Litigation Funding In Canadian Insolvencies: A New Tool In The Toolbox?

The high (and rising) cost of complex commercial litigation proceedings remains one of the defining features of litigation in Ontario, and across Canada more broadly. In deciding whether to litigate a claim, lawyers and their clients must assess not only a claim's substantive merits, but also whether it is economically viable to pursue. More and more, it is the economic cost of pursuing a claim—irrespective of its substantive merits—that increasingly dictates if and how that claim will be litigated. This has profound implications for the legal system: legal rights are illusory and no more than a source of frustration if they cannot be recognized and enforced.

Where the would-be claimant is an insolvent company, that concern is necessarily escalated and it often means that debtors and those appointed to administer their estates do not always maximize the value realizable from all potential claims. Although in-progress litigation and claims arising out of insolvency