The Third Party Litigation Funding Law Review: Canada

Market overview

Third party funding (TPF), or dispute finance as it is increasingly termed, has been embraced into the mainstream of Canadian litigation, including in terms of the types of parties using litigation funding, the scenarios in which parties rely upon litigation funding and the perspectives expressed by courts and lawmakers. As discussed in greater detail below, the law has confirmed the suitability of TPF in the context of class proceedings, bankruptcy proceedings and single-party commercial litigation, subject to certain requirements. As a result, the opportunities in the Canadian market for TPF are increasing.

International funders have taken note. The (recent) case law refers to a number of international litigation funders, including an Irish funder, Claims Funding International, British funders, Redress and Harbour, an American funder, Galactic TH Litigation Funders LC, and an Australian funder, Omni Bridgeway (formerly known as Bentham IMF), which was the first to open a Canadian office, in 2016, and expanded to Quebec (Canada's only civil law jurisdiction) in 2018. Augusta Ventures and Woodsford have since followed with offices in Canada.

The development of Canadian law and the Canadian legal market for TPF has been self-reinforcing. Increased funding opportunities have resulted in greater opportunities for the Canadian courts to scrutinise third party funding agreements (TPFAs), and to develop more sophisticated rules governing them. This exposure has brought the opportunity of funding to the fore. As one class actions lawyer recently noted, contingency fees are becoming increasingly insufficient to meet the costs of litigating a matter, and law firms are increasingly concerned with the risk involved in contingency fees: 'it is now beyond the capacity of most firms to self-fund . . . they have to get funding'.2 Moreover, in one judgment involving a TPFA,3 the court noted that 'anecdotal evidence suggests that indemnity agreements became more popular than resorting to the Class Proceedings Fund'.4 One reason for the popularity of TPF over the Class Proceedings Fund is that the latter has relatively limited resources, does not provide compensation for legal fees, and covers only limited disbursements during the proceedings.

The jurisprudence regarding TPF has been typically considered in the context of class proceedings, as courts in Canadian common law jurisdictions (all provinces aside from Quebec) must approve a TPFA at the outset of the case for it to be binding on the class. At the same time, however, litigation funding for single-party commercial litigation and bankruptcy proceedings is becoming more commonplace in Canada, as described in further detail below.

Legal and regulatory framework

i Maintenance and champerty

For most of the twentieth century, the legal landscape regarding TPF was overshadowed by the common law doctrines of maintenance and champerty.5 The Court of Appeal of Ontario described these concepts in McIntyre Estate v. Ontario (Attorney General) as follows:6

[m]aintenance is directed against those who, for an improper motive, often described as wanton or officious intermeddling, become involved with disputes (litigation) of others in which the maintainer has no interest whatsoever. Champerty is an egregious form of maintenance in which there is the added element that the maintainer shares in the profits of the litigation

The concept and prohibition of champerty has long been codified in the Act Respecting Champerty RSO (1897) (the Champerty Act), which states that:

1 Champertors be they that move pleas and suits, or cause to be moved, either by their own procurement, or by others, and sue them at their proper costs, for to have part of the land in variance, or part of the gains.
2 All champertous agreements are forbidden, and invalid.

As outlined in jurisprudence and in the Champerty Act, the prohibition on maintenance and champerty is intended to discourage 'unnecessary' litigation7 in Canadian courts as a result of the 'officious intermeddling' of a third party. The law took a particularly dim view of an individual deriving a profit from this misconduct, so much so that champerty was criminalised in Canada until the mid-twentieth century.

Notwithstanding the prohibitions against maintenance and champerty, the concept left open the possibility of 'proper' forms of litigation support. More specifically, the courts' early analysis of the issue in Newswander v. Giegerich emphasised the concern over a maintainer (i.e., the third party that maintains the party with a direct interest in the claim) who is 'stirring up strife'.8 In other words, the motive of an alleged maintainer was particularly important to determine if the act was, in fact, maintenance.

