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Federal outside legal spending trending downwards

End of cases such as softwood lumber allow for steady decline in use of firms
|Written By Elizabeth Thompson

OTTAWA — Federal government spending on outside legal help dropped last year, but while some departments like fisheries and labour slashed their expenses, others like the powerful Privy Council and the secretive Communications Security Establishment Canada had sharp increases.

An analysis by Law Times of spending figures tabled in the House of Commons shows spending on lawyers and legal assistance from outside the federal government dropped in the 2013-14 fiscal year, bringing it to one of the lowest levels in the past decade. While the final spending figures won’t be available until later this year, documents show that between April 1 and Dec. 9, government departments spent $43.6 million on everything from outside lawyers to mediators, arbitrators, bailiffs, and expert witnesses for an average of $5.4 million per month. That was down from $69.7 million or $5.8 million a month the previous year and $80.7 million or $6.7 million a month in 2011-12.

In total, between April 2006 and December 2013, the federal government spent $510 million on outside legal services.

Carole Saindon, spokeswoman for the federal Justice Department, said the government’s legal agent expenditures have been steadily declining in recent years and last year was no exception to that trend.

“The decrease is in large measure associated with the conclusion of significant international arbitrations over softwood lumber and timber, arising in B.C., Ontario, and Quebec, and the dismissal of cases before the Supreme Court involving the federal government,” she said.

While the director of public prosecutions remained the biggest buyer of outside legal services, its spending was down last year, dropping to $21 million in the first eight months of the year from $37.8 million the previous year.

In the documents tabled in Parliament, the service said most of the lawyers it engaged were for federal prosecutions.

“The department uses non-government lawyers (agents) to conduct federal prosecutions in areas where it does not have a regional office, or where it is impracticable or otherwise not cost-effective for cases to be handled by staff counsel.”

Overall, the prosecution service has spent $244 million on outside legal services since 2006, roughly 48 per cent of the government’s total spending in the legal area.

The Department of Foreign Affairs, Trade, and Development was the second-largest buyer of outside legal services. Its spending came to $7.6 million in the first eight months of 2013-14, compared to $10 million in 2012-13. While the department has spent $79.9 million for “legal counsel, legal advice, and other forms of legal assistance by non-government lawyers” since April 2006, it didn’t provide any details on the work performed.

Spending on outside legal services at the Canada Border Services Agency was on track to finish 2013-14 lower than in 2012-13. While the agency handed out $4 million worth of business in 2012-13, it spent only $2.1 million in the first eight months of the last fiscal year.

According to the documents tabled in Parliament, the agency’s biggest spending item for outside legal services last year was $1.9 million for “internal services” followed by $187,820 for criminal investigations. The previous year, criminal investigations topped the list of CBSA outside legal services spending at $3.2 million.

While the final tab is still unknown, the documents reveal that only eight months into the year, some federal government departments had already exceeded their previous year’s spending on legal services.

The Treasury Board, which oversees the federal public service, racked up $79,000 in legal services in the first eight months of 2013-14, compared with spending only $1,680 for all of the previous year.

At the Privy Council Office, which co-ordinates government departments and serves as the prime minister’s bureaucracy, spending on outside legal services shot up, fuelled by the Senate scandal and the legal battle between the prime minister’s office and former Conservative cabinet minister Helena Guergis.

The documents show the Privy Council spent $232,376 on outside legal talent in the first eight months of last year, versus only $54,643 in 2012-13.

The largest legal payout from the Privy Council last year was to Fasken Martineau DuMoulin LLP. The firm billed $141,847 to represent the prime minister’s former chief of staff, Guy Giorno, in a civil suit filed by Guergis. Following that was the $80,028 Bennett Jones LLP billed the Privy Council to represent Prime Minister Stephen Harper aide Ray Novak and Transport Minister Lisa Raitt in the same case.

Legal counsel for prime ministerial staffer David Van Hemmen in connection with the RCMP investigation of the payment by former chief of staff Nigel Wright to Sen. Mike Duffy resulted in $10,500 in billings for the Carroll & Wallace law firm.

Spending on outside legal counsel by the secretive Communications Security Establishment, Canada’s equivalent of the U.S. National Security Agency, was also up sharply from the previous year.

While spending hit $158,157 in the first eight months versus $54,643 in 2012-13, it was well short of the level in 2009-10 when it hit a high of $821,145. The agency gave no explanation, citing national security issues.

While spending on outside legal counsel has been dropping, Len MacKay, incoming president of the Association of Justice Counsel that represents 2,700 federal government lawyers, says the government could save money by turning to its own lawyers.

“Perhaps we shouldn’t be spending money on outside counsel, typically at a much higher rate than we would bill in-house,” he says. 

For more, see "Feds pouring big money into aboriginal litigation." To see a list of the top law firms billing Aboriginal Affairs and Northern Development Canada, click here.

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