decision by then British Columbia Chief Justice, the late Donald Brenner.
The B.C. Supreme Court recently ordered an investigation into Blott and Company’s 3,000 compensation cases.
It is against the rules set up by the courts as part of Canada’s Indian residential school settlement to take money from a residential school compensation claimant before they receive their final settlement pay out.
The government of Canada already pays lawyers handling compensation cases 15 per cent of their client’s final payouts. Lawyers are also entitled to negotiate up to an additional 15 per cent fee from their clients after the final payout.
The court also imposed a publication ban on some of the details about the case.
APTN, which has been investigating the law firm’s activities for several months, previously interviewed some of the law firm’s clients who detailed their dealings with Blott and Company.
Residential school survivor Doris Bird was a client of Blott and Company. She says her lawyer told her to expect a big payout as compensation for serious sexual abuse.
But she only received $30,000 from a $125,000 payout. She said Blott and Company took money off for legal fees, a big-screen TV, three loans, and interest on the loans. She said she was also forced to sign a non-disclosure agreement with the firm.
“When I got this cheque that day they told me that I can’t say anything about it, that I can’t tell anybody. That I can’t ever talk about it to anybody. I had to sign that paper,” said Bird.
The compensation policy is very specific when it comes to fees, saying only agreed-upon legal costs can be deducted.
All compensation paid by Canada must be paid directly to the clients and can’t be assigned to third parties like loan companies.
Another residential school survivor Marie Good Rider said her lawyer arranged three small loans at about 30 per cent interest while she waited for her compensation cheque.
Good Rider said her lawyer told her to pick up money orders at a cash store while she waited for what he predicted would be a $100,000 payment for sexual abuse and a permanent head injury.
But she only received $3,500 and an explanation. Good Rider said her lawyer blamed the federal government for the low payout.
“(He said) ‘I’m sorry to say we had a bad adjudicator.’ So he turned around and he covered himself up; he blamed the government,” said Good Rider.
Contact: kmartens@aptn.ca
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