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Lawyer fees questioned in billion dollar class action
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Lawyer fees questioned in billion dollar class action

Payments to plaintiffs in a multi billion dollar class action have been delayed as US politicians query the lawyers cut.In December last year, the long-running lawsuit over individual Indian…

Payments to plaintiffs in a multi billion dollar class action have been delayed as US politicians query the lawyers cut.

In December last year, the long-running lawsuit over individual Indian trust accounts was settled for around $4 billion.

The settlement proposed that $1.7 billion be allocated to the plaintiffs, and a $2.3 billion fund be set-up to buy American Indian land.

The class action, first filed in 1996 and seeking more than $55 billion, involved around 300,000 American Indians. It claimed the US Department of the Interior, the trustee of 145 million acres of land under the Dawes Act of 1887, allowed the US Government to give the best land to white settlers.

The initial settlement in December allowed for the lawyers involved to receive up to US$100 million in fees.

Last month, the Republican Senator John Barrasso of Wyoming, questioned this proposed payment publicly, with fellow Republican Senator Doc Hastings of Washington sending a letter to the lead counsel, Dennis Gingold, asking him to limit his fees to US$50 million in order for the Indians to receive more.

Gingold has since threatened to terminate the settlement and resume litigation unless he and his co-counsel receive fees of between US$50 to 100 million.

Both he and the lead plaintiff, Elouise Cobell, a member of the Blackfeet Tribe of Montana, argue that Congress does not have the authority to change the agreement and that a fee of US$100 million would represent just 3 per cent of the total settlement.

By comparison, plaintiff lawyers involved in the class action arising over the Enron fraud received fees in the vicinity of US$688 million - around 9.5 per cent of the total settlement.

The final payment received by lawyers in the Indian trusts settlements case must be approved by a Federal Court judge.

Payments to plaintiffs have also been delayed, due to funds set aside for the settlement being linked to bills for additional spending items and programs.

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