Introduction

Currently, in Canada, the case law varies from province to province on whether or not interest incurred from a litigation loan can be recovered by a successful Plaintiff. With the Supreme Court of Canada recently denying leave to appeal from a British Columbia Court of Appeal decision on this issue, it will likely remain that way for now.

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New Brunswick

The New Brunswick Court of Appeal has concluded that interest incurred on a litigation loan is a proper disbursement under the relevant legislation in that province and can be recovered under a costs award. This decision is binding on all of the lower courts in that province. While it is not binding on courts in other provinces, it can be persuasive authority.

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Ontario

To date, the Ontario Court of Appeal has not weighed in directly on this issue, either way. Therefore, it is unclear where the courts stand on this issue in Ontario; however, a recent lower court decision shows a movement closer to British Columbia’s stance of non-recovery rather than New Brunswick’s.

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Alberta

Like Ontario, the Alberta Court of Appeal has not weighed in on this issue. The reported lower court show a reluctance to award interest as a disbursement where the facts do not justify it.

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British Columbia

While there are previous decisions in British Columbia which awarded interest on litigation loans as a disbursement, they are no longer “good” law after the recent British Columbia Court of Appeal decision in Mackenzie v. Rogalsky which reflects the law as it currently stands in that province:

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