Bayens v. Kinross Gold Corporation
British funder to give costs indemnity up to $1M before certification, and $5M after certification.
Recovery of 7.5% if recovery before certification, 10% after certification (after fees and disbursements).
Plaintiffs not prepared to proceed without a contingency fee agreement and protection from a costs award. Counsel would not indemnify for costs, and Class Proceedings Fund turned them down.
Defendants did not oppose as long as funder posted security for costs.
Need for indemnity arose because of Ontario’s decision not to adopt a no-costs regime: “against the recommendation of the Commission. . . the Legislature rejected a no-costs regime for Ontario.” (para. 23). Instead created the Class Proceedings Fund.
“Indeed, it became the conventional wisdom that Class Counsel, who have far more to gain from a class action than the individual class members or the representative plaintiff, would be negligent or unethical if they allowed their client, the representative plaintiff, to assume a potentially catastrophic financial risk.” (para. 30)
“The new alternative is funding from a third party funder, and the current state of affairs in that courts in Ontario have come to accept and have approved the use of third party funders. Third party funding of class proceedings is permitted in Ontario as an appropriate manner of allowing plaintiffs and class counsel to mitigate the substantial litigation risks in class proceedings.” (para. 34)
Court approved agreement and set out number of principles governing LFAs. Court did not specify if they were intended to apply outside class action proceeding.
In June 2015, Justice Perell approved a settlement agreement.