CANADA Law and Practice Contributed by: Sylvie Rodrigue, Grant Worden, Nicole Mantini and Anne Merminod, Torys LLP
rule. However, the exact amount and nature of costs awarded can vary significantly depending on the cir - cumstances of the case, the conduct of the parties, and the jurisdiction in which the claim is brought. Party-and-party costs (partial indemnity) are the most usual form of cost award. They represent a portion of the successful party’s legal fees, typically ranging from 40% to 60%, and full indemnification for cer - tain allowed disbursements. Solicitor-and-client costs (substantial indemnity) are awarded in rare or excep - tional circumstances, such as where there has been misconduct, bad faith, or abuse of process. These provide a higher level of indemnity (often 80% or more of actual legal fees, plus full indemnity for allowed disbursements). Many product-liability claims in Canada are advanced as class actions, where different rules may apply depending on the jurisdiction in which the class action was commenced. For example, in British Columbia and Quebec, the general rule is that each party bears its own costs at the certification/authorisation stage of a class action, regardless of the outcome. After that stage, the ordinary “loser pays” rules of cost alloca - tion apply. Other Canadian provinces follow the “loser pays” approach to costs both before and after certi - fication. In every circumstance, the courts retain significant discretion in awarding costs and may consider, among other things, the public interest dimension of the case, the conduct of the parties, and any elements of abuse or bad faith. 2.15 Available Funding in Product Liability Claims Plaintiffs’ counsel often take on product liability claims on a contingency basis. Under a contingency fee agreement, plaintiffs pay legal fees to their counsel ‒ typically a percentage of the amount recovered ‒ only if the claim is successful. Ontario, British Columbia, and Quebec each have pro - vincial Class Proceedings Funds which can provide financial assistance for disbursements and indemnify representative class action plaintiffs against adverse cost awards. These funds are typically financed through levies recovered from successful class
actions and operate under strict guidelines to ensure responsible use. Managed independently ‒ often by boards or public bodies distinct from the government ‒ these funds assess applications to determine whether a proposed class action meets the criteria for financial support, and also consider the merits of the claim, the public interest involved, and the likelihood of the class action advancing access to justice. Third-party litigation funding is also available in Can - ada. Typically, an entity unconnected to a lawsuit will provide financial resources to a plaintiff to pursue legal action in exchange for a portion of the proceeds if the case succeeds. Unlike most Canadian jurisdictions, the Superior Court of Québec has recently declined to preapprove a litigation funding agreement (unless limited to costs that have been incurred or are fore - seeable), ruling that such agreements could only be approved at the end of the litigation, contemporane - ously with the approval of class counsel fees. 2.16 Existence of Class Actions, Representative Proceedings or Co-Ordinated Proceedings in Product Liability Claims Where many product liability claims are advanced in respect of the same product, these will typically pro - ceed as class actions, though some plaintiffs’ counsel also use informal “mass tort” proceedings to advance their clients’ claims. Canada does not have any mechanism to co-ordinate or manage large numbers of individual claims at the federal or provincial levels that is similar to the US Multi-District Litigation (MDL) system. As a result, class actions are the preferred vehicle for aggregating product liability claims, and a relatively low certifica - tion or authorisation threshold ‒ including in relation to personal injury claims ‒ facilitates this. As discussed in 2.4 Jurisdictional Requirements for Product Liability Claims , Canada’s Federal Court is a statutory court of limited jurisdiction. It does not have jurisdiction over tort or contract claims unless such claims arise within the scope of its existing juris - diction. As a result, “national” product liability class actions are commenced in provincial courts, which often results in the commencement of overlapping and sometimes competing claims. To streamline the
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