A legal truce between the federal government and wounded and injured soldiers over the New Veterans Charter is in danger of falling part, according to a letter sent to Liberal MPs by a lawyer representing the veterans.

The peace agreement of sorts reached by the previous Harper government and the six Afghan war veterans who initiated a class action law suit over pensions and other benefits is set to expire on May 15, 2016.

The agreement, formally called an "abeyance agreement," put litigation on hold while the two sides tried to reach an out-of-court settlement. That agreement continued after the election of the Liberal government last October.

But according to the letter obtained by CBC News, justice department lawyers are threatening to return the case to court if the veterans do not drop their litigation entirely and accept an undisclosed settlement proposed by the federal government.

The veterans' lawyer says in the letter that justice department lawyers are ready to shut down the lawsuit by reviving some of the arguments they initially used during the Harper government era to block the case.

The letter tells Liberal MPs that the government lawyers are arguing Canada does not have a social contract or covenant with veterans, and that a "scheme providing benefits cannot be said to amount to a deprivation merely because claimant views the benefits as insufficient."

The Harper government spent over $700,000 fighting this class-action lawsuit in court.

The plaintiffs have argued in court that the lump-sum payment wounded veterans receive under the new charter — as opposed to the lifetime pension that was previously offered to veterans before 2006 — is inadequate compensation, as they receive less money over the course of a lifetime.

They've also argued that it violates their rights — the right to life, liberty and security of the person — under Section 7 of the Charter of Rights and Freedoms.

Proposed settlement rejected by justice lawyers, letter says

The letter, penned by Donald Sorochan, the lawyer representing the class-action lawsuit plaintiffs pro bono, is written to Liberal MPs and former Liberal candidates who were actively involved with the veterans file during the last election campaign.

"At a recent Ottawa meeting on April 11, 2016, we and our clients met with justice counsel, the minister and ministry officials," Sorochan writes.

"We had expected that there would be a discussion with ministry officials … instead of discussion occurring, justice counsel requested us to put a proposal in writing and stated that if the matter was not resolved by our clients dropping the litigation, the Court of Appeal would be invited by the Crown to render its decision."

Erin O'Toole, veterans affairs minister in the Harper government, reached a truce of sorts with veterans groups over pensions for wounded, injured soldiers just before the last federal election campaign. But attempts to reach an out-of-court settlement in the case have not succeeded. (Sean Kilpatrick/Canadian Press)

Sorochan writes that his clients did draft a proposed settlement in writing, but it was rejected by the government on May 9, 2016.

"Our proposal was rejected, but I cannot tell you more than that because of confidentiality constraints insisted upon by the government," the lawyer tells Liberals MPs.

The plaintiffs proposed that the government confirm its commitment to "recognizing the moral, social, legal and fiduciary obligation between the people and the government of Canada to provide equitable financial compensation and support services to past and active members of the Armed Forces who have been injured," among other demands.

The Department of Veterans Affairs said Wednesday that it would be inappropriate to comment on the matter as it is before the courts, but said that it will continue its work to "restore critical access to services and support for financial independence."

Frustration with dearth of details

Sorochan said that the Liberal government had campaigned on restoring veterans benefits, but Veterans Minister Kent Hehr has so far been frustratingly non-committal as to the schedule and timing of some of his top priorities, namely implementing lifelong pensions for wounded veterans and improving survivor benefits.

The 2016 budget did allocate more than $4.6 billion over three years to boost support for veterans, namely reopening services offices, increasing the disability award and boosting the earnings loss benefit for injured veterans and expanding access to the permanent impairment allowance — but it was silent on pensions, the biggest sticking point.

The Liberal platform in the last election explicitly promised to restore that benefit. "We will re-establish lifelong pensions as an option for our injured veterans, and increase the value of the disability award," the platform reads.

Sorochan said that his clients cannot be expected to drop their lawsuit against the government while they remain in the dark about some of their most pressing concerns.

"Many veterans were disappointed to see what was not included in the 2016 budget, including the promised lifetime pensions which campaign materials suggested would be introduced in the 2016 fiscal year," Sorochan writes to Liberal MPs.

"While the direction from the government to the minister and the department is very encouraging, as much clarity as possible is sought as to … what reforms are likely to be reflected in the 2017 budget," Sorochan writes. "It is necessary to know these details in order to assess the potential for positive enhancements in the treatment of the representative plaintiffs, class members and veterans generally."