Court File and Parties

COURT FILE NO.: CV-19-00620048-00CP DATE: 20230811

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: DARRYL GEBIEN Plaintiff - and - APOTEX INC., APOTEX PHARMACEUTICAL HOLDINGS, INC., BRISTOL-MYERS SQUIBB CANADA, BRISTOL-MYERS SQUIBB COMPANY, PALADIN LABS, ENDO PHARMACEUTICALS INC., ENDO INTERNATIONAL PLC, JANSSEN INC., JOHNSON & JOHNSON, PHARMASCIENCE INC., JODDES LIMITED, PRO DOC LIMITEE, THE JEAN COUTU GROUP (PJC) INC., MYLAN PHARMACEUTICALS ULC, MYLAN N.V., PURDUE PHARMA INC., PURDUE PHARMA L.P., THE PURDUE FREDERICK COMPANY INC., PURDUE FREDERICK INC., RANBAXY PHARMACEUTICALS CANADA INC., SUN PHARMACEUTICAL INDUSTRIES LTD., HIKMA LABS INC., HIKMA PHARMACEUTICALS PLC, WEST-WARD COLUMBUS INC., SANIS HEALTH INC., SANDOZ CANADA INC., SANDOZ INTERNATIONAL GMBH, TEVA CANADA LIMITED, TEVA PHARMACEUTICALS USA, INC., TEVA PHARMACEUTICAL INDUSTRIES LTD., ACTAVIS PHARMA COMPANY, VALEANT CANADA LP/ VALEANT CANADA S.E.C, BAUSCH HEALTH COMPANIES INC., AMERISOURCEBERGEN CANADA CORPORATION, KOHL + FRISCH DISTRIBUTION INC., NU-QUEST DISTRIBUTION INC., ABBOTT LABORATORIES, LIMITED; and PROCURITY INC. Defendants

Proceeding under the Class Proceedings Act, 1992

Counsel: Kirk M. Baert, Adam Tanel, Vlad Calina, Alec Angle, and Caitlin Leach for the Plaintiff Laura Fric, Robert Carson, and Graeme Rotrand for the Defendants, Pharmascience Inc., Ranbaxy Pharmaceuticals Canada Inc., and Teva Canada Limited H.B. Radomski, Nando De Luca, and Melanie Ouanounou for the Defendants, Apotex Inc. and Apotex Pharmaceutical Holdings, Inc. Timothy Farrell and Anna Iourina for the Defendants, Amerisourcebergen Canada Corporation and Kohl & Frish Distribution Inc., Procurity Inc. David T. Neave and Rebecca von Rüti for the Defendants, Bristol-Myers Squibb Canada and Bristol-Myers Squibb Company Caroline Zayid, Byron Shaw and Eric S. Block for the Defendant, Abbott Laboratories Limited Gordon McKee and Jill Lawrie for the Defendants, Janssen Inc. and Johnson & Johnson Scott Maidment, Jennifer Dent, and Samantha Gordon for the Defendant, Mylan Pharmaceuticals ULC Fadi Amine and Kelsey Sherriff for the Defendant, Pro Doc Limitee Geoffrey B. Shaw and Derek Ronde for the Defendant The Jean Coutu Group (PJC) Inc. Robert J. McDonell for the Defendants, Hikma Labs Inc. Hikma Pharmaceuticals PLC and West-Ward Columbus Inc. Peter J. Pliszka for the Defendants, Sandoz Canada Inc. and Sandoz International GMBH Deborah Glendinning and Karin Sachar for the Defendant, Sanis Health Inc.

HEARD: In writing

Contents

A. Introduction . 3 B. Factual Background . 5 C. Legal Background . 17 D. Discussion and Analysis . 21 (a) The Amendment Objection . 22 (b) The Assignment Objection . 22 (c) The Attornment Clause Objection . 23 (d) The Costs Enforcement Objection . 24 (e) The Termination Procedural Objection . 25 (f) The Termination Objection about Accrued Costs . 26 (g) The Post-Termination Confidentiality Objection . 26 (h) The Confidentiality Objection . 27 E. Conclusion . 29

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] Opioids are a group of drugs used to manage pain and include belladonna, buprenorphine, codeine, fentanyl, heroin, hydromorphone, methadone, morphine, opium, oxycontin, pentazocine, and tramadol. The world suffers from an opioid crisis from the legal and the illegal use of opioid drugs. In this proposed colossal class action, the Plaintiff, Dr. Darryl Gebien sues seventeen groups of pharmaceutical companies that manufacture and distribute opioid drugs in Canada. His claim for compensation exceeds $1.2 billion.

[2] On this motion pursuant to the Class Proceedings Act, 1992, Dr. Gebien and Koskie Minsky LLP, which is his proposed Class Counsel, seek court approval of a Third-Party Funding Agreement for his proposed class action against the pharmaceutical companies.

[3] Dr. Gebien’s motion raises the issue of what rights, if any, do defendants, third-party beneficiaries of a Third-Party Funding Agreement, have on the motion for approval of the Agreement pursuant to s. 33.1 of the Class Proceedings Act, 1992.

[4] In this colossal class action, a few Defendants take no position to Dr. Gebien’s and Koskie Minsky LLP’s request for approval of the Third-Party Funding Agreement.

[5] However, another group of Defendants, while they do not oppose third-party litigation funding in principle, they do object to certain provisions of the Third-Party Funding Agreement, and these Defendants have submitted: (a) revisions to the Agreement; and (b) proposed terms to be added to the court Order approving the Agreement, assuming it is approved.

[6] Dr. Gebien’s and Proposed Class Counsel’s response to these suggestions from Opposing Counsel is the legal equivalent of “butt out” “take a hike” or “buzz off”. Proposed Class Counsel’s basic submission is that the Third-Party Funding Agreement satisfies the criteria established by s.33.1 of the Class Proceedings Act, 1992 and the court must approve the Agreement. To quote paragraphs 3-6 of Dr. Gebien’s Reply Factum, he submits:

3. The Defendants overstep their role on this motion. While entitled to make submissions on this motion, their participation is limited to ensuring their legitimate interests – primarily regarding adverse costs – are protected. They are not entitled – as they attempt here – to redraft an Agreement that meets the requirement for approval. Nor are they entitled to insist on entitlements that go beyond those provided in s. 33.1. And they are not entitled to demand that the Agreement, in its drafting, mirror funding agreements approved in past cases.

4. In Ontario, the test for funding approval has been codified based on the common law test. The requirements for funding approval are clear. Despite this, the Defendants attempt to impose additional requirements and stipulations, anchoring their opposition to the Agreement in a casual comparison to past cases – particularly cases from jurisdictions without a statutory test like s. 33.1, or cases where defendants' revisions were accepted on consent motions.

5. The approval of funding agreements with terms that exceed the s. 33.1 requirements, with the consent of the moving parties on unopposed motions, cannot raise the bar for approval, which has been set by statute. Comparisons to past cases are helpful only insofar as they show how a particular form of agreement may satisfy s. 33.1 (or Houle v. St. Jude Medical Inc., 2017 ONSC 5129, which s. 33.1 codified). Courts have approved substantially identical agreements to the one at issue on this motion, including – most recently – this Court in Wasylyk v. Lyft Inc., 2023 ONSC 3597.

6. None of the Defendants' complaints are justified, and none of their revisions should be required to approve the Agreement: they reflect a misunderstanding of the Agreement, the case law, and the Defendants' role on a litigation funding approval motion. The Agreement, as drafted, satisfies all procedural and substantive requirements stipulated in Houle and s.33.1. The Agreement should be approved.

[7] Proposed Class Counsel’s “butt out” argument is wrong because:

a. The Defendants have not overstepped their role. A defendant’s primary interest on a third-party funding agreement motion is to be protected from champerty and maintenance. Protecting the availability of funds for a costs award favourable to a defendant and protecting a defendant’s privacy and confidentiality are aspects of protecting the administration of justice from champerty and maintenance.

b. Section 33.1 of the Class Proceedings Act, 1992 codifies the procedure and partially codifies the common law’s approach to third-party funding agreements. Notwithstanding Putative Class Counsel’s submissions, s. 33.1 does not displace the common law test with an exclusive statutory test. And even if s. 33.1 did establish an exclusive statutory test, the statutory test reincorporates the common law’s discretionary case-specific test into the statutory test.

c. The notions that s. 33.1 of the Class Proceedings Act, 1992 raises the bar and makes comparisons to past cases unhelpful are non sequiturs. There is no bar being raised, and each application for approval of a third-party funding agreement must be analyzed in accordance with its particular circumstances.

d. The fact that substantially identical agreements to the immediate agreement have been approved in other cases begs the question of whether the proposed Third-Party Funding Agreement in the immediate case is fair and reasonable having regard to the exigencies of the immediate case.

e. While it is true that the Defendants are not entitled to insist on changes to the Third-Party Funding Agreement, they are entitled to make objections to the approval of the agreement as it has been submitted, and the Defendants are entitled to suggest self-interested revisions that the court may consider in its discretion to approve, conditionally approve, or not approve a Third-Party Funding Agreement.

f. In the immediate case, some of the Defendants’ complaints are not justified or are petty nit-picking. However, some of the Defendants’ complaints are justified and substantial, and it is Proposed Class Counsel that misunderstands both s. 33.1 of the Class Proceedings Act, 1992 and also the relevance of the case law.

