Judge reserves decision in $888-million deal to settle veterans lawsuit

HALIFAX – A Federal Court judge has reserved his decision in a $887.8-million class-action settlement that veterans have reached with the federal government over their clawed back pension benefits.

Many veterans who spoke at the hearing said while they support the deal, they want Ottawa to foot the $66.6-million bill for a team of lawyers who handled the case.

The legal fees became a contentious issue after Defence Minister Peter MacKay called the costs excessive, which was an argument made by the Crown at the hearing before it wrapped up today.

Ward Branch, a lawyer for the veterans, said the law firm reduced its fee to 7.5 per cent of the total award, down from the original contract amount of 30 per cent.

Some veterans have said it was the federal government itself that forced the case to go on for years and become costly because it fought a chance to settle at every step.

There are 7,500 claimants in the class-action lawsuit.

Several veterans said at the hearing the deal should include damages and arrangements should be made to prevent them from having to pay higher taxes after receiving their retroactive payments under the deal.

The deal includes $424.3 million in retroactive pay to veterans and dates back to 1976.

The settlement was announced last month, years after veteran Dennis Manuge launched a class-action lawsuit against Ottawa.

The lawsuit was on behalf of himself and other disabled veterans whose long-term disability benefits were reduced by the amount of the monthly Veterans Affairs disability pensions they received.

Manuge’s legal team scored its victory last spring when the Federal Court said it was unfair of the federal government to treat pain and suffering awards as income. MacKay later said the government wouldn’t appeal and appointed a negotiator to cut a deal.