Class counsel fees, applicable taxes, reasonable disbursements as well as honoraria totalling $25,000 to representative plaintiffs will be paid by the Crown separate from the settlement agreement that provides compensation to class members.
In Hardy v. Canada (Attorney General), 2025 FC 1142, released on June 25, Justice Paul Favel noted that class counsel fees were significant but held that they were fair and reasonable in the circumstances.
“The Class Counsel Fees in this case translate to a multiplier of less than 1% of the Settlement value. More importantly, the Class Counsel Fees are severable from the Settlement and Canada is paying those fees, not the Class,” the judge wrote.
The underlying class action was brought on the behalf of Indigenous survivors of the health facilities known as Indian hospitals.
The lawsuit alleged that these hospitals were substandard, ill-equipped, overcrowded and inadequately staffed, and that patients suffered physical, sexual and psychological abuse while at these hospitals.
In March, the federal government announced that it had reached a settlement agreement that would provide compensation for class members ranging from $10,000 to $200,000 based on a grid of abuse suffered by the survivors.
The plaintiffs brought a motion for the court to approve class counsel’s fees of $40 million plus applicable taxes and disbursements, as well as the payment of honoraria to the representative plaintiffs and certain named plaintiffs in related provincial actions.
Justice Favel cited McLean v. Canada, 2019 FC 1077 in which the Federal Court set out a non-exhaustive list of factors to be considered when determining whether the fees sought by class counsel are fair and reasonable.
In McLean, the court held that the factors to be considered include results achieved, risk undertaken, time expended, complexity of the issue, importance of the litigation to the plaintiffs, and the degree of responsibility assumed by counsel.
With respect to the results achieved, Justice Favel noted that the direct compensatory aspect of the settlement was estimated to be between $3 billion and $5.3 billion, with an additional $150 million for a healing trust fund and $235.5 million for a research and commemoration trust fund.
The judge noted that the representative plaintiffs, Ann Cecile Hardy and Cecil Hardy, had submitted affidavits indicating their satisfaction with class counsel and the amount of work that class counsel performed.
Justice Favel also noted that the action was novel, highlighting that there was no jurisprudence on the merits of a class action proceeding that advanced claims by former patients of Indian hospitals.
“Furthermore, there was no jurisprudence on the scope and extent of Canada’s liability in tort prior to its legislation by Parliament on May 14, 1953,” the judge added.
After taking into account other risks highlighted by class counsel, including uncertainty of certification due to the number of individual issues and the factual matrix that extended back 90 years, the judge held that it was fair to state that the action involved litigation risk.
The court observed that the combined value of time spent by class counsel on the action was estimated to exceed $7.5 million by the end of May 2025.
Justice Favel also noted that there were several complex issues in the action, including determining the class size, determining the number of Indian hospitals, as well as the lack of readily available documentation related to both issues.
The court highlighted that the fees sought by class counsel had to be considered in context, noting that counsel who had negotiated the settlement agreement for the action brought on behalf of survivors of Indian day schools were awarded $55 million plus an additional $7 million for future work.
Justice Favel noted that the fees in that case were within a three per cent range for class counsel fees in other mega-fund type settlements and that the fees sought in the case at bar — equivalent to one per cent of the settlement value — were reasonable in the circumstances.
Counsel for the plaintiffs were Jonathan Ptak, Adam Tanel, Ramna Safeer and Jamie Shilton of Koskie Minsky LLP, David Klein, Douglas Lennox and Nicola Hartigan of Klein Lawyers LLP, Steven Cooper and Mary Grzybowska of Cooper Regel LLP, and E.F. Anthony Merchant and Evatt Merchant of Merchant Law Group.
They were not immediately available for comment.
Counsel for Canada were Travis Henderson, Sarah-Dawn Norris, Beverly Bly and Sharath Voleti of the Department of Justice Canada.
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