Champerty in Canada is a 'subspecies' of maintenance, as there cannot be champerty without maintenance.9 Accordingly, the concept of champerty in Canadian law similarly invokes the concept of proper and improper motives underpinning litigation funding. In Goodman v. R,10 Goodman was charged with champerty after agreeing to assist an improvident claimant injured by a streetcar in exchange for a share of any proceeds. However, the Supreme Court of Canada (SCC) quashed Goodman's conviction and held that his conduct did not amount to officious intermeddling as he had not stirred up strife.11 Following Newswander and Goodman, maintenance and champerty were removed from the Criminal Code in 1953.12

The prospect of TPF in Canada was significantly enhanced in the early 2000s when helpful jurisprudence developed in the context of contingency fee arrangements and class proceedings. Most notably, in 2002, the Ontario Court of Appeal found that the interests of justice can, in fact, be served by allowing third parties to fund litigation. In McIntyre Estate v. Ontario (Attorney General),13 a plaintiff who intended to commence an action against Imperial Tobacco and Venturi Inc for wrongful death of her husband first sought a declaration from the Court that the contingency fee arrangement with her lawyers was not prohibited by the Champerty Act. The Ontario Court of Appeal found that a determination of the proposed agreement as champertous depended on the outcome of the litigation. It considered the funder's motive as a proper consideration and confirmed that a decision as to whether a particular agreement is champertous is a fact-dependent determination, requiring the court to inquire into the circumstances and the terms of the agreement.14 In making these findings, it was clear that the Court was aware of increasing concerns over access to justice and the potentially beneficial role of contingency fee agreements in this regard. This evolution in the priorities of the Canadian justice system necessitated a more flexible understanding of champerty and the applicability of the Champerty Act.

ii Class action funding

Class proceedings have provided a fruitful area for the development of Canadian jurisprudence regarding TPFAs. Much of the law has developed around this model in the class proceedings context, as TPFAs concluded between a representative plaintiff and a TPF are subject to the requirements of judicial review and approval.15

In 2009, the courts considered the legality of TPFAs in Metzler Investments GMBH v. Gildan Activewear Inc in detail.16 In Metzler, a representative plaintiff moved for the approval of a costs indemnification agreement entered into with an Irish company whose main business was litigation funding in Europe. Relying upon the analysis of McIntyre, the court applied the existing law on contingency fee arrangements to third party involvement in litigation. It found that case law pointed to 'two crucial elements' that constitute a champertous agreement:17 the involvement must be spurred by some improper motive; and the result of that involvement must enable the third party to possibly acquire some gain following the disposition of the litigation.

As a TPFA has, by its very nature, the purpose of gain for the third party following the disposition of the litigation, the first consideration was most vital to the assessment of champerty in the context of TPF. Metzler, therefore, confirmed that the principles of fairness and reasonableness, the importance of the motive underpinning the funding arrangement and the increasingly relaxed application of the Champerty Act – all of which was developed in the context of the McIntyre Estate analysis of contingency fee arrangements – could apply equally in the context of TPFAs.

Since 2009, the judicial review of TPFAs between funders and representative plaintiffs in class proceedings has provided useful guidance on the law applicable to TPF. For example, the courts have provided useful commentary in the following cases:

  1. In Dugal v. Manulife Financial Corp,18 Strathy J approved a funding agreement, under which a third party agreed, inter alia, to indemnify the plaintiffs against their exposure to the defendants' costs, in return for a 7 per cent share of the proceeds of any recovery in the litigation.19 The court built upon the principles articulated in McIntyre Estate and Metzler,20 and recognised that funding agreements had been approved in other provinces of Canada, albeit without reasons,21 as well as in other common law jurisdictions around the world.22
  2. In Fehr v. Sun Life Assurance Company of Canada,23 the court discussed the law on litigation funding and reviewed the key judgments (identified as McIntyre Estate in 2002, Metzler in 2009 and Dugal in 2011).24 It concluded that TPFAs are not categorically illegal on the grounds of champerty or maintenance, but a particular TPFA might be illegal as champertous or on some other basis, and that a plaintiff must obtain court approval to enter into a TPFA.
  3. In Labourers' Pension Fund v. Sino-Forest,25 the representative plaintiffs moved for approval of a funding agreement that was described by the court as being nearly identical to the one approved by Justice Strathy in Dugal.26 The court nevertheless identified individual key terms of the funding agreement, including the grounds of the funder's agreement to pay the plaintiffs' adverse costs orders and the terms of recovery on a settlement or judgment in favour of the plaintiffs. Upon doing so, the court approved the funding agreement.
  4. In Bayens v. Kinross Gold Corporation, the court noted that the 'concept of third party funding is a work in progress' and that 'courts have been left to develop the approval criteria for third party funding largely on their own initiative, relying on common sense, knowledge of the problems of access to justice and of the administration of justice, and academic commentary'.27 While the court did not go into the same detail regarding the terms of the funding agreement, it nevertheless approved the agreement based on principles derived from the above-mentioned cases (and particularly, Fehr, Metzler and Dugal).28
  5. In Houle v. St Jude Medical Inc,29 the Ontario Superior Court (ONSC) provided a thorough analysis of the law regarding approval of TPFAs and specific terms contained therein. The ONSC once again confirmed that 'deciding whether to approve a [TPFA] will depend upon the particular circumstances of each case';30 however, it also opined that, based on the foregoing case law, the court must be satisfied of at least four criteria to approve a TPFA.31 On appeal, the ONSC Divisional Court seemingly confirmed the above analysis by noting that the ONSC 'applied the proper principles and provided a roadmap to the parties if they wish to proceed under the proposed type of arrangement'32 and upheld the decision of the ONSC.
  6. The law on TPF developed significantly in Quebec, Canada's only civil law jurisdiction, in 2014. In Marcotte v. Bank of Montreal, a class action against chartered banks was funded by two third parties. Like the analysis of funding arrangements in common law provinces, the Superior Court of Quebec determined that, without funding from third parties, the plaintiffs could not have pursued the case and been reimbursed fees that had been illegally collected by the financial institutions, and that funding provided a 'path to justice'.33
  7. In Difederico v. Amazon.com Inc, 2021 FC 311 (CanLII), the Federal Court in a class action claiming damages of C$12B approved a funding agreement wherein the funder agreed to pay disbursements and adverse costs up to a confidential maximum, as well as security for costs if required. In approving the funding agreement, the Federal Court noted that funding was required to facilitate access to justice as the case would otherwise not be prosecuted without a funder's support. Without developing the basis for the observation, the Court commented that third party funding ought not to be approved if it is not necessary for a particular proceeding, which is arguably a novel formulation of the test in that it elevates this factor to being determinative or 'paramount', as discussed by the Divisional Court in Houle (2018 CarswellOnt 17713 (Ont. Div. Ct.) at para. 31.
  8. In Hoy v. Expedia Group, 2021 ONSC 2840 (CanLII), in which the Court declined the invitation to insert itself into the bargain between the parties.

For further examples of court consideration of TPFAs, see Stanway v. Wyeth Canada Inc,34 Schneider v. Royal Crown Gold Reserve Inc,35 Berg v. Canadian Hockey League,36 and, most recently, David v. Loblaw,37 JB & M Walker v. TDL Group,38 Drynan v. Bausch Health Companies Inc,39 Tidd v. Regional Health Authority,40 Heller v. Uber Technologies Inc,41 Lilleyman v. Bumble Bee Foods LLC,42 Galloway v. AB,43 Flying E Ranche Ltd v. Canada (Attorney General),44 and Kan v. Kew Media Group Inc.45

In July 2020, Ontario introduced amendments to the Class Proceedings Act 2002, including various new provisions concerning TPF and requirements for the approval of TPFAs.46 Under the new legislative framework, which came into force in October 2020, a court will not approve a TPFA except where it is satisfied that the agreement is fair and reasonable, the agreement does not impair the solicitor–client relationship, and the funder will be able to satisfy adverse cost awards, to the extent it has agreed to provide an indemnity for such risks. The amended Class Proceedings Act, 2002 also allow successful defendants in class actions to recover any awarded costs directly from the unsuccessful claimant's funder.

