The Canadian courts have confirmed in a series of recent cases that third-party funding is permitted in Canada. Previously, in Canada's common law jurisdictions (ie, all provinces aside from Quebec), opportunities for third-party funding were constrained by the longstanding common law principles of maintenance and champerty. However, the law has evolved to permit third-party funding, subject to certain restrictions.
In a recent decision the Ontario Superior Court of Justice confirmed that an arbitration party should not unreasonably be deprived of its contractual right to appoint an arbitrator of its choice, and that a party bringing unsubstantiated allegations of a reasonable apprehension of bias may face cost consequences. The decision sends a strong warning against making baseless attempts to upset the arbitration process.
The use of funding agreements in international arbitration proceedings is increasingly common. The extent to which privilege may attach to a funding agreement governed by the laws of British Columbia was recently addressed by the British Columbia Supreme Court in the context of a class action proceeding.
The Supreme Court has ruled on the question of whether an arbitration agreement in a mobile phone contract required the consumer's claim to be resolved by arbitration. Rather than ruling on the wider issue of whether such an agreement would act as an effective bar to class proceedings in general, the court framed its analysis within the narrower context of British Columbia's Business Practices and Consumer Protection Act.