US Law Firm Bills Ottawa $10.9M for Softwood Help

US Law Firm Bills Ottawa $10.9M for Softwood Help
Posted by CN Staff on May 21, 2002 at 11:17:46 PT
By Cristin Schmitz, Southam News
Source: National Post
The federal government paid $10.9-million to a U.S. law firm mostly to act on its behalf last year in the battle over softwood lumber, making it the highest fee the Canadian government has ever paid to a law firm in one year.Weil Gotshal & Manges, the blue-chip Washington, D.C., firm that has represented Canada in several international trade disputes, including the ongoing tangle with Brazil over aircraft subsidies, billed for more than double the previous record of $5-million.
The massive payment was the largest single chunk of the Canadian government's legal tab last year, which hit a record $63-million.The cost of legal work by private law firms for the federal government, in litigation both for and against the Crown, shot up 15% in 2001-2002, internal Department of Justice records show.Most of the increase was in legal work on international trade disputes for the Department of Foreign Affairs and International Trade. That ministry will pay out $13.7-million for legal representation in the fiscal year ending March 31, 2002 -- more than triple the $4-million it spent in the previous year, according to projections. The totals are not yet known because bills will continue to arrive for several months.The Crown's legal bill has increased 15% per year, on average, over the past three record-breaking years, The Lawyers Weekly reports in its annual survey of Crown agents this week.As always, drug prosecutions are the single most costly item on the Crown agent tab. Last year, the government spent an estimated $24-million -- up nearly 20% from $20.1-million the year before. About two-thirds of the prosecution expenses were incurred on the West Coast, where world-famous "B.C. bud" marijuana is grown and distributed.In British Columbia, the RCMP has been laying more drug charges outside urban areas, in northern and smaller communities, said Marius Nault, acting executive director of the agent affairs unit of the federal prosecution service. The drug cases are also more complex, with greater emphasis on large-scale marijuana grow operations and trafficking rather than drug possession charges, he said.A total of 810 lawyers and 239 law firms, most with Liberal pedigrees, act as standing Crown agents on the government's drug, tax, fisheries and other criminal prosecutions.An undisclosed number of ad hoc legal agents across Canada also handle civil cases.It was U.S. attorneys, however, who were the top billing firms to the federal government in 2001-2002.U.S. law firms represented Canada in the latest legal battle (dubbed "Lumber 4") in the long-running, astronomically expensive softwood lumber trade war. Half-a-dozen U.S. law firms also represented Canada in its costly and speculative $1-billion civil action against U.S. big tobacco for alleged cross-border cigarette smuggling.Weil Gotshal & Manges co-ordinates legal challenges under NAFTA and the World Trade Organization to the combined U.S. tariff of 27.34% imposed on Canadian softwood lumber, which is expected to cost Canada hundreds of jobs and some $2-billion a year.Last year, 15 attorneys and legal assistants worked on the investigative phase of the case, said senior partner Jean Anderson, who predicted costs will drop slightly this year.The No. 2 Crown agent was the Calgary firm of Macleod Dixon, which billed $3,159,065 for a team of 10 lawyers and four paralegals. They are defending the government in a historic Federal Court action brought by the Samson, Ermineskin, Montana and Louis Bull Indian bands, which started May 1, 2000, and could continue for several more years.The bands are suing the Crown for damages and $1-billion for the government's alleged mishandling of billions of dollars in revenue from the oil reserves of Pigeon Lake, south of Edmonton, the fourth largest oil field in Canada. Some of the alleged misdeeds go back to an 1886 treaty. The case, which could eventually redefine the relationship between First Nations and the Crown, involves sifting through more than 250,000 documents.Last year, the federal government spent $4.7-million defending itself against land claims by aboriginal people and suits alleging physical and sexual abuse of aboriginal children in government-sponsored residential schools.The Department of Justice projects that in 2001-2002 the government will have spent $29-million prosecuting criminal cases (up from $25-million the year before) and $22.4-million on civil litigation (down from $24.8-million in the previous year).The department with the highest tab, at $26.8-million, was the Department of Justice, which oversees drug prosecutions and the tobacco smuggling suit. Other big spenders included Human Resources and Development Canada, at $4.8-million; the Canada Customs and Revenue Agency, at $3-million; and the Department of Fisheries and Oceans, at $1.8-million.By region, spending on Crown agents for 2001-2002 was: $16.9- million in the United States and other foreign countries; $16.8- million in B.C.; $11.5-million in Ontario; $8.5-million in the Prairies; $6.2-million in Atlantic Canada; $2.9-million in Quebec; and $200,000 in the North.The government also spends millions of dollars for the hundreds of staff lawyers it employs.Note: Record year for billings: Drug prosecutions and trade spats dominate legal ledger. Newshawk: RainbowSource: National Post (Canada)Author: Cristin Schmitz, Southam NewsPublished: May 21, 2002 Copyright: 2002 Southam Inc.Contact: letters nationalpost.comWebsite: Links Articles - Canada
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