iii Single-party commercial litigation

Despite the above jurisprudence in the class proceedings context, as at 2015, the law on TPF in Canada remained relatively underdeveloped in the context of single-party commercial litigation. However, that year, the courts took a step forward in Schenk v. Valeant (Schenk).47

In Schenk, the court case drew upon the jurisprudence in the class proceedings context and extended similar principles to single-party commercial litigation. Justice McEwen commented that '[t]ypically, such agreements have arisen in class proceedings' but that he saw 'no reason why such funding would be inappropriate in the field of commercial litigation.'48 McEwen J also commented that 'the statutory and common law prohibition on champerty and maintenance in the Province of Ontario must be considered'.49 In applying this law to the facts of the particular TPFA at issue in Schenk, the ONSC declined to approve the agreement.50 However, he granted the plaintiff, Schenk, the opportunity to revise the agreement and bring a further motion for approval. In other words, there is no reason why TPF cannot exist in the single-party commercial litigation context, but TPFAs must be based upon based reasonable and fair terms.

There have been further decisions in the single-party commercial context. For example, in Seedlings Life Science Ventures, LLC v. Pfizer Canada Inc (Seedlings),51 the court considered the enforcement of the plaintiff's patent against an international pharmaceutical company. Seedlings sought approval of the agreement, but, as explained in Section IV.ii, the Court ultimately concluded that it did not need to approve the funding agreement. This case demonstrates the growth of funding beyond the class action context, which has contributed to an increasing divergence in the law applicable to TPFAs in the class action context and those in the context of single-party litigation.

The developing common law has also applied to bankruptcy proceedings. In a March 2018 decision, Re 9354 9186 (formerly Bluberi Gaming Technologies Inc) and 9354 9178 (formerly Bluberi Group Inc),52 the Quebec Superior Court relied upon Kinross (cited above under class actions) and Hayes v. City of Saint John53 to find that TPFAs 'should be approved, subject to [certain] principles' that reflect the considerations addressed in common law jurisprudence. The SCC ultimately upheld the judgment of the Quebec Superior Court, by focusing on the fairness of the TPFA in its reasons, which harkens back to the guiding principles first articulated in McIntyre Estate v. Ontario (Attorney General). The Court unanimously found that the Companies' Creditors Arrangement Act Court properly exercised its discretion to approve the relevant TPFA after finding it to be 'fair and reasonable'. The TPFA was not a plan of arrangement and did not need to be presented to Bluberi's creditors for a vote.

Structuring the agreement

i Class actions

Canadian case law demonstrates that parties to a TPFA must conclude an agreement that the courts will approve as being fair and reasonable and non-champertous. In recent judgments, the courts have focused on the typical clauses in TPFAs in the Canadian market to assess fairness, such as:

  1. the terms on which the funder will pay legal fees, disbursements, security for costs (if ordered), costs assessed against the plaintiff and a portion of docketed time of counsel;
  2. clauses governing the flow of information regarding the proceedings;
  3. the agreement on the portion of the proceeds granted to the funder if the action is successful;
  4. clauses regarding the conduct of proceedings and settlement, including confirming that counsel take instructions from the clients, not from the funder;
  5. the representations and warranties of the claimants in respect of the claims and the pursuit thereof; and
  6. the termination provisions, both in terms of the right to terminate the TPFA and the consequences thereof.

In construing the above terms and determining whether they are unfair or champertous (or both), the courts will rely upon judgments regarding similar terms captured in other TPFAs. For example, as set out in Section II.ii, the ONSC recognised that the TPFA at issue in Labourers' Pension Fund was materially the same agreement as had been approved in Dugal.54 The Court approved the TPFAs, as submitted, in both cases. However, as funding arrangements expand beyond the costs-indemnity-plus-minimal-disbursements model seen in the early class action jurisprudence, comparisons to prior agreements may be more difficult to make. For example, in JB & M Walker, the funder agreed to pay all the legal fees and disbursements, in addition to covering any costs awards, so it was more difficult to draw analogies to earlier cases.

ii Single-party commercial litigation

While the courts have a broad supervisory role over class actions, consistent with the responsibility to protect the interest of class members, no such mandate exists in single-party litigation. If called upon to review a funding agreement, it appears that the courts will look to the three key criteria set out in Schenk: (1) the funder did not 'stir up' the litigation; (2) the funder cannot control the litigation; and (3) the funder's return must be reasonable. In Schenk, the court drew guidance from Ontario's Contingency Fee Regulations, which allow a return of up to 50 per cent of the litigation proceeds.