[8] In these circumstances, I am adjourning the motion for Third-Party Funding Agreement approval to provide Dr. Gebien and Putative Class Counsel an opportunity to resolve the genuinely meaningful objections that I shall identify below, the weightiest of which is the confidentiality and deemed undertaking provisions of the Agreement.

[9] None of the Defendants’ substantive objections appear to me to be insurmountable to resolve, but it is not for the Court or for the Defendants to broker, negotiate, or draft, an approvable Third-Party Funding Agreement for the parties to that Agreement. I, therefore, adjourn the motion for approval of the Third-Party Funding Agreement to a case management conference to be scheduled within twenty days. The purpose of the conference will be to set a timetable for the resumption of this hearing. If the parties to the Third-Party Funding Agreement are not disposed to submit a revised Agreement, then I shall dismiss the motion for approval at the case management conference.

B. Factual Background

[10] In March 2019, Dr. Gebien retained Koskie Minsky LLP to commence this proposed class action against the manufacturers of opioids. Dr. Gebien signed a contingency fee agreement under which he retains the right to make critical decisions about the conduct of the action. Under the retainer agreement, Dr. Gebien acknowledges his obligation to act in the best interests of the class.

[11] Dr. Gebien seeks to represent a class of all persons in Canada who were prescribed opioids manufactured, marketed, or distributed by the Defendants from January 1, 1996, to the present day, and who suffer or have suffered from Opioid Use Disorder. On behalf of the Class, Dr. Gebien pleads negligence, fraudulent misrepresentation and deceit, and breaches of the Competition Act.

[12] Dr. Gebien is a person of ordinary means, and he is unable to bear the humungous expenses and exposure to large adverse costs awards required to take this case to trial. While Koskie Minsky LLP is prepared to assume a portion of the risk, the law firm is not in a position to assume all the financial risks of Dr. Gebien’s proposed class action in addition to the risk it has assumed under its contingency fee retainer. Under the retainer agreement, Dr. Gebien authorized Koskie Minsky LLP to obtain funding from private Third-Party funders.

[13] For over two years, Koskie Minsky LLP pursued the matter of obtaining private Third-Party litigation funding. Finally, in 2022, after the law firm had lengthy negotiations, it obtained a funding proposal from Omni Bridgeway Ltd. It is Koskie Minsky LLP’s opinion that the terms of this Third-Party Funding Agreement are the best that can be achieved for Dr. Gebien and the putative Class Members.

[14] Thus, Dr. Gebien seeks an order approving a Third-Party Funding Agreement among: (a) himself, (b) Omni Bridgeway (Fund 5) Canada Investments Ltd. (the “Funding Entity”), and (c) Class counsel, Koskie Minsky LLP.

[15] The ultimate parent company of the Funding Entity is Omni Bridgeway Ltd. It is not a party to the Third-Party Funding Agreement, but it is to be a signatory to the Undertaking attached as Exhibit ‘C’ to the Agreement. Omni Bridgeway Ltd. is a sub-investment adviser to the Funding Entity.

[16] Omni Bridgeway Ltd. is a publicly listed company on the Australian Stock Exchange (ASX) and is an experienced litigation funder. It has 26 offices around the world, and it has provided funding in class actions and group claims in Europe, Australia, and Canada.

[17] Omni Bridgeway Ltd. opened its Canadian operations in January 2016 and has obtained court approval for its funding arrangements in two other class actions: David v. Loblaw, 2018 ONSC 6469, an Ontario action alleging a price-fixing conspiracy about packaged bread (funding approved in 2018) and Virani v. Uber, Court File: 2001-08472, ex parte Order of Justice Neufeld, November 20, 2022, an Alberta matter related to the employment classification of Uber drivers.

[18] According to the most recent half-year financial report filed with the ASX, on a consolidated basis as of December 31, 2022: (a) the estimated present value of Omni Bridgeway’s portfolio is AUD $27.2 billion ($24.5 billion (Cdn)); it has cash and cash equivalents of AUD $112.7 million ($101.4 million (Cdn)); and its net asset position was AUD $677.78 million ($609.9 million (Cdn)).

[19] The investment in this proceeding is being made through Omni Bridgeway’s Fund 5 (the “Funding Entity”), which was launched in June 2019. This fund has aggregated committed capital of USD $500 million, of which USD $100 million is from Omni Bridgeway Ltd. and USD $400 million is from external investors.

[20] Omni Bridgeway Ltd. provides sub-investment advisory services to the Funding Entity. Omni Bridgeway Capital (Canada) Limited is sub-contracted by Omni Bridgeway Ltd. to assist in providing sub-investment advisory services in Canada, including the sourcing, monitoring and administration of litigation finance investments.

[21] The Funding Entity benefits from an After-The-Event (ATE) insurance policy that will respond to claims above the indemnity limit for adverse costs orders exceeding the self-insured retention of USD $20 million. This policy is provided by insurers with a creditworthiness rating of “A-(excellent)”.

[22] On April 11, 2023, Dr. Gebien, Koskie Minsky LLP, and the Funding Entity signed the Third-Party Funding Agreement. The Agreement obligates the Funding Entity to provide Dr. Gebien with funding to pay for disbursements and to satisfy any adverse costs awards that may be made against him up to specified maximum amounts, which have been disclosed to the court but are otherwise confidential.

[23] Before signing the Agreement, Dr. Gebien received independent legal advice from Emily Assini of McKenzie Lake Lawyers LLP, an experienced class action lawyer.

[24] For present purposes, the following terms of the Third-Party Funding Agreement are pertinent:

LITIGATION FUNDING AGREEMENT

This Litigation Funding Agreement is dated as of April 11, 2023,

Among:

Omni Bridgeway (Fund 5) Canada Investments Ltd., […] (“Omni Bridgeway”);

• and -

Darryl Gebien, as proposed representative plaintiff on behalf of certain Class Members, or as Claimant, as the context requires, […] and any additional or substitute representative plaintiffs added to the Proceedings, (“Claimant”);

• and -

Koskie Minsky LLP, […] (the “Lawyers”).

NOW THEREFORE, in consideration of the mutual promises contained in this Agreement, the Parties agree:

KEY TERMS

1. ARTICLE 1 - DEFINITIONS

1.1 Capitalized terms used in this Agreement have the meanings ascribed to them in the General Terms and Conditions attached as Exhibit A or as otherwise defined in the remainder of this Agreement.

2. ARTICLE 2 - FUNDING COMMITMENT

2.1 Litigation Funding Amounts. Omni Bridgeway’s entire commitment to fund amounts pursuant to and in accordance with the terms and conditions of this Agreement is XXXXXX, Each amount funded by Omni Bridgeway hereunder is a “Litigation Funding Amount” and collectively such amounts are “Litigation Funding Amounts.” The Litigation Funding Amounts shall consist of any Disbursements funded by Omni Bridgeway of up to, but not exceeding XXXXXX, as specified in Section 2.2 of the Key Terms below and any Court-Ordered Costs funded by Omni Bridgeway up to, but not exceeding XXXXXX, as specified in Section 2.3 of the Key Terms below.

2.2 Disbursements. Omni Bridgeway agrees to pay up to XXXXXX of Disbursements in respect of the Proceedings from time to time, as invoices are received.

2.3 Court-Ordered Costs.

2.3.1 Responsibility for Court-Ordered Costs. It is acknowledged and agreed that, as the proposed representative plaintiff in the Proceedings, Claimant may be liable to the Defendants for any Court-Ordered Costs. Pursuant to the terms set out below, Omni Bridgeway agrees to pay up to XXXXXX in Court-Ordered Costs on behalf of Claimant. Any court-ordered costs in excess of XXXXXX will be the sole responsibility of Lawyers.

3. ARTICLE 3 – RETURNS AND PAYMENT WATERFALL

3.1 Omni Bridgeway Return. Subject to the order of priority detailed in Section 3.3 of these Key Terms, Omni Bridgeway shall receive from the Litigation Proceeds received from time to time a return, as follows (the “Omni Bridgeway Return”):

3.1.1 eleven percent (11 %) of any Litigation Proceeds (exclusive of any Court-awarded amounts attributable to disbursements) up to and including $100,000,000; plus

3.1.2 ten percent (10%) of any Litigation Proceeds (exclusive of any Court-awarded amounts attributable to disbursements) above $100,000,000 up to and including $200,000,000; plus

3.1.3 nine percent (9%) of any Litigation Proceeds (exclusive of any Court-awarded amounts attributable to disbursements) above $200,000,000.

3.2 Lawyers’ Return. Subject to the order of priority detailed in Section 3.3 of the Key Terms, Lawyers will receive, in exchange for handling the matter on a contingency fee basis, thirty percent (30%) of the Litigation Proceeds (exclusive of any Court-awarded amounts attributable to disbursements), or such other amount from the Litigation Proceeds equal to Lawyers’ Court approved contingency fee due and owing to Lawyers, pursuant to Court order (the “Lawyers’ Return”).

