Now that the monetary limit of the small claims court in Ontario has increased to $25,000, renewed interest in this court seems likely. Although there are several factors that should be considered when deciding whether or not to pursue a claim in small claims court, an important consideration is what costs a successful party may be entitled to recover.
The following discussion is based on a paper I wrote entitled Costs in the Small Claims Court.
Can a party get an award for costs in the small claims court?
A qualified “yes”. Rule 19 of the Rules of the Small Claims Court (“Rules”) is clear that while a successful party is entitled to claim costs and disbursements, such an award is at the discretion of the judge. It is not a guarantee.
What is the usual award for costs in the small claims court?
In general, a successful party is entitled to recover their “reasonable disbursements” and, if represented by a lawyer, student-at-law or agent, a “reasonable representation fee”.
Examples of claimable disbursements include expenses for travel, accommodation, photocopying and experts’ reports. Under the Rules, certain disbursements, like for example, the cost of preparing a claim, are capped. In the case of preparing a claim, the maximum amount awarded is $100.
With respect to a reasonable representation fee, the general rule is that the maximum amount awarded is $3,750. Of course, this is always subject to the discretion of the court.
If a successful party represents themselves, they can request a maximum of $500.00 for their “inconvenience and expense”.
Are additional or increased costs ever awarded?
Again, this is at the discretion of the court. One instance where a court may award increased amounts for the representation fee is where a successful party “beats” their offer – i.e. the successful party offered to accept $3,000 from the other party in order to settle the claim, this offer was rejected by the other side and then at trial, the successful party was awarded $4000 by the court.
A party can also seek costs not exceeding $100.00 if they are successful on a motion.
A court may also award a “penalty” in the form of increased costs if it is satisfied that the other side has acted unreasonably or unduly complicated or prolonged the action.
Although not common, there are also provisions for a party to see costs associated with attending a settlement conference (max of $100)