Disclosure

Disclosure issues and the question of legal privilege have developed differently in the class proceedings setting compared to the single-party commercial litigation setting. In determining what may need to be disclosed, and what aspects of a TPFA may be privileged, the setting of the dispute is important.

i Class actions

The disclosure obligations vary by province. For example, in Alberta and Nova Scotia, the courts will approve an agreement on an ex parte basis.55 However, in New Brunswick, the defendants must be given notice, but are not provided with a copy of the TPFA and can therefore only address overall principles without application to the specific agreement.56

Ontario and British Columbia require notice to the defendants, who must receive a copy of the agreement. As set out in Kinross, in the class proceedings context, 'a TPFA must be promptly disclosed to the court, and the agreement cannot come into force without court approval. Third party funding of a class proceeding must be transparent, and it must be reviewed to ensure that there are no abuses or interference with the administration of justice. The TPFA is not itself a privileged document.'57 Under the amended CPA, plaintiffs are required to share a TPFA with defendants and file a copy of the agreement, subject to redaction of information that may reasonably be considered to confer a tactical advantage.58

The issue of privilege in a class proceeding context also arose in Fehr. In this case, the court reaffirmed that TPFAs are not privileged and even if they were, that privilege has either been rebutted or waived.59 Consequently, the court cautioned that 'as a matter of best practices, an applicant for third party funding should not include extraneous and otherwise privileged information in a third party funding agreement'.60

In David v. Loblaw,61 the court was confronted with an objection by defendants in a proposed class action over an undertaking for security for costs by Bentham IMF (now Omni Bridgeway), arguing that the redaction of the cap on funding obligations raised concerns over the sufficiency of the undertaking. In response to the objection, the court confirmed that it had reviewed the unredacted version submitted to the court under seal and that it was satisfied that the funder's obligations to fund the litigation would be sufficient to address any adverse costs award. Therefore, the parties may redact terms that provide insight into budget and strategy, as long as those terms are disclosed to the court.

ii Single-party commercial litigation

In the commercial litigation setting, the Federal Court has found that 'there are no procedural requirements for the approval of a party's funding agreement outside of class proceedings'62 and that the question is strictly a matter of contract between the funder and the plaintiff. In Seedlings Life Sciences Ventures LLC, the Federal Court declined to approve the TPFA, ruling that 'where the Plaintiff is asserting its own rights against the Defendant, th[e] Court has no jurisdiction to make any determination in respect of any funding agreement to which the Plaintiff is a party'.63 To the apparent benefit of funded litigants in the commercial litigation setting, the Court questioned why its approval would be necessary and confirmed that a '[d]efendant has no legitimate interest in enquiring into the reasonability, legality or validity of [the plaintiff's] financial arrangements, its counsel's fee structure or the manner in which [the plaintiff] chooses to allocate the risks and potential returns of the litigation'.64

In both Schenk and Seedlings, the agreement came before the court because the funder and plaintiff chose to make the agreements subject to court approval. The finding in Seedlings appears to narrow the applicability of the champerty and maintenance issue to the funder and funded plaintiff only, rather than being a relevant consideration in the action between the funded plaintiff and defendant. While not yet conclusively resolved, this narrowing of the champerty issue seems to limit the need to disclose terms of a TPFA in the context of single-party commercial litigation (although clients and their funders may continue to voluntarily disclose their agreements in any event).

On the issue of privilege in the commercial litigation setting, the Federal Court has found that litigation privilege attaches to certain aspects of the TPFA at issue, particularly in respect of the details regarding the funding commitment and the temporal variables of the indemnity provisions, which, if disclosed, would provide a tactical advantage to the opposing party.65

Costs

In Canada, costs awards typically 'follow the event', such that the successful party is entitled to recover a portion of its legal costs. In the litigation context, the recovery is determined on a partial, substantial or full indemnity basis. Substantial indemnity on costs is typically reserved for exceptional cases, particularly where there is reprehensible conduct by a party either in the circumstances giving rise to the claim or during the course of the proceedings.

