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March 4, 2019

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LAW TIMES 4 COVERING ONTARIO'S LEGAL SCENE | MARCH 4, 2019 www.lawtimesnews.com BY AIDAN MACNAB Law Times THE approval of a third-party funder for a class action brought by Tim Hortons franchisees against their franchisor is a win for the plaintiffs' side class action bar and part of the increased ac- ceptance of third-party funding in Canada, say lawyers. JB & M Walker Ltd v. TDL Group, where the court ap- proved third-party litigation funding, will give class action plaintiffs more choice of repre- sentation, says Andrew Winton, a partner at Lax O'Sullivan Lisus Gottlieb LLP. "It makes class action more ac- ceptable to not just well-funded firms but to other firms who would otherwise be willing to take on class action cases but are concerned about the contingen- cies," says Winton, whose firm often acts on a contingency fee basis and in class actions and act- ed last year for litigation funder Bentham IMF in an approval for a third-party funding motion in the Loblaws bread price-fixing case David v. Loblaw. "It opens the door for more creative arrangements in order to enable clients to attain the council they want," says Naomi Loewith, investment manager and legal counsel at Bentham IMF. While contingency fees allow lawyers to take on clients without money, Loewith says, the lawyer still has to work with- out fees in the interim. With first contingency fees and then the law society's class proceeding fund, which will pay for disbursements and costs, Loewith says litigation funding is the next step in the evolution of financing class actions. JB & M Walker Ltd v. TDL Group involved the alleged mis- use of advertising funds by TDL Group, which franchisees pay into as part of their franchise agreement. To fund the litiga- tion, the Tim Hortons franchi- sees entered a deal with Galactic TH Litigation Funders LC and it was approved on Feb. 11 by Superior Court Justice Edward Morgan. Loewith says that, un- like commercial litigation, for example, class actions and insol- vency cases, because the court has a supervisory role to protect the interests of the parties not appearing in court — such as the class members — the third-party funding needs to be approved by the court. In his decision, Morgan wrote that according to the Class Proceedings Act and as per the test laid out in Houle v. St. Jude Medical Inc., a third-party funder needs court approval, and to be approved the agree- ment cannot be "champertous or illegal and it must be a fair and reasonable agreement that facilitates access to justice while protecting the interests of the defendants." The collection of franchisees suing their company had been bankrolled by the Great White North Franchisee Association, but the alliance of Tim Hortons franchisees was no longer able to fund the litigation as of last summer and the plaintiffs could not afford it on their own. In similar cases, lawyers may wait to be paid until the case con- cludes and the class proceedings fund handles the disbursements and costs, but that arrangement was not sufficient here because plaintiff 's counsel could not work under those conditions. Galactic TH Litigation Funders LC, a New York City- based company, was required to agree to attorn to the court's jurisdiction, respect confiden- tiality of all communication related to the case and abide by the undertaking rule, and, un- der their agreement, there can be no termination of the fund- ing arrangement without court approval. Under the agreement, Galactic promised to post se- curity if necessary, pay for any costs award made against the plaintiff and respect the deemed undertaking rule from the Rules of Civil Procedure. This means documents or other evidence they are made aware of through their involve- ment in the proceedings cannot be used outside of the proceed- ings. The motion also included an affidavit from chairman and CEO of Galactic, Frederick Schulman, showing the compa- ny had assets of $33 million and net equity of $29 million, satisfy- ing Morgan of its ability to meet its obligations. The plaintiffs will pay Galac- tic between 22 and 26 per cent of the settlement or award, which, along with the lawyer fees, would still be well below a "typi- cal 33-per-cent-plus contin- gency fee arrangement," which Morgan said satisfied him that the funder was not being over- compensated. Jennifer Dolman, a partner at Osler Hoskin & Harcourt LLP in Toronto, is counsel for the de- fendant TDL Group Corp. and declined a request for comment. Richard Quance of Hime- lfarb Proszanski is acting for the plaintiffs and could not be reached for comment. LT Andrew Winton says a recent Ontario Superior Court of Justice decision will give class action plaintiffs more choice of representation. Door opened for 'more creative arrangements' Third-party funder a go NEWS The Canadian Lawyer InHouse Innovatio Awards is the pre-eminent award program recognizing innovation by members of the in-house bar within the Canadian legal market. These awards celebrate in-house counsel, both individuals and teams, who show leadership by becoming more efficient, innovative and creative in meeting the needs of their organizations. The Innovatio awards program draws on a panel of in-house counsel judges to determine the winners, based on a range of criteria. NOMINATIONS NOW OPEN NOMINATE AN INDIVIDUAL OR TEAM IN THE FOLLOWING CATEGORIES: • Law department leadership • Law department management • Legal operations • Diversity • Best practices in compliance systems • In-house M&A/Dealmakers • Working with external counsel • Litigation management • Risk management • Tomorrow's leader in innovation Accepting nominations from large, small and public sector/non-profit legal departments. NOMINATIONS CLOSE MARCH 29, 2019 For more information or to nominate visit www.innovatio-awards.com Questions? Contact Jennifer Brown | jen.brown@tr.com SIGNATURE SPONSOR BRONZE SPONSOR BRONZE SPONSOR THE E B O L G AND MAIL MEDIA PARTNER GOLD SPONSOR PLATINUM SPONSOR COCKTAIL SPONSOR SILVER SPONSOR Untitled-16 1 2019-02-26 4:19 PM Outgoing benchers share advice for new group AS the Law Society of On- tario 2019 bencher election approaches, outgoing vet- eran benchers Avvy Go and Raj Anand ref lected on their time as benchers in exclusive interviews with Law Times. Both say incoming bench- ers must understand the role takes time away from their legal practice and mentor- ship is recommended to bet- ter understand and grow in the bencher role. "[Being a bencher] is a daunting task because there's so much history — hundreds of years — and because it is so imbued with history and the hallowed halls of Osgoode and so on, that it can be quite intimi- dating," says Anand, a part- ner at WeirFoulds LLP. "I think it's important that new benchers and can- didates for bencher don't hesitate to pick up the phone or send an email or text to a bencher and say, 'What can you tell me about this?'" Go has been a bencher for 14 years and Anand has been one for 12 years. Anand says seasoned benchers should provide guidance to new benchers, which eases growing pains as people settle into the role. Go, clinic director of the Metro Toronto Chinese & Southeast Asian Legal Clin- ic, says new benchers should try to learn as much as they can by networking. "Try to learn as much as you can by getting involved in different committees. It's also very important to build a positive relation- ship with other benchers," she says. Go and Anand say that, under their respective ten- ure as benchers, pivotal changes in the Ontario legal profession were achieved, such as the unveiling of the Challenges Faced by Ra- cialized Licensees report in 2016, the Statement of Prin- ciples and governance and tribunal reforms, for exam- ple, which were important undertakings. Both also say there are more challenges facing the Ontario legal landscape they wished they could've tackled or completed before their time as benchers ex- pired. For more on the story, visit www.LawTimesNews. com/videos. LT — By Alexia Kapralos

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