Schneider v. Royal Crown Gold Reserve Inc.
The representative plaintiff in a class action sought approval of a third-party funding agreement on an ex parte basis. Chief Justice Popescul first noted that because in May 2015, Saskatchewan changed from a "no costs regime", to a "costs regime" for
class actions, third-party funding agreements "are often a necessity" to enable class actions to advance (para. 5).
As there were no Saskatchewan precedents on point, Justice Popescul reviewed the law from other provinces. He found that it was appropriate to proceed on an ex parte basis, as "the existence of the LFA has no bearing, substantively or procedurally on the defendants or the third parties. From whose pocket an adverse cost award is paid is of no consequence to the defendants and the third parties" (para. 11).
Justice Popescul reviewed the criteria set out in Hayes v Saint John, and held that the agreement satisfied those conditions. He therefore approved the funding agreement. In addition, Justice Popescul ordered that the defendants be notified that an agreement had been approved, but held that the agreement would be subject to a confidentiality order.
"The LFA, and the terms contained therein, if not subject to a Confidentiality Order would result in the disclosure of confidential and sensitive information that relate to the legal services and advice given by counsel and form a part of the plaintiff’s litigation strategy. The LFA contains insight into the strategic consideration inherent in the representative plaintiff’s strategy in these proceedings. It contains precise limits of disbursement funding and adverse cost award protection offered by the funder, the funder’s implied valuation of the claim for the purposes of setting the funding rate, and the termination provisions governing the availability of funding. Knowledge of this information on the part of the defendants or third parties would allow them to gain an unfair glimpse into the litigation psyche of the plaintiff, which is neither desirable nor fair." (para. 10).