4. ARTICLE 4 – RETAINER, LAWYERS, AND PROCEEDINGS

4.1 Lawyers’ Retainer and Additional Lawyers. Lawyers have been retained by Claimant pursuant to the Retainer Agreement. Lawyers are to be instructed by, and owe their obligations to, Claimant. […]

5. ARTICLE 5 – COURT APPROVAL

Omni Bridgeway’s obligations hereunder are subject to and conditional upon the Court making a Litigation Funding Agreement Approval Order. […] Submission of the Agreement to the Court for approval is not and will not be a waiver of any applicable privilege insofar as this Agreement contains information regarding litigation strategy or budget, which parts shall be redacted when provided to the Defendants, but provided to the Court in an unredacted form, under seal.

7. ARTICLE 7 – AMENDMENTS TO PROCEEDINGS OR CHANGE IN LAWYERS

The Parties agree that the terms of this Agreement may need to be renegotiated if a material change occurs, including by way of example, if there is a material change or amendment to the Proceedings (including if an additional defendant is added or new causes of action are pleaded), or if additional lawyers are sought to be added as part of a consortium of lawyers prosecuting the Proceedings. However, should Lawyers retain other lawyers to provide specialized expertise and advice to them in respect of any issue in the proceeding, that shall not constitute a material change.

8. ARTICLE 8 – UNDERTAKING

As soon as practicable after the date hereof, Omni Bridgeway shall sign and shall procure that OBL sign an undertaking in the form set out in Exhibit C (the “Undertaking”) and deliver a copy of it to the Defendants and the Court. If the Court orders Claimant to provide any security for the costs of one or more Defendant, OBL and Omni Bridgeway will provide that security only in the form of the Undertaking.

9. ARTICLE 9 – ATTORNMENT

Omni Bridgeway attorns to the jurisdiction of the Court, and shall procure that OBL attorn to the jurisdiction of the Court, including with respect to the implied undertaking of confidentiality and agrees to comply with any protective orders made by the Court, and with respect to the Undertaking attached at Exhibit C. Omni Bridgeway and OBL shall each be deemed to be a party to the Proceedings for the purposes of Rules 30.1.01 and 57.01 of the Rules of Civil Procedure, R.S.O. 1990, Reg 194.

EXHIBIT A – GENERAL TERMS AND CONDITIONS

The following General Terms and Conditions form part of the Litigation Funding Agreement to which this Exhibit A is attached.

1. PART 1 - DEFINITIONS

Capitalized terms used in this Agreement have the meanings ascribed to them below or otherwise as specifically defined elsewhere in the Agreement.

“Administrative Expenses” All fees, disbursements, expenses, costs, taxes and other amounts incurred or payable relating to implementation and administration of a Final Resolution of the Proceedings, including the costs of publishing and delivering notices, the fees, disbursements, and taxes paid to the administrator, and any other associated expenses approved by the Court as being payable from the Litigation Proceeds.

“Affiliate” In relation to:

(i) Claimant and Lawyers, their Representatives, and any additional lawyers retained by Lawyers to assist in the prosecution of the Proceedings; and

(ii) Omni Bridgeway:

a. OBL;

b. any subsidiary company Controlled by OBL (“Subsidiary”);

c. an entity or trust Controlled or advised or managed, directly or indirectly, by Omni Bridgeway, OBL or a Subsidiary; or

d. the Representatives of Omni Bridgeway, OBL or any Subsidiary.

“Co-Funder” Means any person considering entering into (or who enters into) a co-funding, participation or similar arrangement with Omni Bridgeway in connection herewith, whether before or after the date of this Agreement.

“Confidential Information” Any information relating to any of the Agreement’s provisions or terms, the Claims or the Proceedings, including any discussions and negotiations related thereto, regardless of whether such information is:

(i) written or oral and irrespective of the form or storage medium; or

(ii) specifically identified as “Confidential” or which, by virtue of its nature, would be understood to be confidential by a reasonable Recipient.

Confidential Information includes analyses and summaries derived from other Confidential Information. Confidential Information does not include information that:

(i) was or becomes generally available to the public other than as a result of a disclosure by the Recipient in breach of the Agreement;

(ii) was actually known to the Recipient on a non-confidential basis prior to its disclosure;

(iii) is rightfully received by the Recipient from a Third-Party not in breach of any obligation of confidentiality to the Disclosing Party; or

(iv) was developed independently of any information derived from any Confidential Information.

“Court-Ordered Costs” Means any legal fees and disbursements (including any interest thereon) that the Court orders Claimant to pay to the Defendants, up to an aggregate of XXXXXX, provided that the applicable legal fees and disbursements were incurred by one or more of the Defendants after being served with the Statement of Claim and prior to any termination of this Agreement.

“Court-Ordered Costs Fee” A payment by Claimant to Omni Bridgeway of XXXXXX payable only from the Litigation Proceeds and otherwise non-recourse.

“Omni Bridgeway Permitted Person” Means any of the following persons:

(i) any Affiliate of Omni Bridgeway;

(ii) any Representative of an Affiliate of Omni Bridgeway;

(iii) any securityholder of an Affiliate of Omni Bridgeway (excluding OBL) and their Representatives;

(iv) any debt capital provider or proposed provider to OBL, Omni Bridgeway or an Affiliate of Omni Bridgeway together with their respective Representatives; and

(v) a Co-Funder or its Representatives who give an appropriate confidentiality undertaking.

“Project Costs’ Up to XXXXXX in external costs paid by Omni Bridgeway relating to its investment, which may include external counsel, expert fees, and other due diligence expenditures.

“Recipient” The Person that receives Confidential Information from a Party.

“Representatives” A director, officer, partner, member, employee, agent, auditor, insurer, prospective insurer, insurance broker, contractor, legal counsel, trustee, consultant, investor, third-party debtor, prospective third-party debtor, lender, financier and other professional adviser.

5. PART 5 – CONDUCT OF PROCEEDINGS AND SETTLEMENT

5.1 Conduct of Proceedings and Right to Settle. Subject to the provisions of this Part 5, Claimant will have the sole and exclusive right to direct the conduct of the Proceedings and to settle the Proceedings.

5.2 Communication of Settlement Offers. Lawyers will communicate to Omni Bridgeway the amount and terms of any Settlement offers within one (1) Business Day following receipt of the offer and advise Omni Bridgeway of all Settlement offers proposed to be made by Claimant.

6. PART 6 - CONFIDENTIALITY AND PROVISION OF DOCUMENTS

6.1 Implied Undertaking of Confidentiality. In accordance with Article 5, the Parties acknowledge that Omni Bridgeway will be subject to the implied undertaking of confidentiality imposed upon the parties to the Proceedings with respect to any documents or information about the Claims and the Proceedings and the parties to the Proceedings that Omni Bridgeway may receive as a result of its rights under the Agreement. Omni Bridgeway will be relieved of the implied undertaking of confidentiality in the same manner and at the same time as Claimant.

6.2 No Waiver of Privilege. In providing to Omni Bridgeway any documents or information about the Claims and the Proceedings, Claimant does not waive any privilege that may attach to such documents or information. For greater certainty, the Parties acknowledge that Claimant and Omni Bridgeway share a common interest in the documents and information related to the Claims and the Proceedings and disclosure of any such documents or information by Claimant to Omni Bridgeway does not constitute a waiver of any privilege that may attach to such documents or information. Omni Bridgeway will maintain all documents and information in strictest confidence.

6.3 Entitled to Documents and Information. Without interfering in the solicitor-client relationship between Claimant and Lawyers, and subject to: (a) Omni Bridgeway’s confidentiality obligations under this Agreement, including the implied undertaking of confidentiality applicable to Omni Bridgeway pursuant to Article 5 and Clause 6.1 of this Exhibit A; (b) Lawyers’ reasonable judgment with respect to preservation of all legal privileges of Claimant; and (c) compliance with Court orders or other legal restrictions on the sharing of information, Claimant authorizes Lawyers to comply with Clauses 7.2.3 and 7.2.4 of this Exhibit A. Claimant agrees to reasonably defend any claim made by any Defendant that Omni Bridgeway should not be entitled to any of the information or documentation to be provided to Omni Bridgeway pursuant to this Clause 6.3 or otherwise, at Omni Bridgeway’s expense. Any disbursements expended by Lawyers with respect to such a challenge shall not be included in the calculation of the Expended Litigation Funding Amount.

6.4 Exclusive Ownership of Information by Disclosing Party. All Confidential Information provided to the Recipient is and will remain at all times the exclusive property of and owned by the Disclosing Party (or its Affiliates or contract counterparties, as the case may be). Recipient’s use or awareness of such Confidential Information will create no rights, at law or in equity, in the Recipient in or to such Information, or any aspect or embodiment thereof. The furnishing of any Confidential Information will not constitute: (a) a grant, whether express or by implication, estoppel or otherwise, of any ownership interest or license, copyright, trademark, service mark, business and trade secret or other proprietary right to such Confidential Information, or of any right to use such Confidential Information for any purpose other than as specified in the Agreement; or (b) a waiver of any solicitor-client privilege, litigation privilege, common interest privilege, or any other applicable or available similar privilege or protection.

