Report to Convocation November 23, 2006 Access to Justice Committee
Committee Members Marion Boyd, Co-Chair Judith Potter, Co-Chair Andrea Alexander Paul Dray Tracey O’Donnell
Purposes of Report: For Information
Prepared by the Policy Secretariat Julia Bass 416 947 5228 and Allyson O’Shea 416 947 3458
COMMITTEE PROCESS 1. The Committee met on October 26th, 2006. Members in attendance were Marion Boyd and Judith Potter (Co-Chairs), Andrea Alexander, Paul Dray and Tracey O’Donnell. Staff in attendance were Julia Bass and Allyson O’Shea.
FOR INFORMATION
LITIGATION FINANCING 2. In November 2005, the Emerging Issues Committee considered the issue of the arrival in Canada of the concept of ‘Litigation Financing’. The background information prepared for the Emerging Issues Committee is attached at Appendix 1. The issue was referred to a working group of Emerging Issues and Access to Justice, which recommended that developments be monitored by the Access to Justice Committee.
3.
The term ‘Litigation Financing’ refers to an arrangement whereby a private company agrees to provide a plaintiff with the necessary funds to engage in a lawsuit or to cover personal expenses during the course of a lawsuit, that the plaintiff might not otherwise be able to afford. Unlike a typical loan agreement, the requirement to repay the advance is contingent upon success in the litigation. However, in addition to repayment of the advance, the plaintiff who receives litigation financing must also assign a portion of the proceeds of the lawsuit to the company, in the event the lawsuit is successful.
4.
Litigation financing is well established in the United States, and it appears that there has been some interest in expansion into the Canadian marketplace. In the September 30, 2005 issue of the Ontario Reports, an advertisement appeared for a New York-based company called LawMax Legal Finance, which offers litigation financing. Although LawMax Legal Finance has not advertised in the
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Ontario Reports since that time, the company’s website currently claims they offer “non-recourse advances against pending cases to individuals and corporations in the United States and Canada.”
5.
The Access to Justice Committee considered that there are potential concerns with the concept of litigation financing as it has developed in the US, including: a. The financing is always described as a “non-recourse cash advance” rather than a loan, because if considered as a loan there would be in effect a very high rate of interest that would probably violate consumer protection antiusury laws. This has been characterised by American commentators as “Predatory Lending”; b. The fact that the service has been advertised in the Ontario Reports may lend it legitimacy; c. The interest of such service providers in the Canadian market suggests a continuing problem of affordability for some plaintiffs in the civil justice system.
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The Access to Justice Committee is of the view that the Law Society should continue to monitor developments in this area, as it may become appropriate to recommend a regulatory response.
JUSTICE COULTER OSBORNE: CIVIL JUSTICE REVIEW
7.
Justice Coulter Osborne has been appointed by the Ontario Attorney General to lead a review of the civil justice system in Ontario and to recommend actions to make the civil justice system more accessible and affordable. The Terms of Reference of the project are attached at Appendix 2.
8.
Justice Osborne has been asked to deliver his report by late spring 2007. The Access to Justice Committee recommends that Justice Osborne be invited to meet
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with the members of Convocation to permit them to raise any issues they believe that Justice Osborne should consider.
‘INTO THE FUTURE’ CONFERENCE ON CIVIL JUSTICE 9. The Canadian Forum on Civil Justice (CFCJ) is continuing with the ‘Into the Future’ programme, holding a smaller invitation-only event in Toronto on December 7th and 8th, following on the larger conference that took place in Montreal on May 1st and 2nd. The Law Society is a sponsor of the December event, which will take place at the Ontario Bar Association. The Law Society will be represented by the Treasurer, the CEO and a staff member. Papers from the conference will be posted on the website of the CFCJ.
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