Third Part y Funding for Class Actions: Problems and Solutions

• Author: Anu Koshal
• Pages: 223-242

223

THIrd ParTY fundInG for

Class aCTIons: ProbleMs and

soluTIons

Anu Kosha l

Abstract: This paper examines the rise of private third party

funding for class act ions in Ontario. It makes t hree contri-

butions to the existing literature. First, it argues that the

decisions in Dugal and Metzler, as well as academic commen-

tary on this issue, do not adequately appreciate the potential

Conf‌licts of interest associated with private third party f und-

ing. These conf‌licts may be so subtle as to go undetected by

judges, but they nevertheless threaten to interfere with class

counsel’s relationship with t he class and erode public con-

f‌idence in Ontario’s class actions regime. Second, it argues

that Ontar io can reap the benef‌its of private third pa rty fund-

ing — namely, increased access to justice — while mini-

mizing the se conf‌licts by reforming t he Class Proceedings

Fund (CPF). Reforming the CPF to make it competitive with

private investors would reduce demand for the latter. This,

in turn, would minimize the consequences of private third

party funding while offering the same benef‌its. Finally, this

paper suggests concrete reform s that would make the CPF

more competitive with private th ird party funding.

CCAR 8-2.indb 223 4/25/2013 3:10:35 PM

CCAR 8-2.indb 224 4/25/2013 3:10:35 PM