6.5 Non-Disclosure of Information. Subject to Clause 6.6 of this Exhibit A, the Recipient will not for any reason, during the term of this Agreement and thereafter, disclose, use, reveal, report, publish, transfer, or make available, directly or indirectly, to any Person other than its Affiliates, and, in the case of Omni Bridgeway, to any Omni Bridgeway Permitted Person, provided that (other than in the case of disclosure to an Affiliate of Omni Bridgeway) the applicable Omni Bridgeway Permitted Person has agreed with Omni Bridgeway to keep the information confidential or otherwise has a professional obligation of confidence, any Confidential Information provided to it in connection with the performance of its obligations or rights under the Agreement or the enforcement of its rights under the Agreement, unless expressly authorized to do so in writing by the Disclosing Party prior to the contemplated disclosure or required to do so by an express provision of the Agreement, by any applicable law or legally binding order of any court, government, semi-government, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity acting within its powers.

6.6 Confidentiality Procedures. Subject to Clause 6.5 and Clause 6.6 of this Exhibit A, Recipient will ensure that the Confidential Information it receives is not divulged or disclosed to any Person except its Affiliates and any assignee permitted pursuant to Clause 15.3 of this Exhibit A, who have a legitimate ‘need-to-know’ the Confidential Information. Recipient will be solely responsible for its and its Affiliates’ and assignees’ failure to comply with the provisions of the Agreement and Recipient will ensure its Affiliates’ and assignees’ compliance with the confidentiality obligations stipulated herein.

6.7 Confidentiality Procedures. Subject to Clause 6.5 and Clause 6.6 of this Exhibit A, Recipient will ensure that the Confidential Information it receives is not divulged or disclosed to any Person except its Affiliates and any assignee permitted pursuant to Clause 15.3 of this Exhibit A, who have a legitimate ‘need-to-know’ the Confidential Information. Recipient will be solely responsible for its and its Affiliates’ and assignees’ failure to comply with the provisions of the Agreement and Recipient will ensure its Affiliates’ and assignees’ compliance with the confidentiality obligations stipulated herein.

7. PART 7- COVENANTS OF CLAIMANT

7.2 Co-operation of Lawyers. At all times through the conclusion of the Proceedings and distribution of all Litigation Proceeds due and owing hereunder pursuant to a Court order, Lawyers will:

7.2.3 provide Omni Bridgeway, as and when requested by Omni Bridgeway, with access to a copy of any material document or filing made or obtained in the Proceedings by way of discovery, subpoena or any other lawful means, subject to (a) Omni Bridgeway’s confidentiality obligations under the Agreement, including the deemed undertaking of confidentiality applicable to Omni Bridgeway pursuant to Part 6 of Exhibit A (b) Lawyer’s reasonable judgment with respect to preservation of all legal privileges of Claimant; and (c) compliance with court orders or other legal restrictions on the sharing of information;

7.2.4 keep Omni Bridgeway full and continually informed of all material developments with respect to the Claims and the Proceedings [,] subject to Lawyers’ reasonable judgment with respect to preservation of all legal privileges of Claimant including:

7.2.4.1 informing Omni Bridgeway of any information, circumstance or change in circumstance likely to affect the Claims or any issue in the Proceeding relating to the viability of the Claims, Proceedings, or recoverability of the Litigation Proceeds;

10. PART 10 - TERMINATION

10.1 By Omni Bridgeway. Subject to (i) Court approval, such Court approval to be sought at an ex parte hearing with Omni Bridgeway, Lawyers and Claimant in attendance, but without the knowledge or attendance of any Defendant, and (ii) Clause 10.1.A, Omni Bridgeway will have the right to terminate the Agreement upon ten (10) days’ written notice to Claimant from and after the occurrence of any of the following events, so long as such event is continuing at the end of the ten (10) day period:

10.1.1 any breach by Claimant of a material provision in the Agreement;

10.1.2 Lawyers seek to withdraw or do withdraw from the Proceedings;

10.1.3 Claimant becomes insolvent or becomes subject to any proceeding in respect of voluntary or involuntary bankruptcy, winding-up, dissolution, liquidation, arrangement or compromise with creditors, or appointment of any Person with powers similar to a receiver, and the Court does not grant an order permitting Claimant to continue in its capacity as representative plaintiff, or the Court does not grant an order replacing Claimant with another representative plaintiff;

10.1.4 Omni Bridgeway reasonably considers the Proceedings no longer meritorious or commercially viable; or

10.1.5 A motion for certification as a class proceeding has not been heard by the Court within three (3) years of the date of this Agreement.

10.1.A If Omni Bridgeway seeks to terminate in accordance with Clause 10.1.4 after the certification decision (including the decision on any appeals therefrom), Omni Bridgeway must provide Lawyers and Claimant with three (3) months’ written notice.

10.3 Consequences of Termination.

10.3.1 If (i) Omni Bridgeway terminates the Agreement pursuant to any of Clauses 10.1.1 to 10.1.3 of this Exhibit A, or (ii) If the Agreement is terminated pursuant to Section 4.2 of the Key Terms and no new funding agreement is entered into with Claimant’s new lawyers, then Omni Bridgeway will continue to be entitled to be paid an amount equal to the Expended Litigation Funding Amount, the Project Costs, the Court-Ordered Costs Fee and the Omni Bridgeway Return out of any Litigation Proceeds recovered by Claimant, paid in the order of priority provided for in Article 3 of the Key Terms.

10.3.2 If (i) Omni Bridgeway, with the requisite consent or consents, terminates the Agreement pursuant to Clause 10.1.4 or 10.1.5 of this Exhibit A, or (ii) if Claimant terminates the Agreement pursuant to Clause 10.2 of this Exhibit A, then Omni Bridgeway will not be entitled to the Omni Bridgeway Return but will be entitled to be paid an amount equal to the Expended Litigation Funding Amount, the Project Costs and the Court-Ordered Costs Fee out of any Litigation Proceeds recovered by Claimant, paid in the order of priority provided for in Article 3 of the Key Terms.

10.3.3 All obligations of Omni Bridgeway under the Agreement will cease on the date the Termination becomes effective, other than obligations accrued prior to that date. Such accrued obligations include payment of any Disbursements and Court-Ordered Costs payable by Omni Bridgeway pursuant to the Agreement incurred up to the date the Termination becomes effective.

10.3.4 Upon any Termination, Omni Bridgeway will be entitled, in order to protect its own interests in relation to the Agreement, to keep copies of the Confidential Information provided to it pursuant to the Agreement, subject to Omni Bridgeway’s ongoing obligations pursuant to Clause 6.1 of this Exhibit A (Implied Undertaking of Confidentiality), Clause 6.5 of this Exhibit A (Non-Disclosure of Information) and Clause 6.7 of this Exhibit A (Confidentiality Procedures).

10.3.5 The following are continuing obligations and survive Termination, until the conclusion of the Proceedings and the distribution of all Litigation Proceeds pursuant to a Court Order, subject to the further conditions set out above in this Clause 10.3: Article 8 (Undertaking); Part 6 of this Exhibit A (Confidentiality and Provision of Documents); Part 7 of this Exhibit A (Covenants of Claimant); Part 12 of this Exhibit A (Governing Law) and Part 13 of this Exhibit A (Notices).

10.4 Continued Performance. Unless and until the Agreement is terminated under this Part 10, each Party will continue to perform its obligations under the Agreement notwithstanding the existence of any dispute among the Parties.

15. PART 15-GENERAL

15.3 Assignment. The Agreement will enure to the benefit of, and will be binding upon, the Parties hereto and their respective successors and assigns. All representations, warranties, covenants and indemnities made herein will survive the execution and delivery of the Agreement. Neither the Agreement, nor any rights, interests, obligations, and duties arising hereunder may be assigned or otherwise conveyed by Claimant without the express consent in writing of Omni Bridgeway, other than to a Court-appointed replacement representative plaintiff to the Proceedings. Omni Bridgeway may (a) assign its rights and obligations under the Agreement; and (b) provide any Co-Funder or counterparty under a co-investment participation agreement with all or a portion of its rights under the Agreement.

15.5 Amendment; No Waiver. The Agreement may not be amended, and no term or provision of the Agreement may be waived, except in writing signed by a duly authorized representative of each Party. No delay on the part of a Party in exercising any right, power or remedy under the Agreement will operate as a waiver thereof, and no single or partial exercise of any right, power or remedy by a Party will preclude any further exercise thereof.

EXHIBIT C – FORM OF UNDERTAKING

Capitalized terms used in this document and not defined herein will have the respective meanings ascribed to them in the Litigation Funding Agreement, dated April 11, 2023 among Omni Bridgeway (Fund 5) Canada Investments Ltd., Darryl Gebien, as representative plaintiff on behalf of certain Class Members or Claimant and Koskie Minsky LLP.

DEFINITIONS

COURT-ORDERED COSTS Means any legal fees and disbursements (including any interest thereon) that the Court orders Claimant to pay to Defendants, up to but not exceeding an aggregate of for all Defendants, provided that the applicable legal fees and disbursements were incurred by one or more of the Defendants after being served with the Statement of Claim and prior to any termination of this Agreement.

