The Function of the Small Claims Court
The Small Claims Court is a forum meant to reduce the strain of civil litigation on the Superior Court of Justice in Ontario, and promote simpler and more efficient resolution of relatively minor disputes. Briefly put, a minor dispute in this case is one where no more than $25,000.00 worth of cash or property is at issue between the parties. In practice, this means two things.
The Small Claims Court can only deal with cash and property.
First, the Small Claims Court cannot issue an injunction. That is, it cannot order a party to do, or to stop doing, something. For example, in cases where the plaintiff (claimant) has been defamed, the Small Claims Court can order the defendant to pay the plaintiff some money to compensate for the defamation, but it cannot order the defendant to publish an apology, delete the article or retract a statement. Such an order can only be obtained through a higher court.
The $25,000.00 is not, in some respects, absolute.
Second, the $25,000.00 limit is a bright line when it comes to how much a judge can award a given party, but it is not an absolute prohibition from registering a plaintiff claim in cases where the plaintiff’s losses or damages exceed this amount. The plaintiff can simply agree that even though her claim is for more than $25,000.00, she will forego the excess amount and be satisfied with $25,000.00 only, in order to have the case tried in Small Claims Court. This may make sense, as the additional sum may not be significant enough to warrant the lengthier and more complex proceedings in the Superior Court of Justice.
Small Claims Court Complexities
Although Small Claims Court procedures are meant to be simpler and more efficient than those in the Superior Court of Justice, there are, nonetheless, two reasons why the complexity of Small Claims Court proceedings ought not be underestimated:
Small Claims Court procedure rules are still lengthy and complex.
Ontario Regulation no. 258/98, that is, the Rules of Small Claims Court, contains 22 chapters which regulate every aspect of the Small Claims Court proceedings from how to initiate the Small Claims Court lawsuit to the enforcement of Small Claims Court judgments. Moreover, a recent addition to the Rules of Small Claims Court says that if any issue is not covered by the Rules of the Small Claims Court, the Small Claims Court can apply the Rules of Civil Procedure which are used in the Ontario Superior Court of Justice.
Knowledge of substantive law and trial skills are still required.
It is not uncommon for an unrepresented Small Claims Court litigant to believe that because the Small Claims Court proceedings are simplified as compared to the Superior Court, it would be sufficient to simply honestly tell a Small Claims Court judge his or her story to get the desired result. This may be sufficient in some cases. However, if the opposing party is represented by a lawyer or paralegal, it is almost never enough. Examination and cross-examination skills, as well as knowledge of the respective substantive law and the law of evidence are necessary to succeed, especially when the other party has professional representation. At the end of the day, the judge will make a decision based on what he or she hears in the courtroom. Often, an unrepresented litigant will not know which part of his or her story are important to emphasize, how to get information you need from a witness, will give up procedural or evidentiary advantages, or fail to object to improper actions taken by another party. This is especially so when the case is not about a simple loan but about a complex dispute that arises from a real estate transaction or construction/renovation contract.
When it comes to making the decision about retaining representation in Small Claims Court, some litigants believe that the legal cost they incur by hiring a paralegal is not compensated. On the other hand, some think that they can get back any and all legal expenses they incur. Neither is correct. In accordance with the rules, the Small Claims Court can (and does) award a litigant the cost of hiring a paralegal, but only up to 15 percent of the claim amount. This means that the winning party in a $20,000.00 case can get as much as $3,000.00 for legal expenses, over and above the sum they win. All out-of-pocket expenses such as court fees, photocopies, expert’s fees and more are compensated in their full amount.
If you are involved in a Small Claims Court dispute and are thinking of retaining representation, please do not hesitate to contact us for a free case assessment.