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Court Addresses Disbursement Interest

In the recently published case of Chandi v. Atwell, 2011 BCSC 1498, District Registrar Cameron addressed the issue of whether interest on disbursements can be recovered by a successful litigant. In this case, the infant plaintiff settled his case for $900,000. The interest on the plaintiff’s disbursements amounted to $25,668.92. The plaintiff’s law firm had financed the required disbursements for the plaintiff’s case through a private lender who changed 12% interest compounded annually. The plaintiff’s contingency fee agreement in the case obligated the Plaintiff to pay for disbursement interest whether that interest might be owing to the law firm or a third party funding source.


Upon reviewing the recent authorities on the subject, the Registrar allowed the plaintiff to recover a portion of the interest on his disbursements at the interest rate set by the Court Order Interest Act (currently 3.00%). In doing so the Registrar said the following:


[73] While the current state of the law mandates that I make some allowance for the interest expense in my view I am not bound to award full indemnity for the amount of interest charged to the Plaintiff…


[74] In the law of costs it is still only in the relatively rare case that full indemnity is provided to the successful party. Only disbursements that are necessary and reasonable in amount are recoverable.


[75] In my view the Registrar should endeavour, wherever possible, in assessing the amount to allow for a specific type of disbursement to strive for consistency unless the application of that principle would work a real hardship or unfairness in a particular case. To attain that consistency I will make an allowance for disbursement interest based upon Registrar’s rates with the calculation of the total amount to be akin to the calculation of interest payable on special damages pursuant to the relevant provisions of the Court Order Interest Act.


In the also recently published decision of Wittrich v. Bob, 2011 BCSC 1471, District Registrar Cameron disallowed the travel costs of the defendant’s lawyers, whose office was in Abbotsford, for attending a fifteen day trial in New Westminster. The defendant was claiming approximately $12,000 in costs for travel and lodging. The plaintiff’s lawyer argued that it was not proper or reasonably necessary for ICBC to hire lawyers from Abbotsford to defend a case that was to be tried in New Westminster. In the result, the Registrar agreed that it was not reasonable or necessary for ICBC to have hired out of town counsel to handle the case. In doing so he said the following:


[17] The onus is on the Defendants to show that it was reasonable and necessary to retain “out of town” counsel and I am not persuaded that the onus has been met. ICBC made a strategic decision to retain a law firm that was thought to be “right” for this case. In my view it is not reasonable to visit the addtional cost flowing from that choice upon the Plaintiff.


[18] As I have disallowed the claim or 40 units under tariff item #36 it follows that I also disallow the related travel expenses for mileage, parking and lodging expenses.


[19] If I had allowed any recovery under tariff item #36 I would not have awarded any amount for the lodging expenses amounting to approximately $6,000. Mr. Lester in his submissions said that it was more convenient and efficient for himself and his co-counsel to stay overnight in New Westminster during the trial rather than to drive back and forth to Abbotsford. While that may have been so the opposing party is not liable for costs incurred by the successful party as a matter of convenience. Convenience is considered a luxury in the law of costs…


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