After a trial lasting more than 140 days in this class action, the defendants were successful in beating their offers to settle, and as a result they obtained a costs award that totaled in excess of $3.4 million. The plaintiff resided in Poland and was impecunious. During the course of the litigation he received advances from four different litigation loan providers. It was estimated that the outstanding loans had an accrued principal and interest owing in excess of $6 million. The defendants, believing they would not recover against the plaintiff, sought to recover their costs award against the litigation loan providers since their loans allowed the litigation to proceed and may have prevented settlement due to high interest rates. Justice Edwards declined to make any award against the non-party litigation providers in this case, but acknowledged that litigation loan providers may be liable for
costs awards in proper circumstances.
Justice Edwards directed that loan documentation must be listed in a plaintiff’s Schedule B. By listing it there, the defendant is put on notice of a potential claim on the loan interest if the plaintiff is awarded costs at trial. In certain cases (such as personal injury actions) if a defendant refuses an advance payment to the plaintiff, the defendant is more likely to become liable for interest on the plaintiff’s litigation loan as a disbursement. Second, the defendant should put the loan provider on notice that they may become responsible for costs as soon as possible. In the present case, the defendants did not provide notice to the loan providers until after trial despite knowing of the loans for years prior.