Vol 15 (2018) - Issue 6

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Third Party Litigation Funding Agreements: Their Use and Current Standing in the Canadian Insolvency Practice

Introduction
Bringing a judicial proceeding is long and costly, as lawyers’ fees, expert fees, judicial costs, and outof-pocket expenses rapidly add up. Not all potential plaintiffs have sufficient liquidities to enforce their rights before the courts, and it goes without saying that this is especially the case for insolvent potential plaintiffs. Indeed, companies undergoing a restructuring or liquidation under the Bankruptcy and Insolvency Act or the Companies Creditors’ Arrangement Act (the 'CCAA') sometimes hold valuable claims which could be monetised through litigation to the benefit of creditors, but lack sufficient funds to bring their case to justice. The funding and financing of litigation for insolvent corporate debtors is a trending topic in the Canadian legal community.