In their factum, the lawyers warn the ruling could have a “chilling effect on counsel’s willingness to enter into such arrangements for complex, high-risk, high-value cases,” particularly in areas such as Aboriginal and treaty rights litigation.
They argue the application judge erred by equating a high contingency fee with champerty and by relying on hindsight in assessing the agreement’s fairness.
In 2023, Canada and Ontario announced a proposed $10-billion settlement to resolve claims that annuities promised under the 1850 Robinson Huron Treaty had not been increased as required.
The annuity was raised only once, from about $1.70 per person to $4 in 1875, and remained unchanged for nearly 150 years despite significant resource revenues from the treaty territory.
The legal team that negotiated the settlement had a partial contingency fee agreement with the First Nations that would have entitled it to about $510 million. The team ultimately sought $255 million, with the remaining $255 million to be returned to the First Nations.
Trustees representing 19 of the 21 First Nations approved the fee. However, two First Nations dissented and brought an application to have the partial contingency fee agreement set aside.
In Atikameksheng Anishnawbek First Nation v. Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, 2025 ONSC 6071, the Ontario Superior Court found that the fee sought would amount to a windfall that bore “no relationship at all to the chargeable value of legal services in Ontario.”
The court also noted that the legal team had already received approximately $17.5 million in fees over the course of the retainer and that the requested $255-million fee would equate to an average hourly rate of about $3,900 for the 65,000 hours docketed by the legal team.
The judge awarded the legal team a total of $40 million in fees on a quantum meruit basis, roughly double their billings, and ordered that the balance be returned.
The legal team argues on appeal that the application judge made several errors in setting aside the agreement and reducing the fee.
They submit that even with a partial contingency fee arrangement, the legal team assumed substantial financial risk, as well as legal, organizational and reputational risks that went well beyond those assumed in a typical case.
“[T]he Legal Team was required to challenge a 125-year-old Privy Council precedent, navigate unsettled doctrines regarding treaty interpretation, laches, limitations, and the honour of the Crown, and develop novel legal frameworks in an evolving area of law,” the factum states.
They also highlight the organizational risks associated with coordinating and maintaining cohesion among 21 autonomous First Nations, each with divergent interests and internal disputes regarding compensation and territorial boundaries.
The legal team argues that the application judge failed to consider any of these non-monetary risks.
They further submit that while time spent by lawyers is a relevant consideration in assessing legal fees, it is not appropriate to reverse engineer a notional hourly rate and then find a contingency fee agreement to be unreasonable because that figure exceeds what the court considers to be conventional hourly rates.
“Were the reasonableness of contingency fee agreements to be judged solely by reference to a notional hourly rate, it would be difficult to conceive of any contingency fee arrangement that could withstand scrutiny,” the factum states.
They also argue that the application judge failed to holistically weigh the quantum meruit factors, noting that he provided no explanation for how his findings translated into a reduction from $255 million to $40 million.
The legal team is seeking an order affirming the $255-million fee as agreed by the legal team and the Robinson Huron Treaty Litigation Fund or, in the alternative, that an amount be fixed as payable to the legal team pursuant to a quantum meruit analysis.
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