Effective January 1, 2020, the maximum amount permitted to be claimed in Small Claims Court will increase from $25,000 to $35,000. Right now, any amount above $25,000 needs to be pursued in the Superior Court of Justice.
Small Claims Court does offer many advantages: a party can be self-represented; cases move along far more expeditiously than the Superior Court; there is a greater focus on equity as opposed to strict legal interpretation; and generally, there is greater access to justice.
However, there are downsides as well, many of which condos are acutely aware of. These include: an increased likelihood of vexatious and/or meritless lawsuits; relatively small caps on cost awards; greater likelihood of bifurcated legal proceedings; and self-represented parties’ greater likelihood of disregarding common courtesies amongst legal professionals (reasonable indulgences, timely communication etc.).
We applaud the higher cap, as we believe that it will likely increase access to justice for everyday Ontarians (though there is some dispute as to whether the increase will actually lead to greater access to justice – for example, click here). However, we are of the opinion that the $10,000 increase will help facilitate more cases being addressed cost effectively and efficiently.
The limit for Small Claims Court was increased from $10,000 to $25,000 on January 1, 2010. A further increase of $10,000, ten years later, appears to be sensible and in the best interests of an overburdened justice system.
As a condo law firm that acts for many condos in Ontario, our approval of this initiative is somewhat tempered by the realization that the increase may result in condos facing a greater number of small claim lawsuits. Many of these lawsuits, especially those brought by self-represented unit owners, will automatically seek damages of $35,000 as opposed to the current de facto $25,000.
On the bright side, successful parties are entitled to cost awards for reasonable representation fees (i.e. legal costs) which are capped at 15% of the amount sought in the claim (there is a lot more to this topic beyond the scope of this post). Should unit owners unsuccessfully commence claims seeking $35,000, the limit on representation fees has effectively increased by $1,500.
Time will tell exactly how the increased claim amount will play out and its impact on condos and unit owners. We, at Lash Condo Law, will be closely watching.