BY THIS UNDERTAKING, each of Omni Bridgeway Limited and Omni Bridgeway (Fund 5) Canada Investments Ltd., for the benefit of the Defendants:

(a) agrees to comply with any Court-Ordered Costs made by the Court;

(b) attorns to the jurisdiction of the Court in relation to any order the Court may wish to make directly against Omni Bridgeway Limited or Omni Bridgeway (Fund 5) Canada Investments Ltd., in the Proceedings that Omni Bridgeway Limited or Omni Bridgeway (Fund 5) Canada Investments Ltd., pays any Court-Ordered Costs;

(c) acknowledges that it shall be deemed to be a party to the Proceedings for the purposes of Rules 30.1.01 and 57.01 of the Rules of Civil Procedure, R.S.O. 1990, Reg 194;

(d) agrees, in the event that any Court-Ordered Costs are not paid by Claimant within twenty-eight (28) days of falling due, not to oppose any joinder application made by the Defendants in the Proceedings for the purpose of seeking an order that Omni Bridgeway Limited or Omni Bridgeway (Fund 5) Canada Investments Ltd. pay any Court-Ordered Costs;

(e) agrees to pay to the Defendants the final, quantified amount of any Court-Ordered Costs such that the Defendants may enforce the payment of that amount as a debt due and owing by Omni Bridgeway Limited or Omni Bridgeway (Fund 5) Canada Investments Ltd. to the Defendants;

(f) agrees to submit to the jurisdiction of the Court for the purposes of the Defendant enforcing any obligation on Omni Bridgeway Limited or Omni Bridgeway (Fund 5) Canada Investments Ltd. to pay the final, quantified amount of any Court-Ordered Costs;

(g) agrees to:

(i) notify the Defendants in writing of any termination of the LFA within 3 days of the court approving such termination; and

(ii) remain liable, upon termination of the LFA, for any Court-Ordered Costs;

(h) agrees that it will not revoke or withdraw this Undertaking prior to meeting any accrued obligations to pay Court-Ordered Costs in favour of the Defendants; and

(i) acknowledges having received valuable consideration for this Undertaking.

[25] In the immediate case, the Defendants have eight objections to the proposed Third-Party Funding Agreement; namely:

a. The Defendants object that there are no limits on amendments that may be obtained without notice and without court approval. (The Amendment Objection).

b. The Defendants object that there are no limits on assignments to other entities and that assignments may be made without notice and without court approval. (The Assignment Objection).

c. The Defendants object that the Agreement has contradictory and unduly narrow attornment clauses. (The Attornment Clause Objection).

d. The Defendants object that the Agreement contains an overly complicated and unnecessarily formalistic two-step process to enforce Court-Ordered Costs against the Funder and its parent company. (The Costs Enforcement Objection).

e. The Defendants object that the Agreement provides for approval of termination on an ex parte basis. (The Termination Procedural Objection).

f. The Defendants object that under the Agreement, it is unclear what are the consequences of termination on costs that have accrued pre-termination. (The Termination Objection about Accrued Costs).

g. The Defendants object that the Agreement allows for retention of the Defendants’ confidential information post-termination. (The Post Termination Confidentiality Objection).

h. The Defendants object that the Agreement allows the dissemination of their confidential information to large numbers of third parties, without justification or adequate protections to protect confidentiality and prevent misuse. (The Confidentiality Objection).

[26] The Defendants submit that their objections can be resolved by (a) revisions to the Agreement; (b) revisions to the form of Undertaking provided for in the Agreement; and (c) terms and conditions being added to the court’s order approving the Third-Party Funding Agreement.

[27] In this last regard, the Defendants propose the following terms be included in the court’s order; visualize:

1. Approval of the Litigation Funding Agreement is subject to the following:

(a) The delivery by Omni Bridgeway (Fund 5) Canada Investments Ltd. (“Funding Entity”) and by Omni Bridgeway Limited of a signed undertaking to the Defendants in the form of Undertaking attached to this Order as Schedule “A”;

(b) The Plaintiff and/or the Funding Entity shall not assign the Agreement in whole or in part to any other person without prior notice to the Defendants and Court approval of such assignment;

(c) The Plaintiff and/or Omni Bridgeway shall not amend the Agreement without prior notice to the Defendants and Court approval of such amendment;

(d) The Funding Entity and Omni Bridgeway Ltd. are deemed to be parties to the proceedings for the purposes of Rules 30.1.01 and 57.01 of the Rules of Civil Procedure, R.S.O. 1990, Reg 194 and are bound by the deemed undertaking of confidentiality imposed upon the parties to the proceeding;

(e) To the extent that any non-public documents, information or data provided by the Defendants in respect of the proceeding (“Defendant Information”) disclosed to and/or used by the Funding Entity and/or Omni Bridgeway Ltd governed by a confidentiality order and/or other protective order issued by the Court, the Funding Entity and Omni Bridgeway Ltd. shall be bound by the terms of such order. For greater certainty, Defendant Information produced or disclosed by a Defendant to the Plaintiff and designated by such a Defendant as confidential when so produced or disclosed shall not be disclosed to the Funding Entity or Omni Bridgeway Ltd. unless and until a confidentiality and/or other protective order has been issued by the Court;

(f) To the extent that an Affiliate or Representative as defined in the Agreement receives Defendant Information, those Third-Party recipients shall be provided with a copy of this Order and be bound by the implied undertaking of confidentiality and the deemed undertaking under Rule 30.1.01 and any such confidentiality order and/or other protective order issued by the Court;

(g) If there is any inconsistency between the terms of the Agreement and those in this order, any confidentiality order and/or any other protective order issued by Court, the terms of this order, the confidentiality order and/or other protective order will prevail; and

(h) If the Court approves the termination of the Agreement in accordance with Part 10 of the General Terms and Conditions of the Agreement, the Funding Entity and Omni Bridgeway Ltd. are obligated to pay all outstanding Court-Ordered Costs (as defined in the Agreement) accrued up to the date of such approval, regardless of the date the cost award is made.

2. The parties and/or OBL and Omni Bridgeway will comply with the Ontario Rules of Civil Procedure in respect of service of materials relating to any relief sought in respect of the Agreement, subject to any rights of the parties and/or OBL and Omni Bridgeway to redact information in the materials that is subject to legal privilege or confidentiality. No motions in respect of the Agreement shall be brought ex parte unless the court determines that an ex parte motion is appropriate in the circumstances.

C. Legal Background

[28] Although initially challenged on the grounds of being an illegal contract as champertous, third-party funding of class proceedings has been recognized as lawful across the country and as justifiable as a means to provide access to justice. Third-party funding is not an end in and of itself. The general test for approval of a third-party funding agreement is that the agreement should not 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. Wasylyk v. Lyft Inc., 2023 ONSC 3597; Lochan v Binance Holdings Ltd., 2023 ONSC 2142; Heller v. Uber Technologies Inc., 2021 ONSC 5434; Lilleyman v. Bumble Bee Foods LLC, 2021 ONSC 4968; Hoy v. Expedia Group, 2021 ONSC 2840; Eaton v. Teva, 2021 FC 968; Flying E Ranche Ltd. v. Canada (Attorney General), 2020 ONSC 8076; Drynan v Bausch Health Companies Inc., 2020 ONSC 4; JB & M Walker Ltd./1523428 Ontario Inc. v. TDL Group, 2019 ONSC 999; David v. Loblaw, 2018 ONSC 6469; Marriott v. General Motors of Canada Company, 2018 ONSC 2535; Houle v. St. Jude Medical Inc., 2017 ONSC 5129 affd 2018 ONSC 6352 (Div. Ct.); Cosimo Borrelli, in his capacity as trustee of the SFC Litigation Trust v Allen Tak Yuen Chan, 2017 ONSC 1815 (Div. Ct.); Berg v. Canadian Hockey League, 2016 ONSC 4466; Schenk v. Valeant Pharmaceuticals Inc., 2015 ONSC 3215; Musicians’ Pension Fund of Canada (Trustee of) v. Kinross Gold Corp., 2013 ONSC 4974; Stanway v. Wyeth Canada Inc., 2013 BCSC 1585; The Trustees of the Labourers' Pension Fund of Central and Eastern Canada v. Sino-Forest Corporation, 2012 ONSC 2937; Fehr v. Sun Life Assurance Company of Canada, 2012 ONSC 2715; Dugal v. Manulife Financial Corp., 2011 ONSC 1785 and 2011 ONSC 3147; Metzler Investment GMBH v. Gildan Activewear Inc., [2009] O.J. No. 3315 (S.C.J.), leave to appeal granted 2010 ONSC 1486 (Div. Ct.).

[29] For reasons that will become apparent in the discussion below about the perspectives of the parties in the immediate case, it is worth emphasizing that the legal/public policy for allowing third-party funding is not as a means to facilitate private investment schemes in what would be champerty but is as a means to the end of access to justice for the class members.

[30] Before recent amendments were made to the Class Proceedings Act, 1992 by the Ontario Government after it received a report from the Law Commission of Ontario, the recognition of the permitted use of third-party funding agreements was a development of the common law and the civil law of Québec. When the Ontario class action statute was amended, the Legislature added s. 33.1 to expressly address the law and procedure for the approval of a third-party funding agreement. Section 33.1 states:

Third-party funding agreements

33.1 (1) In this section,

“third-party funding agreement” means an agreement in which a funder who is not a party to a proceeding under this Act agrees to indemnify the representative plaintiff or provide money to pursue the proceeding under this Act, in return for a share of any monetary award or settlement funds or for any other consideration.

Contingent on court approval

(2) A third-party funding agreement is subject to the approval of the court, obtained on a motion of the representative plaintiff made as soon as practicable after the agreement is entered into, with notice to the defendant.

