LeBlanc v Doucet: Recovery of Interest in Cost Awards for Personal Injury Claims

In a unanimous decision, the New Brunswick Court of Appeal in LeBlanc v Doucet and the New Brunswick Power Corporation, 2012 NBCA 88 held in favour of a plaintiff’s ability to recover interest on a loan used to pay for legal fees in a personal injury claim. On September 23, 2004, Francis LeBlanc was seriously injured when a van driven by Doucet entered his lane on a turn and collided with his motorcycle. At the time of the accident, LeBlanc was a 17-year-old student living with his parents. Unable to pay the cost of litigation, LeBlanc secured a loan from a bank, Seahold Investments. Over the course of the litigation, the loan accrued $14,158 in interest. Whether or not he should be able to recover the interest fees was the subject of his appeal.

Prior Proceedings

In a prior proceeding, the Court of Queen’s Bench found Doucet fully liable for the accident. Doucet was directed to pay costs of $20,000 plus “taxable disbursements to date” (para 11). A clerk assigned to assess the disbursements found that several items, including interest owed on the Seahold loan, should not be recovered pursuant to the Rules of Court.

Rule 59, s. 2 of Tariff D of the Rules of Court outlines disbursements recoverable from the other party. While none of the sections refer specifically to interest, LeBlanc argued that interest should be recoverable under s. 2(14), a catch-all allowing for the recovery of “ the all other reasonable expenses necessarily incurred, when allowed by the assessing officer.” The clerk found that even though LeBlanc would not have had the financial means to pursue the action without the loan, the recovery of interest was not authorized by Rule 59 or in case law.

LeBlanc appealed to the Court of Queen’s Bench. The Court found that in the absence of existing case law determining recovery of interest, the clerk was required to consider LeBlanc’s arguments. However, the Court upheld the clerk’s decision because the interest did not originate from direct costs associated with the claim, but from the litigant’s “financial circumstances” (para 26). Therefore, the interest was not sufficiently connected to the costs paid to constitute “disbursement” (para 26). The argument presented by the Court is unconvincing. Without the loan, LeBlanc would have been unable to enforce his rights in a case where the defendant was found wholly liable. Therefore, the interest is as directly correlated to the claim as the money of the loan itself, which was indisputably considered a disbursement warranting recovery.

Court of Appeal

The Court of Appeal was cognizant of the access to justice issues at play. With no precedent in Canada, the Court noted the reluctance of commonwealth courts to rule against similar cases. In deciding to allow the recovery of interest, the Court explained that the term “expense” is left undefined in the statute. The Court also referenced the broad test for disbursements articulated in Van Daele v Van Daele, 1983 CanLII 720 (BCCA):

The proper test…is whether at the time the disbursement or expense was incurred it was a proper disbursement in the sense of not being extravagant, negligent, mistaken or a result of excessive caution or excessive zeal, judged by the situation at the time when the disbursement or expense was incurred (para 11).

The Court found that the “loans taken out by Mr. LeBlanc were necessary to prevent a most unjust outcome for his legal dispute with the respondents: the settlement of his claim for a pittance or perhaps even abandonment” (para 38). This meant that the expenses could fall within the meaning of s. 2(14). On the question of whether the expense was reasonable, two factors informed the Court’s decision. First, there was no evidence of bad faith on the part of Seahold Investments. Second, LeBlanc could not be faulted for the rate charged because he tried to secure a lower interest rate for his loan at two other banks. Therefore, the onus was on the respondent to demonstrate that LeBlanc’s interest costs were unreasonable. In the absence of proof that the interest payment was unreasonable, the respondent failed to discharge the onus of proof and the Court found in favour of LeBlanc.


The ability of litigants to bring cases against culpable parties underpins the legal system, but most plaintiffs cannot afford the cost of extended litigation, regardless of the merit of their claim. In 2009, Chief Justice McLachlin addressed the conundrum faced by the legal profession as costs continue to rise without a corresponding increase in the ability of Canadians to pay:

[I]n order to maintain confidence in our legal system, it must be, and must be seen to be accessible to Canadians. Yet the time and cost it takes to get a matter to trail is moving beyond the resources of the average Canadian and the number of litigants who represent themselves is on the rise. We cannot allow this to continue (Bourgoin v Oullette et al, [2009] 343 NBR (2d) (QB)).

In a series of events repeated across Canada, an injured party sought redress through the legal system. Regardless of the validity of his claim, he realized that he would not be able to pay for extended litigation on his own. There was a market solution but it necessitated further indebtedness. In the foreseeable future, the cost of legal fees will continue to increase. This is a symptom of forces far beyond the control of individual lawyers and even the Chief Justice of Canada. The possibility of recovering interest on a loan secured to pay for legal fees is a good first step towards greater accessibility for Canadians.

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