Third Part y Funding for Class Actions: Problems and Solutions

AuthorAnu Koshal
THIrd ParTY fundInG for
Class aCTIons: ProbleMs and
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

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