Drynan v. Bausch Health Companies Inc.,
The funder agreed to pay disbursements, adverse costs awards and 80% of Class Counsel’s legal fees on an hourly fee basis. If successful, the funder would receive reimbursement of the investment of legal fees, and also a percentage of the proceeds of the action. That is, it is distinct (a) from David v. Loblaws, where the funder received a percentage of the litigation proceeds and reimbursement of its investment, but that investment was only disbursements; and (b) from Walker v. TDL, where the funder paid legal fees as the case progressed, but its return was only a percentage of the litigation proceeds, not reimbursement for the fees it paid.
The Court approved the funding agreement after a series of suggested amendments were made, finding that it was fair and reasonable to the Class and did not overcompensate either the funder or Class Counsel. In addition to receiving 80% of the fees as the matter progresses, Class Counsel can seek court approval of a “top up” for fees, but it would only request an amount that would result in a maximum paid by the class for legal fees (including the portion paid to the funder) of 33.3% of the Proceeds.
The Court rejected the argument that there was a risk of overcompensation to the funder. It held that there where repayment of the fees and 25% of the proceeds was limited to 33.3% of the Proceeds, the recovery was consistent with the presumptive validity case law, while still allowing for disbursements to be paid from the proceeds, just as occurs with funding from the Class Proceedings Fund.