Registrar declines to reimburse plaintiff for cost of “Litigation Insurance”

In reasons for judgment released today, the District Registrar in Wynia v. Soviskov, 2017 BCSC 195, considered the novel issue of whether a defendant is liable to pay to the successful plaintiff the cost of a “litigation insurance” policy purchased to protect the plaintiff from having to pay the defendant’s costs and disbursements in the event the plaintiff were to lose at trial.  In finding that “litigation insurance” is not a recoverable disbursement, District Registrar Nielsen wrote as follows:

[4]             The plaintiff has raised the novel issue of whether the cost of an insurance policy obtained by the plaintiff to insure against own disbursements, and opponents’ costs and disbursements, in a lost or abandoned court case, is a recoverable disbursement pursuant to SCCR 14-1 (5). 

[5]             The defendants object to this particular disbursement.

[6]             In British Columbia, to be recoverable as a disbursement SCCR 14-1(5) provides that the disbursement must have been necessarily or properly incurred in the conduct of the proceeding.

[7]             In my view…the cost of insurance coverage is not a proper or necessary disbursement incurred in the conduct of the proceeding. No doubt it provides a measure of financial comfort to the plaintiff, however, it does not arise from the exigencies of the proceeding and relate directly to the direction, management, or control of the litigation used to prove a claim against the defendants. Accordingly, the cost of the insurance coverage is disallowed.

The text of the full decision can be found here:  http://www.courts.gov.bc.ca/jdb-txt/sc/17/01/2017BCSC0195.htm