No force or effect unless approved

(3) A third-party funding agreement that is not approved by the court is of no force or effect.

Agreement to be provided to defendant and filed

(4) For the purposes of the motion, the representative plaintiff shall serve on the defendant, or provide in any other way the court orders, a copy of the third-party funding agreement, and shall file the copy with the court.

Permissible redaction

(5) The representative plaintiff may, subject to the regulations, redact from the copy of the third-party funding agreement provided and filed under subsection (4) information that may reasonably be considered to confer a tactical advantage on the defendant, but no other information shall be redacted from the copy.

Agreement to be provided to judge

(6) The representative plaintiff shall provide to the judge who will be presiding at the hearing of the motion a copy of the complete and unredacted third-party funding agreement, which shall not form part of the court file.

Requirement to disclose

(7) The court may order the representative plaintiff to disclose to a defendant any information in the third-party funding agreement that has been redacted in accordance with subsection (5).

Submissions

(8) The defendant is entitled to make submissions at the hearing of the motion.

Factors

(9) The court shall not approve a third-party funding agreement unless,

(a) the court is satisfied that,

(i) the agreement, including indemnity for costs and amounts payable to the funder under the agreement, is fair and reasonable,

(ii) the agreement will not diminish the rights of the representative plaintiff to instruct the solicitor or control the litigation or otherwise impair the solicitor-client relationship,

(iii) the funder is financially able to satisfy an adverse costs award in the proceeding, to the extent of the indemnity provided under the agreement, and

(iv) any prescribed requirements and other relevant requirements are met; and

(b) it is a term of the agreement that the funder shall be subject to,

(i) the same confidentiality requirements in respect of confidential or privileged information in the proceeding to which the representative plaintiff would be subject, and

(ii) the deemed undertaking rules set out under the rules of court, as if the funder were a party to the proceeding. 2020, c. 11, Sched. 4, s. 31.

Same, independent legal advice

(10) In determining whether a third-party funding agreement meets the requirements of clause (9) (a), the court shall consider whether the representative plaintiff received independent legal advice with respect to the agreement.

Indemnity for costs

(11) If costs are ordered to be paid by the representative plaintiff, the defendant has the right to recover the costs directly from the funder, to the extent of the indemnity provided under an approved third-party funding agreement.

Security for costs

(12) The defendant is entitled, on motion, to obtain from the funder security for costs to the extent of the indemnity provided under an approved third-party funding agreement, if,

(a) the funder is ordinarily resident outside Ontario;

(b) the defendant has an order against the funder for costs in the same or another proceeding that remain unpaid in whole or in part; or

(c) there is good reason to believe that the funder has insufficient assets in Ontario to pay the costs.

Directions

(13) The court may give any necessary directions respecting a dispute or question that arises in relation to a third-party funding agreement.

Changes to agreements

(14) This section applies, with necessary modifications, with respect to any changes to an approved third-party funding agreement that are agreed to by the parties to it.

Notice of termination

(15) The representative plaintiff shall give notice to the court and to the defendant if,

(a) an approved third-party funding agreement is terminated; or

(b) the funder becomes insolvent.

Non-application

(16) This section does not apply with respect to funding provided out of the Class Proceedings Fund established under the Law Society Act.

[31] As noted above, putative Class Counsel argues that s. 33.1 of the Class Proceedings Act, 1992 codifies the law about third-party funding agreements and in effect sets an exclusive statutory test that replaces and overrides the common law’s test for the approval of third-party funding agreements. This categorical submission is incorrect.

[32] There is some codification provided by s. 33.1, particularly of the procedure, but the common law and civil law developments from Québec remain pertinent and have not been overwritten, overturned, or replaced by an exclusive statutory test. Indeed, to suggest otherwise is to ignore that the Law Commission of Ontario recommended the continuation of a fully informed judicial scrutiny of third party funding agreements. The Commission stated at page 86 of its final report:

Because the private funder’s return on investment will be deducted from each class member’s compensation, and to guard against improper meddling in the litigation by a non-party, it is important that funding agreements be reviewed by the court in all cases, even if the representative has obtained independent legal advice. To this end, the requirement that representative plaintiff bring a motion for court approval of a funding agreement should be codified in the CPA. The provisions should also address specific criteria including timing, disclosure, and right of recovery among other factors.

Although the LCO acknowledges that the size of the funder’s return is squarely a matter of access to justice for class members, judges must have the discretion to determine what is an appropriate levy or fee in the circumstances of each type of arrangement. In addition, as the models of funding change, inflexible caps within the CPA would be counterproductive.

Similarly, particular terms related to control of the litigation, reporting obligations, rights of exit and privilege are all properly within the scope of judicial scrutiny, as has been the case to date.

[33] In any event, Dr. Gebien’s submission is an arid one because if there was an exclusive statutory test, the directive of s. 33.1(9)(a)(i) that “the court shall not approve a third-party funding agreement unless, the court is satisfied that, the agreement, including indemnity for costs and amounts payable to the funder under the agreement, is fair and reasonable,” reincorporates the fundamental core of the common law test.

D. Discussion and Analysis

[34] In the immediate case, I am satisfied that the technical or procedural requirements for approval of a third-party funding agreement have been satisfied. In this regard, I am satisfied that:

a. Dr. Gebien has received independent legal advice.

b. Adequate evidence has been proffered of the background factual circumstances.

c. The retainer agreement and the Third-Party Funding Agreement have been disclosed to the court and the Third-Party Funding Agreement has been disclosed to the Defendants with appropriate redactions.

d. Dr. Gebien has satisfied the notice requirements of the Class Proceedings Act, 1992.

[35] In the immediate case, I am satisfied that a third-party funding agreement (or the support of the Class Proceedings Fund) is necessary because without such assistance, Dr. Gebien and the class members would have no means for access to justice and but for a third-party’s financial assistance, society would be bereft of a means to modify the behaviour of alleged wrongdoers who have harmed a group.

[36] In the immediate case, I am satisfied that the Third Party-Funding Agreement is adequate for its purposes of providing a means to access to justice and behaviour modification.

[37] Further, I am satisfied that the Third-Party Funding Agreement in the immediate case does not interfere with the lawyer-client relationship, the lawyer’s duties of loyalty and confidentiality or the lawyer’s professional judgment and carriage of the litigation on behalf of Dr. Gebien or the putative Class Members.

[38] In the immediate case, I am also satisfied that the financial terms of the Third-Party Funding Agreement are fair and reasonable. The financial terms of the Agreement are comparable to the funding arrangements under the Class Proceedings Fund. The return payable to the Funding Entity under the Agreement ranges between 9-11% of proceeds from the litigation. By comparison, the levy payable to the Class Proceedings Fund is fixed at 10%. The additional amounts payable to the Funder, including the Funder’s Project Costs and Court-Ordered-Costs Fee, are modest and are reasonable in the circumstances.

[39] However, in the immediate case, while all these crucially important matters for approval of a third-party funding agreement have been satisfied, the court is not in a position to approve or refuse to approve the proposed Third-Party Funding Agreement.

[40] Approval rather depends upon considering the eight objections raised by the Defendants and then adjourning this motion to provide Dr. Gebien, Koskie Minsky, LLP, and Omni Bridgeway Ltd. with an opportunity to address the objections that I shall identify below as requiring a resolution.

(a) The Amendment Objection

[41] Clause 15.5 of the Third-Party Funding Agreement, which is set out above, provides that the Agreement may be amended, and a term or provision waived, based on an agreement in writing. The Defendants object that are no requirements for notice to the Defendants or the Court, and no requirement for Court approval of amendments.

[42] There is no merit to the Defendants’ objection about amendments to the Third-Party Funding Agreement.

[43] While Class Counsel, without conceding the need for it, could have graciously accepted the Defendants’ chicken soup-amendment to clause 15.5 of adding the words “and with Court approval sought on notice to the Defendants,” and while this proposed amendment adds tasty comfort to the Agreement, it is not a necessary amendment. Both as a matter of contract interpretation and as a matter of the statutory imperatives of s 33.1 of the Class Proceedings Act, 1992, any and all amendments to the Third-Party Funding Agreement require a motion for court approval on notice to the Defendants. Therefore, no revision is required to the proposed Third-Party Funding Agreement.

(b) The Assignment Objection

[44] Clause 15.3 of the Third-Party Funding Agreement, which is set out above, provides that (a) Dr. Gebien may assign the Agreement with the approval of Omni Bridgeway Ltd. and (b) the Funding Entity may assign its rights and obligations under the LFA, and may provide any Co-Funder or counterparty under a co-investment participation agreement with all or a portion of its rights under the Agreement. The Defendants object that there are no limits on the scope of these assignments. They object that there are no requirements for notice to the Defendants or the Court, and no requirement for Court approval of assignments.

[45] There is no merit to the Defendants’ objection about assignments of the Third-Party Funding Agreement.

[46] While, once again, Class Counsel, without conceding the need for it, could have graciously accepted the proposed chicken soup-amendment to clause 15.3 by adding the words “and with Court approval sought on notice to the Defendants,” both as a matter of contract interpretation and as a matter of the statutory imperatives of s. 33.1 of the Class Proceedings Act, 1992, any assignment of the Third-Party Funding Agreement requires a motion for court approval on notice to the Defendants. The proposed amendment to the Third-Party Funding Agreement is not necessary.

