There are only a handful of decisions that interpret the new statutory carriage test under the Class Proceedings Act, 1992 (“CPA”).[1] In the recent case Parkin v. The Toronto-Dominion Bank, 2025 ONSC 1201, the Ontario Superior Court of Justice granted carriage of a proposed securities class action against TD Bank to Parkin et al v. Toronto-Dominion Bank et al (the “Parkin Action”). No prior carriage decisions under the amended CPA have considered fee-splitting arrangements between Canadian and US counsel.
Justice Leiper determined that the Parkin Action was superior as it avoided two impediments to leave and/or certification that were present in one or both of the two competing actions. The Parkin Action avoided potential concerns relating to contingency fee-splitting with a US firm that the court found may be contrary to the Rules of Professional Conduct (the “Rules”), and unlike a competing action, Gazarek et al v. Toronto-Dominion Bank et al (the “Gazarek Action”) the Parkin Action did not plead fraudulent concealment, which Justice Leiper determined would be a novel attempt to toll the three-year limitation period applicable to class members’ statutory claims.
The decision in Parkin underscores the importance of ensuring that any contingency-fee splitting agreements entered into by Plaintiffs’ counsel comply with the Rules. While fees and funding arrangements are subject to court approval, the Parkin decision is a reminder that such agreements may also be considered by the court on a carriage motion.