Merchant Law Group in legal battle of its own

REGINA – A well-known local law firm that handled more than half of all trials and appeals concerning Indian residential schools is in a legal battle of its own with the Canadian Government.

Merchant Law Group is being sued by the federal government for what it calls fraud, misrepresentation and deceit.

Between 1997 and 2005, Tony Merchant and his firm dealt with more than 7,000 claims from former students at Indian residential schools.

When it came time to settle, eligible applicants were paid $10,000 for their first year in school, plus $3,000 each year, thereafter.

The lawyers, meanwhile, were paid millions.

In 2008, Merchant Law was given $25 million for its work with claimants.

Now, the government is suing the law firm to recoup that money, as well as legal fees spanning a number of years.

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The claim alleges Merchant’s electronic billing statements were incorrect. Records showed some lawyers were billing out more than 24 hours in a day. Other records were backdated, some by as much as two years.

In part, it reads: “A large proportion of these time entries were intentionally inflated, duplicated or simply fabricated.”

The federal government is backed by multiple reports by Deloitte, which looked into Merchant’s records when the government questioned the firm’s billed hours.

The claim went on to say, “Canada has refused to pay MLG any further amounts and advised MLG that it was Canada’s view that MLG had committed tortuous conduct in advancing its claim for fees and disbursements.”

In a statement emailed to Global News, Donald Outerbridge, Merchant’s Executive Director, says, “Our law firm denies that any of the government’s concocted allegations have merit or any basis in reality.”

In fact, the group has filed a counter claim, for $20 million.

The claim alleges the government never followed through on the initial agreement in principal signed back in 2005, saying it would pay Merchant $40 million in recognition of the “very substantive work” the lawyers had done on behalf of residential school survivors.

None of these accusations have been proven in court.


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