Synopsis: New Brunswick Court of Queen’s Bench orders a wrongdoer (defendant) to pay the interest charged to an injured claimant that accrued in order to finance the cost of the lawsuit. This doesn’t make this decision law in British Columbia at this time, but no doubt this issue will soon be addressed in BC’s Supreme Court. (case: Bourgoin v. Ouellette et al, N.B.R. (2d) TBEd. FE.013, February 6, 2009 [The New Brunswick Decision])
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Advancing a personal injury case almost always requires spending some amount of money. The money spent to advance a claim/lawsuit is called disbursements. How much money needed depends on the case.
Example #1: a car accident case where fault is in dispute and the injuries claimed are a head injury, the amount of disbursements will be very high – into the tens of thousands, and perhaps higher.
Example #2: contrast example #1 with a case where the injured person was rear-ended (i.e. fault is then not in dispute), and the injury was a neck strain that healed within 12 months. The second example would require a lot less in disbursement money.
What are examples of disbursements?
- office expenses (photocopying, courier, court filing fees, fax charges, mileage, etc.). These are relatively minor compared to the expert costs.
- expert costs – this is where the costs add up. To prove injuries and the future of those injuries, medical opinions are needed. Doctors don’t provide medical opinions for free. Other experts could include engineers, occupational therapists, economists, and others, depending on the case.
- MRI / CT scans and perhaps other tests.
The problem faced by many injured persons the lack of money to pay for any disbursements. Most people don’t have a spare $2,000 let along tens of thousands lying around to pay for a lawsuit. Lawyers may advance the funds to pay for these disbursements (we will in most cases – especially if fault is not in dispute). However, lawyers often have to borrow money to pay for their clients’ disbursements. This means the lawyers then charge interest to their clients (because the lender charges interest to the lawyers).
The New Brunswick Decision ordered the defendant to refund the interest charged to the plaintiff incurred to finance disbursements*. The interest rate was 2.4% compounded monthly. The Court found that the plaintiff had no other option but to borrow money to finance his disbursements. The decision was based on the argument that in order for the plaintiff to have access to justice and enforce his rights, he had to borrow the money.
Access to justice is an ongoing issue in British Columbia, and no doubt other provinces. This issue came to light in the media when the case against the BC ferries settled before trial because the cost of going to trial was too much for the plaintiffs.
Of course a similar decision in British Columbia wouldn’t address the high cost in BC to actually pay the trial fees. That’s a separate issue – an issue that our provincial government must address. However, if the BC courts decided the issue similarly to The New Brunswick Decision, in my view, access to justice would be improved.
*Note: this decision doesn’t mean that wrongdoers in British Columbia must pay the interest charged to finance disbursements (as of this article date). However, courts in one province often consider decisions of courts in other provinces. The New Brunswick Decision may be persuasive when this issue is addressed in the BC Supreme Court – time will tell.
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