CROWN AGENTS BILL RECORD TAB FOR DRUG PROSECUTIONS

Drug prosecution costs soared to their highest level in history during the
Conservative government's first year in office - comprising more than half
the $50-million tab billed by private-sector law firms who represented the
federal Crown in criminal and civil litigation in 2006-2007.

The Government of Canada will pay almost $26 million for the fees and
disbursements of Crown agents who prosecuted illicit drug cases in the
fiscal year ending March 31, estimated Brian Saunders, the acting director
of public prosecutions in Ottawa.

That represents an almost $5-million hike — 24 per cent - from the year
before, according to Department of Justice (DOJ) records obtained under the
Access to Information Act (the final cost remains a projection because some
bills are still coming in). The increase is even more remarkable given that
private-sector prosecutors haven't had a pay rise since 1990. The most
senior federal prosecutors get $82 per hour, with hourly rates declining to
$30 for articling students.

In all, the total prosecutions tab for the war on drugs rose to a record
$60 million in 2006-2007, including the billings of some 800 prosecutors in
250 law firms across the country, plus about $34 million for prosecutions
handled in-house by staff prosecutors at the new Public Prosecutions
Service of Canada.

Rising last December out of the ashes of the DOJ's federal prosecution
service, the independent agency employs about 450 lawyers.

Saunders told The Lawyers Weekly the higher Crown agent drug prosecution
costs reflect stepped-up police enforcement last year, a five per cent
increase in the number of files as compared to 2005-2006, more outsourcing
to Crown agents by the agency's regional offices, and the complexity of
drug cases which frequently raise technical legal and constitutional
issues. "The files were taking longer [and] there was a higher carry-over
of files from 2005-2006 into 2006-2007 than there had been in the previous
two years," Saunders explained.

As usual, criminal prosecution costs ate up most of the Crown agent
monetary pie last year (civil litigation costs were $15 million) .

But civil litigators made up 11 of the 20 top-billing law firms in 2006-2007.

The #1 Crown agent, for the sixth year in a row, was Weil Gotshal and
Manges of Washington. D.C., which billed $6.4 million in fees and
disbursements as the lead counsel for Canada in the interminable softwood
lumber dispute with the United States. The softwood lumber fight has
generated the largest anti-dumping and countervailing duty cases in trade
history.

Led by Jean Anderson, the former chief international trade counsel for the
U.S. Commerce Department and a primary architect of the Chapter 19 dispute
settlement system for NAFTA, Weil Gothsal's team of a dozen attorneys
co-ordinates counsel for the provinces and industry, and works on U.S.
Commerce Department administrative reviews, and appeals of reviews, of
countervailing duty and anti-dumping orders. The firm has also successfully
defended Canada against allegations that it dumps hard red spring wheat
south of the border. Billings were down from $8.8 million in 2005-2006,
partly because the strong Canadian loonie goes further these days.

The legal highlight of the year was "litigation in the Court of
International Trade where we had two important victories for Canada,"
Anderson told The Lawyers Weekly. "Both of them went to the question
whether a U.S. agency decision that was invalidated by a NAFTA panel would
result in complete refunds of estimated duties. The answer is 'yes',
according to the Court of International Trade."

The #2 Crown agent was the powerhouse litigation firm of Lenczner Slaght in
Toronto. With nearly $4 million in fees and disbursements, including $2.5
million paid by the Department of Justice, and $909,000 paid by the
Department of National Defence, the 31-lawyer firm acts for the federal
government on at least four major cases. These include defending against a
$50-billion claim by civil service unions who allege their pension funds
were pillaged by the Crown, and pursuing a $1.5-billion civil claim by the
Crown in Ontario Superior Court against JTI-Macdonald Corp. and the
Reynolds tobacco empire for tax revenue lost due to an alleged cigarette
smuggling conspiracy in the 1990s.

"I guess the government, like many clients, recognized that we work
efficiently and well, and are good value for the money," said Ronald
Slaght, whose firm has discounted its much higher regular rates to take on
the government's high-profile and challenging work.

Under fee guidelines set in 1990, the federal Crown pays ad hoc domestic
agents on civil files $30 per hour for articling students, up to $200 for a
litigator with 20 or more years' experience, although more is sometimes
paid for very difficult or high-stakes litigation.

