A long-running lawsuit launched by veterans against the federal government is off the docket until after the federal election, if not for good.

The two sides were in a Vancouver court Monday to agree to hit pause on the case until May 2016 to see what the impact is of the reforms the government has made to benefits for veterans in recent months.

Should the changes be to the satisfaction of the veterans who launched the suit in 2012, the case will be over, said the veterans' lawyer Don Sorochan.

A group of veterans had filed the class-action lawsuit to argue that modern-day soldiers were being discriminated against compared with those who fought in the world wars and in Korea.

In their defence, government lawyers outraged veterans by asserting that the federal government has no extraordinary obligation to those who have fought for the country.

The lawsuit has been a black eye for the Conservative government, which saw itself as a champion for former soldiers and the military and which contributed to intense tension with the veterans' community.

Some groups had even threatened to actively campaign against the Conservatives during this fall's election campaign.

Since then, a raft of new measures have been introduced, including new pain and suffering awards, expanded access to permanent impairment allowances for the most severely disabled veterans and retirement income security benefits.

Commons recognizes 'moral obligation'

The government has also introduced a bill that recognizes the so-called "sacred obligation" to veterans; that legislation was originally introduced on its own but has since been bundled into the omnibus budget bill.

Sorochan said with the new legislation and regulations already on the table, they are willing to give the government until May 2016 to see if the situation improves, taking into account there could be a new government entirely after the planned October vote.

In exchange, the Conservative government agreed to walk away from its appeal of the decision that allowed the class-action lawsuit to go ahead, but a judge instead simply ordered the case be put on hold.

As of January, the government had spent over $700,000 fighting the veterans in court, money that should have been spent elsewhere, the NDP said.

"The veterans should not have had to take the government to court and the government should have not used taxpayers money to fight them," said NDP MP Fin Donnelly.

He brought a motion before the House of Commons last month on the responsibility of government to veterans.

The motion, which said, "Canadians recognize that the federal government has a moral, social, legal and fiduciary obligation to the women and men who courageously serve our country," passed unanimously.

It's now incumbent on the government to move ahead with its proposed reforms in their entirety, Donnelly said.

And the agreement between the two parties makes that clear; it puts a number of conditions on the deal, including that the new legislation must pass by Aug. 15 and regulations pertaining to priority hiring for vets also be in place by that date.

If not, the veterans could resume their case.