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Dugal v. Manulife Financial Corp.
Irish funder would indemnify against costs and pay $50,000 towards disbursements, in exchange for 7% of recovery (after deduction of fees and expenses).
$5M cap before filing pre-trial brief and $10M afterwards.
Court held it had jurisdiction to assess at this stage: Under circumstances, "[t]o postpone the decision to post-certification, when the views of class members can be sought, could very well spell the end of this proceeding, because the plaintiffs cannot
withstand an adverse costs award on certification" (para. 17).
"The grim reality is that no person in their right mind would accept the role of representative plaintiff if he or she were at risk of losing everything they own. No one, no matter how altruistic, would risk such a loss over a modest claim. Indeed, no
rational person would risk an adverse costs award of several million dollars to recover several thousand dollars or even several tens of thousand dollars" (para. 28).
Goal of access to justice "would be illusory if access to justice were deterred by the prospect of a crushing costs award to be borne by the representative plaintiff or counsel . . . third-party indemnity agreements can avoid the unfortunate result that
individuals with potentially meritorious claims cannot bring them because they are unable to withstand the risk of loss" (para. 33).
7% is reasonable and consistent with 10% that Fund would collect; caps are reasonable and fair reflection of funder's risk.
Before approving, CFI had to post security for costs, and parties to agree on guidelines for providing information to funder.