The #3 Crown agent, Calgary's Macleod Dixon, billed $2.2 million, the same
as the year before. The firm is defending the Crown in a blockbuster,
multi-billion-dollar breach of treaty and fiduciary duty law suit brought
by three Alberta Indian bands, who contend the Crown mismanaged their oil
and gas revenues. The case was launched in 1989, but the arduous trial on
the historical and money mismanagement phases of the case (another phase
will deal with oil and gas issues ) did not conclude until 2004, after a
four-year trial. Federal Court Justice Max Teitelbaum's December 2005
judgment, which found the rate of return paid by the government to have
been reasonable, and dismissed the bands' claims, was upheld last December
by a majority of the Federal Court of Appeal after an unprecedented 15-day
oral hearing.

Most of 2006 was spent preparing the Crown for that appeal, including
creating 300-pages of facta, said lead counsel Clarke Hunter, who has been
working on the case since 1993. "Six lawyers put time into it [last year],
as well as students and a team of paralegals," he told The Lawyers Weekly.
"It was a major job to assemble the factums because of the volume of
material," which included a four-year trial record. A computerized document
control and transcript system was essential to the task, he noted.

Given that there are several other phases of the case yet to be tried, not
to mention possible multiple appeals up to the Supreme Court of Canada,
Hunter, his firm's senior partner, conceded he could be looking at a life
sentence on the file. "'Daunting' would be a fair word," he said of that
prospect.

The top Crown agent amongst federal prosecutors, Murchison, Thomson &
Clarke of Surrey and White Rock, B.C. (#4 overall), billed $1.2 million,
the same as the year before, for its team of seven full-time federal Crowns
who prosecute marijuana grow operations and drug trafficking in and around
the second largest city in B.C.

The fees and disbursements of the other top Crown agents doing drugs,
fisheries, customs and tax prosecutions were: #5 Daigle & Libotte of
Moncton, N.B. ($1 million, up from $720,000); #6 J.M. LeDressay & Assoc. of
Langley, B.C. ($977,000, up from $708,000); #8 Victoria's McConnan Bion
O'Connor & Peterson ($907,000 up from $748,000) and #10 Nanaimo's Jones and
Company ($848,000, up from $745,000), #11 Greenbank, Murdoch & Co. of Port
Coquitlam, B.C. ($846,000, up from $785,000); #12 Baker Newby of Chilliwack
and Abbotsford, B.C ($761,000); #15 Mousseau DeLuca McPherson Prince of
Windsor, Ont. ($572,000, up from $535,000); and #16 Lee Inglis Albrecht
($527,000, up from $496,000).

Civil litigators rounded out the rest of the top 20 Crown agent.
Vancouver's Miller Thompson (#7 - $947,000) billed mostly to Environment
Canada for defending the government against claims that it negligently
permitted an inadequate clean-up of a contaminated Fraser River site during
the 1980s. Torys, of Toronto, #9, billed $900,000 for the work last year of
retired Supreme Court Justice Frank Iacobucci and other Torys lawyers, on
behalf o the Crown, in negotiating the historic $2.1 billion final
settlement in May 2006 of the Indian Residential Schools litigation, the
largest Canadian class action settlement ever.

At #13, Gowling Lafleur Henderson billed $683,000, much of it to the
Department of Public Works, while #14 Montreal's Desjardins Ducharme Stein
Monast billed $597,000 to the Department of Public Works for work related
to a $44-million civil suit launched in Quebec Superior Court in 2005 to
recover funds allegedly improperly received under the federal sponsorship
program.

WilmerHale of Washington, D.C. (#17) billed $484,000 for softwood
lumber-related representation, while Ottawa's Perley-Robertson, Hill &
McDougall (#18) charged $452,000, mostly to Public Works and the Department
of Industry. Calgary's Miles Davison (#19) billed $444,000, largely to the
Department of Indian and Northern Affairs for defending the Saddle Lake and
Whitefish band's claim for a declaration that the Crown mismanaged oil and
gas resources on their reserves. At #20, Montreal's Gilbert Simard Tremblay
billed $442,000 for its successful defence of federal tobacco advertising
restrictions.