• Background:
  • Rudolf Steinberg was involved in a motor vehicle accident in 2011 and obtained five litigation loans totaling $65,500 from BridgePoint Financial Services to cover expenses.
  • The loans had compound interest rates of 20% to 24% and were secured against any settlement from Steinberg’s legal actions.
  • Steinberg settled an accident benefits claim for $1.25 million but his tort action was dismissed due to non-compliance with court orders.
• Lower Court Decision:
  • The motion judge found the loans were not unconscionable and rejected Steinberg's request to cap interest under the Unconscionable Transactions Relief Act (UTRA).
  • However, the judge reduced the interest owed by $75,000, attributing this reduction to delays caused by the COVID-19 pandemic.
• Court of Appeal Decision:
  • The Court of Appeal allowed the appeal by BridgePoint, ruling that the reduction of interest was not justified.
  • The Court held that:
    • The motion judge’s finding that the loans were not unconscionable precluded any modification of the interest under UTRA.
    • The reduction based on COVID-19 delays improperly altered the terms of the loan agreements, which the court is generally not empowered to do.
    • The judge’s consideration of COVID-19 impacts was procedurally unfair as it was not fully argued by the parties.
  • The Court set aside the reduction of interest and ordered Steinberg to pay $15,000 in appeal costs to BridgePoint.

Conclusion: The appellate court restored the full interest owed on the loans, emphasizing the enforceability of the original contract terms.