The law has been likened to a “Living Tree” meaning that it grows and evolves in response to societal values and needs. Increasing access to justice is one such area. In the recent case of Chandi v. Atwell, 2013 BCSC 830, access to justice for plaintiffs in civil cases has been affirmed by allowing for the recovery of disbursement interest.

A long-established legal principle is that a successful litigant should be compensated or “made whole” for the damages sustained as a result of the wrong done by the defendant, and also should receive compensation for legal fees and disbursements [i.e. expenses] reasonably incurred in the prosecution of the claim. In many instances those disbursements can be significant. In the realm of personal injury litigation disbursements can include medical reports from family physicians, treating medical specialists, medical specialists retained by the plaintiff’s lawyer, engineering experts, cost of care experts, and economists. If the case proceeds to trial disbursements on a complex case can be over $100,000.

Most plaintiff’s cannot afford to pay for these disbursements and so are forced to borrow directly, or through their lawyer, to fund the disbursements. Relatively recently, the law has evolved, across Canada, to allow for recovery of that interest from the defendant. Before, the recent evolution in the law that interest would be paid out of pocket by the plaintiff and not be recoverable. The evolution of the law has been based squarely on access to justice principles as enunciated by several courts.

The firm of Hoogbruin & Company was privileged to represent the infant Arshdeep Chandi in his case. Judge Savage sets out the basic background facts beginning at page 5:

“[6] In Chandi, the five-year-old infant plaintiff was injured in a motor vehicle accident that occurred on July 10, 2004. He was a lap-belted passenger in a motor vehicle that was broad-sided by another vehicle while in the midst of a left turn.
[7] The infant plaintiff lived in his grandparents’ home with his parents and brother and sister, and was going to start elementary school in the fall. The grandparents were elderly and had long been retired.
[8] The infant plaintiff’s parents were both passengers in the motor vehicle and were also injured in the accident. The infant plaintiff’s father, an immigrant from India, was a taxi driver. He had lost an arm prior to the accident. He had to be cut out of the vehicle with the “Jaws of Life” and was hospitalized for seven days. Prior to the accident, he was able to use a myoelectric prosthesis as well as cosmetic hand prosthesis. Since the accident, he has not been able to return to work and is on CPP disability.
[9] Prior to the accident, the infant plaintiff’s mother had worked inside and outside the home. At the time of the accident she was a line cook. She was injured in the accident and was off work for seven to eight months. Her income from 2001 to 2006 ranged from between $6,000 to $13,000 before taxes.
[10] Given the injuries to the other occupants of the vehicle, policy limits were engaged.
[11] The infant plaintiff’s main symptoms were psychological, behavioral and cognitive. He was diagnosed with post-traumatic stress disorder and major depression. There was conflicting evidence over whether the infant plaintiff suffered brain injury.
[12] The treating psychiatrist and head of the Department of Psychiatry at BC Children’s Hospital recommended weekly psychotherapy provided by a psychiatrist, child psychologist or mental health team. The trial was set for 15 days but settled after mediation on April 20, 2010, for $900,000 new money, plus taxable costs and disbursements. An advance in the amount of $10,000 was negotiated at the mediation for immediate treatment purposes.
[13] As an infant, the settlement had to be approved by this court. The Public Guardian and Trustee approved the settlement on September 27, 2010. The British Columbia Supreme Court approved the settlement by an order made after application on February 8, 2011. A copy of the order is attached as Schedule “A”. The order says:
1. The infant Arshdeep Chandi’s settlement of his claim be approved for the sum of $900,000 new money, plus $23,801.09 old money, taxable costs and disbursements.
[14] The interest claimed by the plaintiff for funding disbursements, as set out in the bill of costs, is $2,859.71 to the law firm (the “Law Firm”) and $25,668.92 to a third-party lender (the “Third-Party Lender”). The plaintiff claimed that the interest he incurred in the course of obtaining disbursements was recoverable as a “taxable cost” under the settlement agreement. In preparing for litigation, the plaintiff incurred disbursements in order to obtain necessary evidence on liability, the extent of injuries, and the quantification of damages. As the plaintiff and his family were of limited means, they required assistance in order to fund the disbursements.”

Mr. Justice Savage, in Chandi, upheld an earlier Judgment by Mr. Justice Burnyeat in Milne v Clark that held that interest on disbursements was recoverable by the plaintiff against the defendant. Mr. Justice Savage states at page 14:

“[44] Mr. Justice Burnyeat’s reasons apply with equal force whether the interest charged is paid to a financier, a service provider, or a solicitor. In all of these cases, the interest charged must have been necessarily or properly incurred in the conduct of the proceeding. The registrar may then “allow a reasonable amount for those disbursements”. Provided that the interest payment is a reasonable amount, it is recoverable whether it is charged by a service-provider, a financier, or a solicitor.”

Determination of the rate of interest recoverable was referred back for hearing before the Registrar.

This decision could have broad implications for access to justice for plaintiffs in civil litigation, in particular victims of automobile crashes who can now take comfort knowing that if they are forced to incur interest debt on loans for disbursements that debt [or at least a portion of it] will be recoverable as part of the claim.

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