PROVING THINGS 226: RECOVERING INTEREST ON DISBURSEMENT LOANS: THE NEED FOR EVIDENCE
I am grateful to barrister James Miller for sending me a copy of the decision of District Judge Corkhill in the case of Gill -v- Barnsley Canister Company Ltd, a copy of which is available here Gill v Barnsley Canister & Others – APPROVED Judgment – 15th November 2021 v1 (1). The judge decided that the court had a discretion to order that the receiving party on assessment can recover disbursement loan interest that was paid in order to fund disbursements in the case. However evidence needed to be placed before the court that the steps taken had been reasonable and necessary. In the absence of evidence the interest was not recoverable.
” I am not saying I would need to do a trawl of the claimant’s financial circumstances, but I think the court is entitled to be provided with some evidence from the claimant to say that they had no way of funding the litigation or funding the disbursements without such a loan, that the loan he took out was the only available loan to him and that, as a consequence, the interest rate charged was the only rate of interest he could take out in the loan market. I do not think it is asking too much to expect to see a witness statement with some additional information as opposed to the court being asked to make an assumption that the claimant fell within a class of litigant of modest means.”
The claimant had brought an action for personal injuries against several defendants, for loss of hearing arising from exposure to noise. The case settled for £2,032.40. The judge was assessing costs and, in particular a claim for interest of £707.08 arising from a funding loan.
THE COURT’S ABILITY TO AWARD INTEREST IN THESE CIRCUMSTANCES
The judge found that the court had power to order interest on costs from a date before judgment. The question the judge addressed was whether the court should exercise that discretion in the claimant’s favour.
THE JUDGE’S DECISION: INSUFFICIENT EVIDENCE TO AWARD INTEREST
The judge held that evidence was needed to justify both the taking out of the loan and the unusually high interest rate. In the absence of evidence the interest was not recoverable.