On January 1, 2020, changes were implemented to the Simplified Procedure under Rule 76 of the Ontario Rules of Civil Procedure, as well as in Small Claims Court. The changes were brought to increase access to justice for individuals and businesses by reducing the cost of resolving disputes.
New Limit in Small Claims Court
From now on, all claims of $35,000 or less are brought to Small Claims Court, an increase from the previous $25,000 limit. The small claims process is much more streamlined than a proceeding in Superior Court – after pleadings are closed, the parties schedule a settlement conference, and if a matter does not settle, a hearing is scheduled. Starting an action in Small Claims Court is also less risky for the potential plaintiff – if a plaintiff loses, the worst-case scenario is that this plaintiff will have to pay 15% of the award, a maximum of $5,250 in Costs to the other party. This limited risk can be attractive to plaintiffs with limited resources.
New Limit for Simplified Procedure
All claims higher than $35,000 and under $200,000 must now follow the Simplified Procedure, an increase from the previous $100,000 limit. Other changes to the Simplified Procedure include capping Costs awards to $50,000, capping disbursements to $25,000, implementing expedited deadlines, and limiting the trial to 5 days, among other changes.
Given the general apprehension surrounding litigation, these recent changes will be attractive to potential plaintiffs wanting more certitude on legal fees, potential liability, and time, and may result in more actions being commenced by those who may have otherwise just let it go. Plaintiffs with claims in the higher dollar figure ranges may choose to lower their claims in order to fall under the Simplified Procedure or the Small Claims Court. This means more actions being brought to Small Claims Court or under the Simplified Procedure. Given the capped Costs liability, we may see plaintiffs less likely to settle and more matters being taken to trial. In turn, this new reality could impact the way employers address current or potential disputes with their employees. Only time will tell!
If you’re looking for counsel on a litigation matter, please get in touch!