In the context of TPFAs in class proceedings, the courts have required a funder to provide security for costs as a precondition for approving a TPFA66 or, more recently, an undertaking for security for costs.67 The issue of whether a defendant would be given a direct right against the security was previously unresolved in case law68 but has been addressed in Ontario by the revised CPA, which indicates that a defendant has a direct right of action against a funder, to the extent of the indemnity provided by the funder.69

In arbitration, the issue of costs is determined at the discretion of the tribunal. Domestic arbitration statutes typically grant the tribunal the discretion to award costs. In Ontario, the Arbitration Act 1991 further sets out factors, such as the value of a prior offer to settle, that may be taken into consideration by the tribunal when considering a costs award. The presence or absence of a funding agreement is not expressly included in the factors that a tribunal may consider when rendering a costs award.

The year in review

In past years, the development of the law on TPF has been defined by the consolidation of jurisprudence regarding TPFAs in different types of legal proceedings, including class actions, single-party commercial litigation and bankruptcy. The trend continued in early 2020, beginning with the Supreme Court's decision in Bluberi. It continued with the Court's application of the 'factors as set out in Houle' for assessing the approval of TPFAs, as summarised in Singh and Tidd.

The courts in Canada are grappling with the issue of how involved they should be in scrutinizing the commercial bargain of the parties to a TPFA. Significantly, the Amazon and Expedia Group cases create a curious divergence in the stance of the court regarding the terms of a negotiated TPFA. In Amazon, the Court actively involved itself in the commercial terms of the TPFA in order to ensure that the plaintiffs received sufficient recovery, even if the eventual outcome is lower than expected. It also indicated that 'necessity' may be a paramount consideration for approval of a TPFA, which introduces some uncertainty as to whether well-capitalized plaintiffs and claimants can make use of TPF to de-risk their litigation and allocate their cash to other priorities. On the other hand, in Expedia Group, the Court took a more 'hands off' approach. The disposition of the court as it relates to commercial terms of TPFA and how these terms reflect access to justice – which is the primary concern of the courts – will be an important trend to follow in coming years.

Conclusions and outlook

Overall, the law regarding TPFAs continues to develop favourably for the funding industry in Canada. There are further examples of successfully approved TPFAs (e.g. Uber Technologies Inc, Bumble Bee Foods LLC,70 and Flying E Ranche Ltd), which provide further clarity on the components of an acceptance of TPFAs in the context of class proceedings. The Supreme Court's ruling in Bluberi was perhaps the clearest statement to date that Canadian jurisprudence is receptive to TPF and will treat 'fair and reasonable' TPFAs with approval in a range of legal proceedings. As set out above, it will be important to follow the Court's disposition to specific TPFA terms, particularly in light of the potential dichotomy between Amazon and Expedia Group as to the proper disposition of the Court in respect of agreed commercial terms.

It will also be important to watch the extent to which legislatures guide the evolution of third party funding in Canada. Legislatures have begun amended existing statutes to address TPF. For example, the recently amended Chapter 233 of the British Columbia International Commercial Arbitration Act RSBC 1996 modified recognition and enforcement provisions to expressly confirm that '[f]or the purposes of subsection (1)(b)(ii), third party funding for an arbitration is not contrary to the public policy in British Columbia.'71 Additionally, in May 2021, the Government of Canada announced the a new model Bilateral Investment Treaty known as the Foreign Investment Promotion and Protection Agreement Model, which includes obligations for claimants to disclose third party funding.

Finally, following the Final Report of the Law Commission of Ontario released in July 2019, which made a number of recommendations for the amendment of the CPA to permit TPF, Ontario introduced an amended CPA in 2020 with specific provisions72 dealing with TPFAs. All of these developments suggest a greater role and interest in TPF from Canadian legislatures (both federal and provincial), which could take a more active role in steering this area of law into the future, either to capture the principles that have been articulated in jurisprudence to date or to introduce additional considerations in response to the growing dispute finance market.

