Ontario Court Refuses To Approve New Litigation Funding Model For Class Actions

The Ontario Superior Court of Justice has added to its growing collection of cases that increase court scrutiny over litigation funding and contingency fee arrangements. In Houle v St Jude Medical Inc, 2017 ONSC 5129 [Houle] the plaintiffs proposed a new model for funding agreements. The Court refused to approve the agreement because, in its view, the fee structure was unfair.

Background

Contingency fees and third-party litigation funding agreements are relatively new to the Ontario civil litigation system. Legislative changes, recent case law and the overarching goal of increasing access to justice have opened the door to these arrangements, particularly in the class action context.