TradeEdge-Boy Scout abuse claims fund shouldn’t pay $21 million in lawyers’ fees, judge says

DOVER,TradeEdge Del. (AP) — The judge presiding over the Boys Scouts of America’s bankruptcy has rejected a $21 million fee request from attorneys hired by law firms representing survivors of child sexual abuse.

A group of personal injury firms called the Coalition of Abused Scouts for Justice wanted to have its legal fees and expenses paid by the Boy Scouts and by the trust fund established to compensate men who were abused as children by Boy Scout leaders and volunteers.

Judge Laurie Selber Silverstein denied the fee request Tuesday, having earlier expressed concern that any payment to attorneys representing coalition law firms would come from the pockets of abuse claimants.

Law firms are expected to take roughly 40% of any payments to clients from the $2.4 billion trust fund established for abuse survivors. Nevertheless, coalition attorneys argued that Silverstein should grant their “relatively modest” fee request because of the “extraordinary contribution” they made in developing a Boy Scouts’ reorganization plan.

The coalition played a dominant role in the bankruptcy, despite the existence of an official victims committee representing more than 80,000 abuse claimants. Coalition law firms represent some 18,000 claimants and are affiliated with more than two dozen law firms that collectively represent more than 60,000 claimants. Plan opponents have suggested that the huge number of claims was the result of a nationwide marketing effort by personal injury lawyers working with for-profit claims aggregators to drum up clients.

While noting that the coalition played a major role in the case, Silverstein said the group “does not meet any standard for reimbursement of fees.”

“More fundamentally, however, the coalition’s contribution did not transcend its self-interest,” the judge wrote. Some services it rendered duplicated those of the official victims committee, while others were done for the benefit of the law firms, not the abuse survivors, she noted.

The judge also said the fee reimbursement request “runs counter to the coalition’s representations to the court, and more importantly, to its members.”

In a 2020 court filing, coalition attorneys wrote — in boldface letters — that they were being paid by the law firms that formed the group, and that abuse survivors “will not, in any way, be responsible for the fees of coalition counsel.” Silverstein noted Tuesday that if the fee request were granted, abuse survivors would, in fact, be paying part of the fee.

A spokeswoman for the coalition issued a statement saying the group will appeal Silverstein’s ruling.

“Without coalition leadership and its efforts to secure consensus, the plan would not have been confirmed and put into practice,” the statement reads.

Doug Kennedy, an abuse survivor and co-chair of the official victims committee, said he was gratified by Silverstein’s decision. “Her ruling will now make it possible for more money to be put in the trust that is helping survivors,” he said.

A spokesperson for the Boy Scouts said the organization, which did not file any response to the coalition’s fee request, had no comment.

Silverstein’s ruling reinforced the concerns she first expressed in 2021, when she refused to allow the Boy Scouts to pay millions of dollars to coalition attorneys. At hearing earlier this year, she questioned whether the fee request was simply a “surcharge” on abuse victims.

The BSA’s reorganization plan took effect in April, despite ongoing appeals by opponents. It allows the Texas-based Boy Scouts to keep operating while compensating tens of thousands of men who say they were sexually abused as children.

Plan opponents have argued, among other things, that non-debtors, including local Boy Scout councils, troop sponsoring organizations and insurers, should not be allowed to escape further liability for child sexual abuse by contributing to the settlement trust. Survivors who oppose the plan say allowing those third parties to escape liability without their consent violates their due process rights.