Footnotes

1 Hugh A Meighen is a partner at Borden Ladner Gervais LLP. The author wishes to thank Paul Rand, Naomi Loewith and Geoff Moysa of Omni Bridgeway Canada for their assistance in preparing this chapter.

2 'Third-Party Litigation Funding', Canadian Lawyer Magazine, 3 January 2017.

3 Bayens v. Kinross Gold Corporation, 2013 ONSC 4974 (Kinross).

4 ibid. at para. 31. The Class Proceedings Fund, which has been established by the Law Foundation of Ontario, '[p]rovides financial support to approved class action plaintiffs for legal disbursements' and '[i]ndemnifies plaintiffs for costs that may be awarded against them in funded proceedings'. Class Proceedings Fund, 2017 Law Foundation of Ontario, online source: http://www.lawfoundation.on.ca/class-proceedings-fund.

5 It is worth noting that 'champerty' is a common law concept and, as confirmed by the Quebec Court of Appeal in Montgrain v. Banque Nationale du Canada, 2006 QCCA 557, 'the concept of champerty is inapplicable in Quebec civil law' (para. 63).

6 (2002), 61 O.R. (3d) 257 at para. 26.

7 Fischer v. Kamala Naicher, 8 Moo Ind. App. 170 at p. 187, cited in Newswander v. Giegerich [1907] 39 SCR 354 at p. 361.

8 Newswander v. Giegerich [1907] 39 SCR 354 (Newswander).

9 McIntyre Estate v. Ontario (Attorney General), 61 OR (3d) 257; 218 DLR (4th) 193; [2002] OJ No. 3417 (QL); 116 ACWS (3d) 527; 164 OAC 37; 23 CPC (5th) 59, at para. 34.

10 [1939] SCR 446 (Goodman).

12 The Criminal Code was consolidated in 1953, at which time all common law offences were abolished. However, under the Champerty Act, champerty remained a tort in common law jurisdictions and has typically had the effect of acting as a shield against the enforcement of champertous agreements (rather than serving as the basis of an action for damages, as in Newswander).

13 61 OR (3d) 257; 218 DLR (4th) 193; [2002] OJ No. 3417 (QL); 116 ACWS (3d) 527; 164 OAC 37;23 CPC (5th) 59 (Ont CA) (McIntyre Estate).

14 McIntyre Estate, at para. 27, 32, and 79-80. See also, R Agarwal and D Fenton, 'Beyond Access to Justice: Litigation Funding Agreement Outside the Class Actions Context' 59 CBLJ 65 (Thompson Reuters), at p. 65.

15 R Agarwal and D Fenton, 'Beyond Access to Justice: Litigation Funding Agreement Outside the Class Actions Context' 59 CBLJ 65 (Thompson Reuters), at p. 65.

16 Metzler Investment GMBH v. Gildan Activewear Inc., 2009 CanLII 41540 (ON SC) (Meltzer).

17 ibid., at paras. 44–45.

18 Dugal v. Manulife Financial Corp., 2011 ONSC 1785 (Ont SCJ), at paras. 16 and 37 (Dugal); see also, Dugal v. Manulife Financial Corp., 2011 ONSC 3147 (Ont SCJ), at para. 5.

19 ibid., at para. 1.

20 ibid., at paras. 19–20.

21 For example, MacQueen v. Sydney Steel Corp (19 October 2010), Action 218010 (NSSC), cited at ibid., at para. 22.

22 Dugal at para. 24.

23 2012 ONSC 2715 (Fehr).

24 See, Labourers' Pension Fund v. Sino-Forest, 2012 ONSC 2937, para. 11.

25 2012 ONSC 2937 (Labourers' Pension Fund).

26 ibid., at para. 9. In fact, the funder in Labourers' Pension Fund was the same entity as had appeared in Meltzer and Dugal.

27 Kinross, at para. 37.

28 Kinross, at para. 41.

29 Houle v. St. Jude Medical Inc., 2017 ONSC 5129, para. 18.

30 ibid. at para. 72.

