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TSN Senior Correspondent

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An Ontario court judge has ordered former Ontario Hockey League player Sam Berg to obtain independent advice about an agreement that would see a third-party company cover his legal bills in exchange for a portion of any judgment against the OHL and its 20 teams.

According to documents filed in Ontario Superior Court, Toronto-based BridgePoint Financial Services Inc. has agreed to fund Berg’s complex proposed class-action lawsuit against the OHL.

Berg has asked an Ontario Superior Court to confirm that the more than 1,300, mostly teenaged players in the Canadian Hockey League, the umbrella league to the OHL, Western Hockey League and Quebec Major Junior Hockey League, are employees of their teams.

If they are employees, Berg argues, then they ought to be paid at least minimum wage. Some players in the CHL work more than 60 hours per week but make as little as $40 in compensation, his lawsuit alleges.

The lawsuit could change the face of major-junior hockey across North America. The former players have asked that the CHL be ordered to pay $187 million to cover overtime, holiday and back pay and punitive damages.

BridgePoint is one of a number of companies that have entered the litigation financing business, an industry that has troubled some judges who worry that lawsuit funders will seize control of cases, putting their own interests ahead of those of the plaintiffs.

Justice Paul Perell wrote in a court filing that he’s concerned that Berg’s agreement with BridgePoint could be left him exposed to paying legal costs if he loses his case against the OHL.

“The formula for the third party funder’s recovery is extraordinarily complicated, and it contains several temporal variables and also minimums and maximums,” Perell wrote. “There are charts and tables that attempt to explain BridgePoint’s potential recoveries. There are limits and gaps in BridgePoint’s obligations to indemnify Mr. Berg for adverse costs consequences. There are complicated provisions about when BridgePoint has a right to withdraw from the agreement.”

Perell wrote that he agreed with keeping secret the contract between BridgePoint and Berg. If the OHL were to learn of the contract’s details, Perrell wrote, it would give them a tactical advantage.

Perell’s opinion is curious because several years ago during a proposed class action against Sun Life Assurance Co. of Canada, he ruled that an arrangement with BridgePoint must be disclosed and scrutinized in court, despite an attempt by the plaintiffs to have it approved behind closed doors.

Berg’s lawyer Ted Charney has been instructed by Perell to hire an independent lawyer to provide Berg with advice about whether he should agree to the third-party funding agreement. Berg and the OHL are scheduled to return to court on August 3rd to discuss the issue.