Gambler First Nation files lawsuit against consulting firm over settlement pay

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This article was published 11/12/2023 (668 days ago), so information in it may no longer be current.

A Manitoba First Nation that recently reached a land settlement with the federal government worth hundreds of millions of dollars is embroiled in another legal battle — this time with the consulting firm that helped facilitate the deal.

A statement of claim, filed Dec. 4 at the Court of King’s Bench, argues Gambler First Nation should not have to pay P.M. Associates Ltd. roughly $1.5 million from the $310-million settlement.

The suit is predicated on a champerty defence, in which the First Nation claims it reached a retention agreement with Dal McCloy, an individual employee of the Winnipeg firm who later died and not with the firm itself.

“Following McCloy’s death, the defendant did not replace, nor attempt to replace, Mr. McCloy as primary contract under the retainer agreement with any other person or employee,” the claim says. “It would be unjust to require the plaintiff to compensate the defendant in the circumstances.”

The First Nation, which is located roughly 350 kilometres west of Winnipeg, retained the services of McCloy through P.M. Associates in 2011, asking him to file a series of land claims against the federal government.

According to the lawsuit, McCloy acted as “lead negotiator” and “financial adviser” over the next decade. In return, he was to be paid a pre-determined per cent of the federal settlement — equivalent to around $1.2 million.

When it became clear the settlement was imminent and the amount would total hundreds of millions of dollars, the lawsuit alleges P.M. Associates amended the agreement to increase its share of the deal by an additional $300,000.

The lawsuit claims Gambler officials were not consulted about such changes, and the community was forced to retain new legal counsel after Feb. 26, 2022, when McCloy died and P.M. Associates “completely ceased involvement in the claims.”

“It was an implied term of the retainer agreement that McCloy would remain the key contact and the lead negotiator given his individual skills and expertise, such that the retainer agreement was akin to a personal contract,” it says.

“McCloy’s death prevented the defendant from performing its duties under the retainer agreement and prevented the plaintiff from receiving any services under the retainer agreement.”

The Canadian government awarded Gambler First Nation with the final settlement Sept. 15.

Taylor McCaffrey LLP, the law firm representing P.M. Associates, has since agreed to hold the consulting firm’s share in trust, pending the outcome of the legal dispute between the two parties.

The First Nation is seeking to have the retention agreement labelled as champertous in the eyes of the Manitoba court system, therefore absolving it of any legal requirements to pay P.M. Associates.

P.M. Associates has not yet filed a statement of defence, and did not respond to requests for comment Monday.

Gambler officials declined to comment, citing the ongoing legal action.

tyler.searle@freepress.mb.ca