Judge F. L. Myers calls mega-fund percentage “unreasonable,” orders $232M refunded to litigation trust

THUNDER BAY – INDIGENOUS NEWS — In a precedent-setting ruling with major financial and governance implications for 21 Robinson Huron Treaty First Nations, the Ontario Superior Court has struck down a $510-million success fee sought by the lawyers who represented the Robinson Huron Treaty Litigation Fund (RHTLF), replacing it with an award pegged at roughly $40 million for the value of services rendered.

Justice F.L. Myers released his decision on October 28, 2025 in Nootchtai v. Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, 2025 ONSC 6071, after hearings on September 29, October 1 and 3.

The judge ruled the 5% contingency fee tied to the Fund’s $10-billion historic settlement with Canada and Ontario was “neither fair nor reasonable” in a mega-fund context and risked an unlawful champertous windfall.

What the Court Ordered

• Refund: The Legal Team must repay $232 million to the RHTLF immediately.

• Fee set on value: Total compensation is set at about $40 million—the ~$17.5M already paid plus an additional $23M success premium on a quantum meruit (value-of-services) basis.

• “Gift” funds released: The $255M the lawyers proposed to “gift” back to the Fund is to be released to the Fund and treated as regular settlement proceeds.

• Stay pathway: If the full $510M is placed in segregated trust, the court may entertain a stay pending appeal.

• Costs timeline: Costs submissions due Nov. 7, 2025 (Applicants), Nov. 21 (Respondent Lawyers), with possible further submissions by Dec. 5.

Why the 5% Was Rejected

Justice Myers accepted that counsel produced an “historic” result after 17 years of litigation, but found the contingency structure disproportionate given:

• Risk profile: The Legal Team’s financial risk was limited—clients covered disbursements (~$6.5M), most fees were billed (only part discounted), and the RHTLF secured financing that de-risked counsel’s receivables.

• Mega-fund effect: Percentage fees that work in ordinary cases can become “unseemly windfalls” in mega-fund settlements.

• Proportionality & integrity: The court stressed the need to protect beneficiaries’ recovery and the profession’s integrity, citing recent appellate guidance on proportional fees in very large settlements.

Conflict of Interest & Independent Advice

The Court found the 2011 partial contingency agreement was not fair at signing and unreasonable today, highlighting that:

• The lawyers did not ensure the Fund obtained independent legal advice about fee structure and risks.

• Clients were not fully advised on alternatives (fee caps, disbursement risk, adverse-costs protection) or the mega-fund implications of an uncapped percentage.

• Later advice that seeking a court assessment could delay distributions was incorrect; fees could have been segregated while paying members.

What This Means for Robinson Huron First Nations

• More settlement dollars remain with the 21 First Nations and ~40,000 members, including communities across the North that rely on distributions for housing, language revitalization, education, land stewardship and youth programs.

• The ruling underscores that litigation trusts must balance Indigenous governance practices with Ontario law on solicitor-client fees, transparency and fiduciary duty to beneficiaries.

• It sets a powerful benchmark for fee oversight in large Indigenous rights cases, including ongoing work on future annuity augmentation under the Robinson Huron Treaty.

Case Snapshot

• Case: Nootchtai v. Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, 2025 ONSC 6071

• Heard: Sept. 29, Oct. 1 & 3, 2025 — Released: Oct. 28, 2025

• Applicants: Atikameksheng Anishnawbek (Chief Craig Nootchtai); Garden River First Nation (Chief Karen Bell, Councillor Chester Langille)

• Issue: Review of lawyers’ fees sought by counsel to the Robinson Huron Treaty Litigation Fund after $10B settlement

• Outcome: $510M fee voided; ~$40M total compensation approved; $232M refund ordered; “gift” $255M returned to Fund.

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