This current law review relates to a motor vehicle accident injury case in which the claimant sought to recover the interest she was required to pay on advance settlement loans after being injured (Davidge v. Fairholm,2014 BCSC 1948). These loans were advanced to her by her lawyers to help her pay for out of pocket expenses not covered by the Insurance Corporation of British Columbia, ICBC. The injury claimant said that the loans were necessary to enable her to pay her living expenses because she was unable to work due to her car accident related injuries.The personal injury lawyer paid interest on loans to benefit the client.
Unfortunately, there was little to no evidence about the the car accident injury loans at trial. The claimant borrowed about $170,000 in total and said that the interest on the loans totaled about $41,900.00. There was no evidence however as to how such interest was calculated, whether such interest had been paid, or whether the payment of interest will be enforced by the lenders. The claimant earned about $127,000 after her accident and it appeared that the loans were not required as a result of the car accident. The Court refused the compensate the claimant for this costs stating:
 In my view, assuming that the interest is paid, the interest on a loan to fund general living expenses including treatment costs during the course of litigation is not recoverable as damages where, as here, it is not reasonably foreseeable and arises because of the impecuniosity of the plaintiff. See: Campbell v. Swetland, 2012 BCSC 423, Leisbosch, Dredger v. Edison S.S. (Owners),  A.C. 449;Choma v. Canadian Vehicle Leasing Ltd.,  B.C.J. No. 1036; and Jones v. Taylor,  S.J. No. 632.
The Judge also refused to award the interest paid on case expenses, or disbursements as was the case in Chandi v. Atwell, 2013 BCSC 830. “There was no evidence at trial as to the amount of the loans that may have been borrowed to fund particular disbursements nor was there evidence as to whether such disbursements were necessary to the litigation or reasonable in amount.”
The claimant was only entitled to pre-judgment interest pursuant to the Court Order Interest Act on her net past income loss and out of pocket expenses.
Posted by Vancouver Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.