Specific clauses of agreement which were overly broad and intrusive were to be deleted and replaced

Ontario civil | Civil Practice and Procedure | Class and representative proceedings | Representative or class proceedings under class proceedings legislation

Representative plaintiffs in proposed class action sought to sue defendants for damages due to alleged negligent design and manufacture of cardiac defibrillator devices. Litigation funding agreement among plaintiffs, their lawyers and proposed third party funder was approved by judge, subject to conditions. Recovery of 10 per cent was pre-approved and determination of quantum of further compensation was to be reserved until end of case. Specific clauses of agreement which were overly broad and intrusive were to be deleted and replaced. Plaintiffs appealed. Appeal dismissed. Judge applied proper principles and provided roadmap to parties if they wished to proceed under proposed arrangement. Judge’s analysis disclosed no error in principle and decision that he reached was not clearly wrong. It was not error for judge to have found that assessing fairness and reasonableness of full compensation to be paid to third-party lender could only take place once outcome was known. By removing clauses that allowed third party funder to withdraw funding on its own re-assessment of risk and adding court approval process, judge was satisfied that funder would be protected from risks and administration of justice would be protected from champertous fear of officious meddling. Question of whether necessity element was paramount or should be relaxed would have to await case in which issue factored directly into outcome.

Houle v. St. Jude Medical Inc. (2018), 2018 CarswellOnt 17713, 2018 ONSC 6352, Sachs J., Mullins J., and F.L. Myers J. (Ont. Div. Ct.); affirmed (2017), 2017 CarswellOnt 13215, 2017 ONSC 5129, Perell J. (Ont. S.C.J.).

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