02/14/2013 08:55 EST | Updated 04/16/2013 05:12 EDT

Veterans relieved $900M clawback settlement close

An almost $900-million class-action settlement over the clawback of military pensions is expected to be completed over the next two days in Halifax.

On Thursday, dozens of the 7,500 disabled veterans involved in the suit attended a hearing, which is the last step in the Federal Court process that has taken more than six years.

Many people at the hearing said they are relived the ordeal will soon be over.

The veterans sued the federal government because their long-term disability benefits were being reduced by the amount of their disability pensions, with some of the most gravely injured not receiving any of their pension.

Veterans have been complaining about the clawback of various benefits since the new Veterans Charter was introduced in 2006.

Alisa Sellar, whose husband is a veteran with multiple sclerosis, said this deal will finally give her family their life back.

"We don't have to sell our house anymore is what this means," she said.

"And my husband is very, very happy because he doesn't have to worry about me and the kids. He's been in a nursing home for six years. He's had MS for 25 years. His main concern is us and this to him means he won't have to worry about us anymore."

The lead plaintiff in the case is Dennis Manuge, a former solider who was injured in 2003. He has fought in the courts for more than six years to get money for veterans who have been disabled in a conflict zone or at home.

Last May, a Federal Court in Halifax sided with a group of veterans who sued the government over the way it handles disability group insurance.

The suit revolved around long-term disability benefits paid out to retired members of the Armed Forces under their military insurance plan.

Defence Minister Peter MacKay and Veterans Affairs Minister Steven Blaney announced the federal government would not appeal the decision and said it would work on a settlement agreement.

In July, MacKay ended the deductions for most disabled soldiers, but it took a special cabinet order – passed last fall – to get the measure enacted for those affected under the veterans affairs system.

A government-appointed negotiator, Stephen Toope, the president of the University of British Columbia, worked with lawyers representing the veterans on a settlement for the class-action lawsuit, which was finally settled in January.

The hearing, which began Thursday, is being asked to find that the agreement is fair, reasonable, and in the best interests of the 7,500 veterans involved.

The law firm that represents Manuge and all the other veterans, said Wednesday the proposed $887.8-million deal includes $424.3 million in retroactive payments to veterans that date back to 1976. It also includes $82.6 million in interest.

Part of the settlement includes access to a $10-million scholarship fund for class-action members and their families. The council representing disabled veterans will also donate $1 million to a charity for support of access to justice initiatives for veterans and $50,000 to Manuge for the work he has done to advance the case on behalf of veterans.

Hearing to rule on legal fees

The settlement also involves a request to the court to pay the legal fees of the attorneys at McInnis-Cooper, who've carried the case for the veterans since its inception in 2007. The firm is in line for a $66-million payout pending approval by Justice Robert Barnes.

The cash would come out of the $424 million dollars set aside for retroactive payments to veterans.

Ward Branch, one the attorneys representing the veterans, said it was the government that chose to drag out litigation.

Documents tabled in Parliament show the Conservative government spent $750,462 in legal fees fighting veterans over the clawback of military pensions.

A spokesman for MacKay has called the fees "grossly excessive."

Sellar said she disagrees that the fees are excessive.

"I don't see anything wrong with it, considering we thought we were going to pay 30 per cent, I think 7.5 is very reasonable," she said.

A few of the disabled vets don't mind what the lawyers are getting paid but they say they would like the federal government to pick up that tab.

Wallace Fowler, a veteran who suffers from post-traumatic stress syndrome, said he has more important things to worry about.

"That's the least of my worries, as long as we can get something in the going here so this doesn't happen again," he said.

The Federal Court judge will decide after two days of hearings whether or not to sign off on the deal.