Tobacco smoke and mirrors

Russell
Russell Wangersky
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It was the last line in a Tuesday news release about the provincial government’s decision to take Big Tobacco to court: “The provincial government has retained the services of local law firm Roebothan McKay Marshall …”

What’s interesting is how the government picked its law firm.

First, it’s not as if the company doesn’t have plenty of cred as a personal injury law firm.

“Our St. John’s law firm has been working and fighting for our clients since 1981 when Danny Williams and his original team of lawyers first founded this law firm,” the law firm’s website boasts.

“We are Newfoundland and Labrador’s largest personal injury law firm. Our lawyers have a proven track record in St. John’s, Newfoundland and Labrador, and all over Canada; RMM lawyers have won over $200 million in compensation for our clients.”

Early Wednesday, I asked the provincial Department of Justice for information about how it had chosen its law firm, and how that firm would be paid.

Here are the exact questions:

1) How was the firm Roebothan McKay Marshall chosen to represent the province?

2) Was there a tender call, request for proposals or other competition for the work?

3) Were other law firms considered or offered a chance to bid on the work?

4) Is the law firm being paid a flat fee for hours worked, etc., or are they being paid by contingency?

5) If they are being paid by contingency, what percentage of any final settlement would they receive?

6) If they are being paid by straight fees, what is the fee calculation? (i.e., how much per hour for research, how much per hour for court time, etc.)

Partial answers

For question one, the province supplied this answer: “The provincial government required a lead counsel who had the necessary capacity to handle this large, complex file, as well as a firm that had the experience required. Roebothan McKay Marshall was retained because of their size as well as their extensive experience with handling complex medical cases and injury claims. They will be working closely with foreign legal consultants Humphrey, Farrington and McClain of Missouri who have expertise in dealing with tobacco companies.”

There was no tender call, request for proposals or other competition. As for whether other law firms were considered or offered a chance to bid on the work, the Justice Department replied:

“The province felt Roebothan McKay Marshall was the local law firm that best met the requirements for this work. As well, a number of local firms are conflicted as they represent the tobacco industry.”

When it came to the last three questions, the department says it will not discuss the arrangement it has with the St. John’s firm:

“(The) provincial government has an agreement in place with the law firm representing the province. The details will be made public when the legal action is concluded, however at this time the province will not be discussing the specifics of the agreement.”

The legal playing field must be getting crowded: after all, the Liberal government of Roger Grimes struck a contingency deal with a Missouri law firm in this lawsuit already — Humphrey, Farrington, McClain — agreeing to pay that firm 30 per cent of any settlement.

The Humphrey, Farrington, McClain deal may be the reason for the province’s reticence to talk about what it’s paying now.

It’s an agreement, after all, that the province went to court to try to keep secret. When Imperial Tobacco asked for the contingency agreement under the province’s access

to information legislation, the province refused, saying, in part, “The province would be placed at a tactical disadvantage if required to release (to Imperial) the contingency-fee agreement, along with any other material relating to this agreement. (Imperial) would be privy to information that it could use to its advantage in negotiating a settlement with the province.”

The province was ordered to release the agreement in 2007 — one of the reasons? Because portions of it, including the amount of the contingency fees involved, had already been released by the province.

(The province confirmed Wednesday that the province has a new contract with both the St. John’s firm and the Missouri firm.)

Many twists

It’s not the only twist and turn in the tobacco process: while the province originally hired three local lawyers to draft legislation to allow the province to sue tobacco companies — Dennis Browne, Graham Watton and Jamie Smith — the government later dismissed those lawyers in an effort to cut costs. (The team had been operating with a budget of $1.4 million in 2000.)

“We had no problem whatsoever with the performance of the outside counsel. ... We are very well placed to do this initiative. I just want to make sure that we do it in the most cost-effective manner,” then-justice minister Kelvin Parsons told The Telegram at the time in a telephone interview.

One of Parsons’ claims? That he was taking the work back in-house on the advice of the opposition Conservatives.

Untendered consulting and legal work has been an issue for years: in the 1980s, then-NDP leader Peter Fenwick called them “a festering pile of manure,” and the joke has often been made that the Lower Churchill may not be making money for the taxpayer yet, but it’s been turning big profits in untendered work for politically connected firms for dozens of years and successive political administrations.

It’s a shame that any number of governments hasn’t moved to improve the system, at least to provide transparency.

However the province makes its choice for legal help, the current tobacco case promises to be a juicy pile of litigation. First of all, the province has already passed legislation allowing it to retroactively sue tobacco firms to recover health-care costs statistically connected to smoking — there aren’t very many industries that have legislation specifically tailored to limit their legal rights, but the tobacco industry is facing that problem throughout most of North America.

Not only that, but a contingency fee, if a suit is successful, would truly be a home-run ball.

The size of that home run?

Hard to say. Right now, your accountable and transparent provincial government doesn’t think you have a right to know.

Russell Wangersky is The Telegram’s editorial page editor. He can be reached by email at rwanger@thetelegram.com.

Organizations: Department of Justice, Imperial Tobacco

Geographic location: Newfoundland and Labrador, Missouri, Canada North America.Not only

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  • U . Dowler
    February 12, 2011 - 17:41

    Ye shall reap what ye sow !