31 ibid., at para. 63. (1) the agreement must be necessary to provide access to justice; (2) the access to justice facilitated by the TPFA must be substantively meaningful; (3) the agreement must be a fair and reasonable agreement and facilitate access to justice while protecting the interests of the defendants; and (4) the third party funder must not be overcompensated for assuming the risks of an adverse costs award because this would make the agreement unfair, overreaching and champertous.

32 Houle v. St. Jude Medical Inc., 2018 ONSC 6352 (CanLII), at para. 52.

33 Marcotte v. Banque de Montréal, 2015 QCCS 1915.

34 2013 BCSC 1585.

35 2016 SKQB 278.

36 2016 ONSC 4466.

37 2018 ONSC 6469.

38 JB & M Walker Ltd / 1523428 Ontario Inc. v. TDL Group, 2019 ONSC 999.

39 Drynan v. Bausch Health Companies Inc., 2020 ONSC 4379 (Drynan).

40 2020 NBQB 140, at paras. 8–10. This case also summarised factors in determining whether to approve a TPFA, which were set out in Houle.

41 2021 ONSC 5434.

42 2021 ONSC 4968.

43 2021 BCSC 320.

44 2020 ONSC 8076.

45 2020 ONSC 5591.

46 Class Proceedings Act, 1992, S.O. 1992, c. 6 (CPA).

47 Schenk v. Valeant, 2015 ONSC 3215.

48 ibid., at para. 8.

49 ibid., at para. 8.

50 In Schenk, the plaintiff and the funder revised the TPFA in accordance with the ONSC's directions and resubmitted it to the Court for successful approval.

51 2017 FC 826.

52 2018 QCCS 1040, 16 March 2018. This matter proceeded under the rubric of the Companies' Creditors Arrangement Act, which grants the courts a broader approval and oversight role (as in class actions) than that found in standard commercial disputes.

53 2016 NBBR 125.

54 Labourers' Pension Fund, at para. 9.

55 See, e.g., Hobshawn v. Atco Gas and Pipelines Ltd (14 May 2009), case No. 0101-0499 (ABQB), cited in Dugal at para. 21.

56 Hayes v. The City of Saint John et al., 2016 NBQB 125.

57 Bayens v. Kinross Gold Corporation, 2013 ONSC 4974, at para. 41; see also, Fehr, at paras. 89–90.

58 CPA, s. 33.1(4) and (5).

59 Fehr at para. 141.

60 Fehr at para. 142. Underscoring the importance of disclosure, in Davies v. The Corporation of the Municipality of Clarington (2019 ONSC 2292, at para. 71.), the court refused to award loan interest as a properly recoverable disbursement in a costs decision following a class action proceeding on the basis that the loan agreements were not disclosed to the court.

61 2018 ONSC 6469.

62 Seedlings Life Science Ventures, LLC v. Pfizer Canada Inc., 2017 FC 826 (Seedlings), at para. 28.

63 Seedlings, at para. 25.

64 2017 FC 826, at para. 23. A similar perspective was articulated in the court of first instance in the Bluberi case, which was ultimately upheld by the Supreme Court: '[c]onsidering the litigation at issue here is similar in nature to an oppression dispute, Callidus should not know how much money Bentham is investing, what its percentage of return is or how any recovery would be apportioned (see 2018 QCCS 1040, 16 March 2018, at para. 85).

65 Seedlings Life Science Ventures, LLC v. Pfizer Canada Inc., 2017, T-608-17 Order, at pp. 3–4.

66 Dugal v. Manulife Financial Corp., 2011 ONSC 1785 (Ont. S.C.J.), at para. 35.

67 David v. Loblaw, 2018 ONSC 6469.

68 ibid.

69 CPA, at s. 33.1(11) and (12).

70 2021 ONSC 4968.

71 International Commercial Arbitration Act, RSBC 1996, c. 233, at s. 36(3). Subsection 36(1)(b)(ii) states that: '[r]ecognition or enforcement of an arbitral award, irrespective of the state in which it was made, may be refused only . . . if the court finds that . . . the recognition or enforcement of the arbitral award would be contrary to the public policy in British Columbia.'

72 CPA, s. 33.1.

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