Cy-Près Love: B.C. to Impose Requirements for Charitable Distributions of Funds from Class Proceedings
November 22, 2018
On November 19, 2018, the Government of British Columbia introduced Bill 57, Attorney General Statutes Amendment Act, 2018 (Bill), in the legislative assembly for first reading. If passed, the Bill will amend the Class Proceedings Act to provide direction on how to allocate undistributed funds at the end of a class action.
Historically, funds that were not distributed to the class were to be applied in any manner that could reasonably be expected to benefit class or subclass members, even though the order does not provide for monetary relief to individual class or subclass members. This is known as a cy-près distribution and such funds were typically provided to a charity.
The Government of British Columbia, in introducing the amendment, noted that one of the fundamental purposes of a class action is to provide access to justice. It further noted that the leading funder of access to justice in British Columbia is the Law Foundation of British Columbia (Law Foundation).
The proposed amendment requires that at least 50 per cent of any cy-près distribution will go to the Law Foundation (subject to some exceptions). The Law Foundation is a non-profit foundation created by legislation in 1969 to receive and distribute the interest on clients’ funds held in lawyers’ pooled trust accounts maintained in financial institutions. The Legal Profession Act directs the Law Foundation to distribute these funds in five areas: legal education, legal research, legal aid, law reform, and law libraries.
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