An Alberta judge has certified a class action suit for 5,600 clients of former Calgary lawyer David Blott, who is accused of swindling millions from those seeking compensation in the Independent Assessment Process of Canada’s Residential School Systems compensation settlement. He ultimately took about $21 million from the IAP program settlements fund.
“We don’t know where that money is,” said Maxime Faille, the Gowlings Firm lawyer who has taken on the case pro bono. “He says it is all gone but we find that unlikely. For sure, some of it is gone because some has gone to various expenses but not $21 million.”
Blott resigned as a lawyer in 2014 during an investigation of his work and was later disbarred.
Many of those involved in the class action suit are members of the Blood Tribe in Alberta – some of whom have died since the original lawsuit against Blott was filed in 2013. All of those involved in the suit are residential school survivors who were given the right to an Independent Assessment Process (IAP) claim in 2007. It was as this point that Blott approached the tribe in an attempt to sign up as many survivors as possible to assist with their IAPs.
In the suit, Blott is accused of failing to properly represent his clients, abusing their trust, charging excessive fees and putting his financial needs ahead of those of his clients. According to Faille, Blott also arranged for and profited from dubious loans to his clients as they waited for their settlement cheques.
“Mr. Blott along with others arranged for loans to be made backstopped against their settlement, but in many cases the loans – when you would add up all of the administrative fees – ended up charging a criminal rate of interest at 60%,” said Faille.
Sometimes the loans didn’t take the form of cash, added Faille.
“There would be electronics, televisions, computers and guitars and they were then charged exorbitant amounts,” he noted. “These were well in excess of the actual cost of these electronics.”
Then, on top of the usual 15% paid by the fund as lawyers’ fees, Faille said that Blott asked his clients for an additional 15% – reaping almost a third of their settlement totals for himself.
Once the survivor finally received their compensation, the total had been drastically reduced.
As for the actual claim process, Faille said that Blott treated the claims like “term papers,” often mismanaging the claims, getting clients to submit prewritten forms and failing to file many claims before he was forced to stop working as a lawyer. None of those clients can now re-file their IAP claims.
Faille said that when Blott did file claims, his clients would then not hear from him for an extended period until it was time to go to their hearing. Then he would meet with them for approximately five minutes before facing the tribunal.
“All kinds of bad things happened. There would be minimal preparation, and this was pretty heavy stuff, to put it mildly. So, he would not meet with people regularly and prepare them for what would be an extremely difficult and, in many cases, a traumatic experience. Having to retell or relive the most traumatic things that could possibly be inflicted on someone – it was really inappropriate with this lack of preparation. He was just rushing people through like cattle,” said Faille.
The other major problem was the enormous amount of discrepancies between the applications and what was then presented at the hearing. With no preparation and a lot of encouragement to exaggerate on the claim or in the hearing, many people with legitimate claims were not believed. As a result, their claims were significantly reduced.
According to Faille, Blott apparently ran a slick operation and went to great lengths to get community members working for him to recruit other potential claimants by offering them a finder’s fee.
“He quite cleverly did a lot of things to ingratiate himself to the community, which I find quite revolting. He would do things like going to sweats in the community and pretending to be on their side so that they would become involved,” said Faille.