July 2016
OTLA – Lexfund v. Ferro
Counsel for the individual borrowers: Mary Grosso
Interest rate on litigation loans reduced due to failure by loan company to comply with Consumer Protection legislation.
Lexfund is a litigation loan company. It loaned money to five people who had been injured in motor vehicle accidents and commenced lawsuits for damages. The money was needed to cover living and medical expenses while their lawsuits went forward. All five individual borrowers were represented by the same lawyer, Lou Ferro.
The Court held that Lexfund, with full knowledge of the Consumer Protection Act, made an informed decision not to comply with the Act’s disclosure provisions by sending that disclosure directly to Mr. Ferro and not the borrower as mandated by the Act. He held that Lexfund “flagrantly and with a sense of entitlement” crafted documents in an effort to allow it to process its loans without full compliance with the Consumer Protection Act. These breaches of the Act by Lexfund “were not technical; they went to the very heart of the reason for the Act coming into force”. Justice Sloan held that there was actual prejudice to the borrowers in this case.
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