[47] However, before moving on, I pause to note that in his Reply Factum, Dr. Gebien submits that while court approval is required for all amendments to or assignments of a Third-Party funding agreement, notice to a defendant may not be necessary for amendments or assignments that do not implicate the interests of the defendant. Including the impossibility of prejudging what does or does not implicate the interests of a defendant, I do not agree with this submission. If there is to be an amendment or an assignment of a Third-Party funding agreement, then notice must be given to the defendant, and then the defendant can decide whether to make submissions to the court. Notice to the defendant of a change to the Third-Party Funding Agreement is always required.

(c) The Attornment Clause Objection

[48] The Defendants observe that the Third-Party Funding Agreement has two attornment provisions, one in Article 9, set out above, and one in the undertaking to be signed by the Funding Entity and by Omni Bridgeway Ltd., which undertaking, the Defendants submit, limits the attornment to be only in respect of an order to pay Court-Ordered Costs, which is a defined term under the Third-Party Funding Agreement.

[49] The Defendants object to these attornment provisions, and they submit that to avoid confusion the two provisions should be drafted in identical language that clearly states that the Funding Entity and Omni Bridgeway Ltd. attorn to the jurisdiction of this Court for all purposes relating to the legal proceeding.

[50] I disagree with the arguments of both parties about this objection advanced by the Defendants. However, their objection does identify a problem that needs to be addressed. Before I identify that problem, I shall discuss what are not problems about the current attornment provisions.

[51] As I interpret Article 9 of the Third-Party Funding Agreement, the Funding Entity fully attorns to the jurisdiction of the court. The words in Article 9 “including with respect to the implied undertaking of confidentiality and agrees to comply with any protective orders made by the Court, and with respect to the Undertaking attached at Exhibit C” are emphatic, but these words are, technically speaking, unnecessary for interpretation because the Funding Entity has fully attorned to the jurisdiction of the court, whatever that jurisdiction might be.

[52] I, thus, disagree with the Defendants’ argument that insofar as the Funding Entity is concerned, a revision is needed to Article 9. Insofar as the Funding Entity is concerned, Article 9 is satisfactory.

[53] Insofar as the Funding Entity is concerned, while I agree with Dr. Gebien that a revision is not required to Article 9, I disagree with Dr. Gebien’s explanation for why a revision is not necessary. Dr. Gebien incorrectly submits that Article 9 does not require the Funding Entity to attorn for all purposes because this would be inconsistent with the provisions of the Third-Party Funding Agreement, not set out above, in which disputes between the parties to the Third-Party Funding Agreement are to be arbitrated. As I interpret Article 9, the Funding Entity has attorned for all purposes to the court’s jurisdiction. The fact that the parties have agreed to arbitrate is not inconsistent and does not detract from the Funding Entity’s attornment to the court’s jurisdiction, which would include attorning to the court’s jurisdiction under the Arbitration Act, 1991, which resolves the tension between the court’s jurisdiction and a submission to arbitration.

[54] Turning then to the matter of attornment and Omni Bridgeway Ltd., which is not a signatory of the Third-Party Funding Agreement. Here, there is a problem with the Third-Party Funding Agreement, but the problem is, once again, not a problem about the language of Article 9, nor is it a problem about the language of the Undertaking. As I interpret Article 9 of the Third-Party Funding Agreement, the Funding Entity promises to procure an undertaking from Omni Bridgeway Ltd. to attorn to the jurisdiction of the court.

[55] That would be an undertaking to fully attorn to the jurisdiction of the court. Without repeating what I have said above, once again, the words in Article 9 about the scope of that undertaking are emphatic, but these words are, technically speaking, unnecessary for interpretation, because the attornment of Omni Bridgeway Ltd. to be procured is an attornment to the jurisdiction of the court, whatever that jurisdiction might be. Thus, no revision to Article 9 is required. Nor is a revision to the Undertaking about costs which is to be signed by Omni Bridgeway Ltd. necessary. That particular Undertaking is satisfactory as far as it goes.

[56] However, there is a problem associated with the particularity of that Undertaking about costs. The problem is that it only partially fulfills the Funding Entity’s promise to “procure that Omni Bridgeway Ltd. attorn to the jurisdiction of the Court.” A more comprehensive undertaking is also required to comply with the provisions of the Third-Party Funding Agreement.

[57] The Defendants have drafted a new comprehensive attornment provision modelled after the attornment provision in Hoy v. Expedia Group, 2021 ONSC 2840, of which I make no comment. It is for the parties to the Third-Party Agreement to negotiate and draft its terms. For present purposes, as foreshadowed in the introduction, I am adjourning this motion so that Dr. Gebien can address the problem identified by the Defendants as he and Proposed Class Counsel and the Funding Entity may be advised. The problem is that the Funding Entity has not yet performed its promise of procuring a comprehensive attornment agreement from Omni Bridgeway Ltd.

(d) The Costs Enforcement Objection

[58] Section 33.1 of the Class Proceedings Act, 1992, provides a defendant with a right to recover costs directly from a Third-Party Funder. In the immediate case, under the Third-Party Funding Agreement, this recourse is available for the Defendants, but the Agreement imposes a requirement that costs be first demanded of Dr. Gebien and when he fails to pay within twenty-eight days then the Third-Party Funder will not oppose being joined to an enforcement motion.

[59] In paragraphs 42-45 of their factum, the Defendants object to these provisions in the Third-Party Funding Agreement as cumbersome, inefficient, tardy, and contrary to the letter and spirit of the Class Proceedings Act, 1992. The Defendants state:

42. Rather than provide the Defendants with a direct right of recourse for recovery of Court-Ordered Costs from Omni Bridgeway, the LFA instead envisions an unnecessarily complicated process. Under clause (d) of the form of Undertaking, the Defendants first must seek payment of Court-Ordered Costs from the Plaintiff. Only where the Plaintiff has not paid Court-Ordered Costs within twenty-eight days of falling due have Omni Bridgeway and OBL agreed “not to oppose” any joinder application made by the Defendants for the purpose of seeking an Order that they pay the outstanding Court-Ordered Costs.

43. Section 33.1(11) of the CPA states that “[i]f costs are ordered to be paid by the representative plaintiff, the defendant has the right to recover the costs directly from the funder, to the extent of the indemnity provided under an approved third-party funding agreement.” The Plaintiff’s proposed two-step process and twenty-eight day waiting period is inconsistent with the direct recourse contemplated under section 33.1(11) and would result in the unnecessary expenditure of judicial resources. As evidenced by his affidavit, the reality is that the Plaintiff will never have the means to pay a costs award. As set out in Exhibit ‘B’ to this factum, the Defendants propose that Omni Bridgeway and OBL should simply undertake to pay Court-Ordered Costs, without first requiring an entirely unnecessary procedural step.

44. Such direct right of recourse would be consistent with the Order of Justice Belobaba approving the litigation funding agreement in Maginnis, which states that: “the Defendants shall have the right to directly claim against [the funder] to enforce payment of any costs awarded against the Plaintiffs for which [the funder] is responsible pursuant to the Agreement.”

45. At a minimum, instead of undertaking not to oppose, Omni Bridgeway and OBL should undertake to consent to a joinder application brought under such circumstances. This would be consistent with the affirmative undertaking provided by the funder in the litigation funding agreement approved by this Court in Expedia v. Hoy, 2021 ONSC 2840.

[60] Dr. Gebien’s response to this challenge is to defend the approach to paying adverse costs awards as it has been set out in the Third-Party Funding Agreement as normative, adequate, and sensible in providing some time (twenty-eight days) to fund the reimbursement.

[61] This is a petty dispute between the parties, and while I prefer and would recommend a less cumbersome approach than suggested by the contracting parties, this matter is not one that would justify refusing to approve the Third-Party Funding Agreement in the immediate case, assuming it was otherwise approvable.

(e) The Termination Procedural Objection

[62] The Defendants object to clause 10.1 of the Third-Party Funding Agreement that provides that the Funding Entity may terminate the Agreement with Court approval, on an ex parte basis. The Defendants assert that they should be given notice of a proposed termination in order to allow them to raise any concerns and address potential prejudice to their legitimate interests.

[63] This objection by the Defendants is without merit.

[64] Section 33.1 of the Class Proceedings Act does not require advance notice of a potential termination of the Third-Party Funding Agreement being given to the defendant. Section 33.1 (15)(a) of the Act provides for after-the-fact notice; it states:

Notice of termination

(15) The representative plaintiff shall give notice to the court and to the defendant if,

(a) an approved third-party funding agreement is terminated; or […]

[65] There are three good reasons why the motion to terminate is and should be ex parte and without before-the-fact notice to the Defendant.

[66] First, as will be discussed below, the consequences to the defendant of a termination of a Third-Party Funding Agreement is a matter that should be addressed before and not after the fact of termination. In other words, the defendant should already know what will happen if the Agreement is terminated because of its participation in the motion to approve the Agreement.

[67] Second, the court may not approve the termination and thus nothing will have changed for the defendant, who in any event has no standing in what is essentially a triangular contract dispute among a plaintiff, class counsel and the third-party funder.

[68] Third, the defendant should not be involved in a motion that is akin to a motion for a lawyer to remove himself or herself from the record because of a dispute with his or her client; any dissention in the retainer arrangements is a privileged lawyer and client matter and none of the business of the defendant.

