An appeal from a costs order against Legal Aid Ontario (LAO) as a non-party funder in a family law dispute.
The application judge found that LAO engaged in an abuse of process by failing to adequately monitor and assess the merits of the defence it was funding in a case involving a vulnerable individual.
The Court of Appeal allowed the appeal and set aside the costs award, holding that LAO's role as a statutory funder does not expose it to non-party costs awards absent evidence of bad faith or improper purpose, and that requiring LAO to monitor litigation would impermissibly invade solicitor-client privilege and frustrate the statutory legal aid scheme.
