Doug Fenton comments in The Lawyer’s Daily on the Supreme Court of Canada speaking for the first time on the legality of third-party litigation funding agreements—in unanimous reasons for judgment that also shed new light on many aspects of the Companies’ Creditors Arrangement Act (CCAA).

“The issues before the Supreme Court were fairly narrow,” (Fenton) noted. “The Supreme Court expressly stated that it was not opining on the contours or legality of litigation funding agreements generally, including in the class actions context, where the majority of judicial attention has been to date.”

Nevertheless the court did affirm for the first time that LFAs are not per se illegal as champertous, a conclusion also reached by a number of lower courts. “With that endorsement, I expect we will continue to see a proliferation of LFAs in a variety of contexts — for example, in insolvency proceedings, class action proceedings, and, increasingly, commercial litigation,” Fenton predicted.

The story and Doug’s full comments are available here.