(f) The Termination Objection about Accrued Costs

[69] The Defendants submit that clauses 10.3.3 and 10.3.5, under the heading “Consequences of Termination”, should explicitly clarify that the Funding Entity and Omni Bridgeway Ltd. are obligated to pay all Court-Ordered Costs accrued pre-termination, notwithstanding that the Order awarding such costs is issued and entered post-termination.

[70] The Defendants assert to similar effect, that the definition of Court-Ordered Costs should be revised to clarify that the definition applies regardless of whether costs are ordered before or after the effective date of termination, provided that the applicable legal fees and disbursements were accrued before that date.

[71] The Defendants assert that absent such revisions, there is nothing preventing Omni Bridgeway from, for example, strategically timing termination to avoid responsibility for an anticipated adverse cost award.

[72] I agree with Dr. Gebien that there is no merit to this challenge because properly interpreted the Third-Party Funding Agreement and the Undertaking that is to be procured from Omni Bridgeway Ltd. already protects the Defendants.

[73] It may be taken from Article 2.3.1 and clause 10.3.3 that the obligation to pay for costs accrued prior to termination of the Agreement is an obligation that already exists, and it is not necessary to clarify what is already clear. The Defendants’ objection is without merit.

(g) The Post-Termination Confidentiality Objection

[74] The Defendants object to clause 10.3.4 of the Third-Party Funding Agreement which entitles the Funding Entity to keep copies of the Defendants’ confidential information provided to it after the termination of the Agreement.

[75] The Defendants protest that there is there is no justification for why the intrusion upon the Defendants’ privacy interests should continue once the Funding Entity’s role in the litigation has come to an end. The Defendants assert that clause 10.3.4 should be amended such that the Funding Entity and other recipients of discovery documents and other confidential information, if any, must destroy all copies of confidential information post termination.

[76] Dr. Gebien, however, submits there is a justification for this provision being in the Third-Party Funding Agreement. In paragraph 42 of his Reply Factum, he states:

42. As contemplated by Clause 10.3.4, the Funding Entity may have reason, upon termination, to maintain copies of Confidential Information. As one example, ongoing arbitration of disputes between the Plaintiff and the Funder following termination may require the use of such documents. These may be documents that originated with the Plaintiff, rather than the Defendants. This provision must be maintained. The Defendants, if they wish, can seek further stipulations as part of a confidentiality or protective order addressing the retention of documents they disclose.

[77] There is some merit to this answer by Dr. Gebien. There is also some merit to the Defendants’ objection; thus, for this objection, I agree in part and disagree in part with both parties’ submissions.

[78] In a given case, there may indeed be a reason for the Funding Entity to need to retain documents that were produced to it pursuant to the Third-Party Funding Agreement and thus the Defendants are incorrect in categorically asserting that its confidential documents should be returned or destroyed post termination. Conversely, however, in a given case, there may be no reason for the Funding Entity to need to retain any documents. It is thus not inevitable that this retention of documents provision must be maintained; i.e., survive the termination of the Agreement.

[79] Thus, it seems that retention of documents will be needed in some cases and not others. This observation leads to the suggestions that: (a) the Third-Party Funding Agreement should contain some provision to justify document retention post termination; and (b) now is the time to address how the Defendants’ documents should be treated as a consequence of termination and the court should not to wait for the defendant to apply for further stipulations as part of a confidentiality or protective order.

[80] One can be optimistic that the Defendants’ challenge is not insurmountable but, once again, it is not for the court to be a contract draftsperson. The Defendants’ objection about document retention is an objection that requires attention.

(h) The Confidentiality Objection

[81] The Defendants’ Confidentiality Objection is their most important and serious objection raised against approval of the proposed Third-Party Funding Agreement.

[82] The Defendants submit that the Agreement does not adequately protect their rights to confidentiality. The Defendants submit that there should be no disclosure beyond disclosure to the Funding Entity and to Omni Bridgeway Ltd. The Defendants submit that the current scope of permissible disclosure is indeterminate because under clause 6.5, the Funding Entity is entitled to disseminate documents to “Affiliates” and to “Omni Bridgeway Permitted Persons,” which are very extensive and encompassing defined terms including disclosure to:

a. any subsidiary company controlled by Omni Bridgeway Ltd. (some 50 entities in 12 countries or territories);

b. any entity or trust controlled or advised or managed, directly or indirectly, by the Funding Entity, Omni Bridgeway Ltd., or a subsidiary;

c. representatives of the Funding Entity, Omni Bridgeway Ltd., or a subsidiary, including employees, agents, prospective insurers, consultants, contractors, investors, third-party debtors, prospective third-party debtors, as well as unspecified “other” professional advisers;

d. any security-holder of an Affiliate of the Funding Entity and the security holder’s representatives, including employees, agents, prospective insurers, consultants, contractors, investors, third-party debtors, prospective third-party debtors, as well as unspecified “other” professional advisers;

e. any debt capital provider or proposed debt capital provider to the Funding Entity, Omni Bridgeway Ltd., or an Affiliate and their Representatives, including employees, agents, prospective insurers, consultants, contractors, investors, third-party debtors, prospective third-party debtors, as well as unspecified “other” professional advisers.

[83] The Defendants also complain that there are no limits on what use can be made of the disclosed confidential information. The Defendants note that under clause 7.2.3 the definition of material is itself undefined and indeterminate. They propose that the definition of confidential material should be confined to information disclosed as a matter of documentary disclosure (discovery) under the Rules of Civil Procedure.

[84] Further the Defendants object that the Affiliates’ (a large and indeterminate group) use of the Defendants’ documents is arguably unrestricted because 6.5 excludes Affiliates from its governance.

[85] To address these issues, the Defendants propose deleting the definition of “Omni Bridgeway Permitted Person” entirely, and narrowing “Affiliates” to include only Omni Bridgeway Ltd. and a significantly reduced list of Representatives of the Funding Entity and Omni Bridgeway Ltd. In addition, the Defendants propose adding binding confidentiality protections, including clarifying that “Confidential Information” includes documents produced by the Defendants that are subject to the deemed undertaking rules of court.

[86] Dr. Gebien’s response to the Defendants’ objections and protests is that the Funding Entity and Omni Bridgeway Ltd. have acknowledged that they are bound by the deemed undertaking rule and the costs rules of the Rules of Civil Procedure and that is all that is required. Dr. Gebien submits that the Third-Party Funding Agreement as submitted is sufficient and the suggested amendments to its confidentiality provisions should be rejected because among other things they would interfere with the needs, rights, and obligations of the parties to the Third-Party Funding Agreement.

[87] Dr. Gebien rejects the idea that the Third-Party Funding Agreement, to which the Defendants are not a party, is the place to fully protect the Defendants’ confidentiality rights throughout the life of the action. Dr. Gebien submits that to the extent that the Defendants are obliged to disclose confidential documents at the discovery stage of the proceeding they may seek a confidentiality or protective order, which is contemplated by Article 9 of the Agreement because the Funding Entity “agrees to comply with any protective order made by the Court.” While conceding that a confidentiality or protective order will be required in the immediate case, Dr. Gebien submits that this should be obtained in the normal course and not prematurely as a factor in the court’s consideration of whether to approve a Third-Party Funding Agreement.

[88] Dr. Gebien points out that Omni Bridgeway’s infrastructure is complex with a team of specialists in law, intelligence, and finance that includes over 185 people in its 26 offices around the world and the Third-Party Funding Agreement recognizes how Omni Bridgeway Ltd. operates while providing adequate protections to the Defendants.

[89] In my opinion, Dr. Gebien’s response to the Defendants’ objection to confidentiality provisions is inadequate. It is not premature to address the Defendants’ confidentiality concerns in a case in which seventeen groups of pharmaceutical companies obviously have legitimate concerns about who has eyes on their confidential information.

[90] But for the common law and s. 33.1 of the Class Proceedings Act, 1992, the Funding Entity and Omni Bridgeway Ltd. would be total strangers to the litigation (a champertor) and they would not have any access to the Defendants’ confidential information or any information for that matter. It is not the Defendants’ problem that the Funding Entity and Omni Bridgeway Ltd. have a complex infrastructure. It is for Dr. Gebien on this funding approval motion to explain why the Defendants’ concerns about indeterminacy and the absence of safeguards to protect its privacy concerns are baseless or have been satisfactorily addressed.

[91] In the immediate case, the Defendants have proposed a way to address their privacy and confidentiality concerns that would allow the Third-Party Funding Agreement to be approved (probably because they have no right to veto and because they are third party beneficiaries of the litigation funding agreement insofar as adverse costs awards are concerned). The Defendants’ proposal cannot be rejected out of hand to await a further order of the court.

[92] I am not to be taken as accepting or rejecting the Defendants’ proposal. All I am saying is that the parties to the Third-Party Funding Agreement need to come back with a better explanation why the current confidentiality provisions are adequate, or they need to come back with another proposal of their own.

E. Conclusion

[93] For the above reasons, I am adjourning the motion for Third-Party Fee Approval to a case management conference to provide Dr. Gebien and Putative Class Counsel an opportunity to resolve the genuinely meaningful objections that I have identified above if they are disposed to do so as they may be advised.

Perell, J. Released: August 11, 2023.