APTN National News
“Assignment” is a legal term referring to “signing over” money to another person. Chief Justice Brenner’s ruling reflected a section of the Indian Residential Schools settlement agreement which sought to protect compensation recipients from being taken advantage of.
Jon Faulds said that runs contrary to normal procedure, where lawyers are allowed to pay monies owed to third parties by their clients if they receive an assignment.
“The lender lends the money to the claimant, the claimant signs a portion of their ultimate recovery back to the lender as security for the loan, the lender sends a copy of that assignment to the lawyer through whose hands the money is going to be passing and the lawyer is bound by that assignment. That is the normal course,” he said. “What we have here is something unusual because the settlement agreement has made this specific provision that such assignments are not to be allowed in order to protect the claimants and to ensure that they get the full amount that’s coming to them. It’s a bit of an unusual situation for lawyers to have to say to someone who’s served them with an assignment that ‘sorry, that doesn’t work.’”
Faulds emphasized that loans are not necessarily a problem, but assignments certainly are.
“The lender is perfectly at liberty to pursue all its other rights to collect the loan that it’s made, assuming the loan is otherwise a proper loan,” he said. “They are just not allowed to scoop it out of the lawyer’s hands before it reaches the clients. That’s the issue that we’re concerned with here. What the settlement agreement says is that no assignment of any money payable under the settlement agreement is valid and what the Financial Administration Act also says is more or less the same, that monies payable by the government of Canada cannot be assigned.”