CANADA Law and Practice Contributed by: Craig Ferris KC, Marko Vesely, Shannon Hayes and Codie Chisholm, Lawson Lundell LLP
Obligations of confidentiality may also be imposed on the funders in these two circum- stances. 2.2 Third-Party Funding: Lawsuits Third-party funding is available for all types of commercial litigation and arbitration. 2.3 Third-Party Funding for Plaintiff and Defendant Third-party funding is largely a matter of con- tract law in Canada. Currently, there is no legal rule preventing a defendant from obtaining third- party funding. However, plaintiffs may have more options as to funding arrangements as the third- party funder’s return is typically driven by a suc- cessful damages award. 2.4 Minimum and Maximum Amounts of Third-Party Funding For general commercial matters, there is no max- imum or minimum amount. If court approval of the funding agreement is required, in assessing the fairness and reasonableness of the bargain in the class action context, the court’s decision may be informed by the caps imposed for lawyer contingency fee arrangements. 2.5 Types of Costs Considered Under Third-Party Funding Funding may be provided to pay for disburse- ments and expenses, all or a portion of legal fees, adverse cost awards and security for costs. 2.6 Contingency Fees The rules of procedure and rules of the law socie- ty in each province govern contingency arrange- ments between clients and their lawyers. The content of the agreements may be regulated, including the termination rights, and the lawyer may be required to provide the client with cer- tain information regarding contingency arrange-
ments. Some jurisdictions in Canada impose caps on the contingency percentage, restrict the claims for which contingency arrangements may be permitted, or require court approval of the agreement. 2.7 Time Limit for Obtaining Third-Party Funding As this area is largely unregulated, there are no time limits for when the funding must be in place. There are some optional legal steps that can be taken before an action is commenced. It is common practice to send a demand letter to the opposing side regarding a possible claim and allow time for response or negotiation. However, there is no legal obligation to do so or conse- quences imposed by the court for failing to do so, unless the particular cause of action requires Most common law jurisdictions in Canada have a shorter basic limitation period that applies to most actions, which is largely dependent on when the plaintiff discovered (or ought to have discovered) certain facts regarding the claim that suggest that litigation ought to be pursued. These jurisdictions also have a longer ultimate limitation period that typically runs from the date of the act or omission giving rise to the claim. A few common law jurisdictions in Canada have different limitation periods based on the type of cause of action. All statutory regimes have rules regarding when limitation periods will be extended or suspended. 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct some form of prior demand. 3.2 Statutes of Limitations
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