Costs in Small Claims Court: Who Pays What
Winning in Small Claims Court does not mean getting back everything you spent. Costs are limited by law, they are awarded at the court's discretion, and some of what you spend will not be recovered.
- A successful party can usually recover reasonable disbursements, such as filing and service costs, with some dollar limits in the rules.
- A representation fee for a lawyer, paralegal or agent is allowed only if the court awards it, and it must be reasonable.
- By statute, costs other than disbursements generally cannot exceed 15% of the amount claimed, unless the court needs to penalize a party.
- A self-represented winner can be compensated for time and expense, but only up to a modest limit.
The main pieces
- Disbursements: the out-of-pocket costs of the case, such as the claim filing fee, the cost of serving documents, and reasonable photocopying, travel and expert report costs. The rules set dollar limits for some of these.
- Representation fee: money toward what a successful party paid a lawyer, paralegal or agent. It is not automatic and the court sets an amount it considers reasonable.
- Compensation for a self-represented party: for inconvenience and expense, within a limit set in the rules.
- Penalty for unreasonable behaviour: a separate power to order compensation when a party unnecessarily complicated or prolonged the case.
The 15% limit
The Courts of Justice Act says that costs in Small Claims Court, other than disbursements, must not exceed 15% of the amount claimed or the value of the property sought, unless the court considers it necessary in the interests of justice to penalize a party. So on a $10,000 claim, costs apart from disbursements are generally capped at $1,500, however much the successful party actually spent.
How a court decides
- Who won, and by how much compared with what was claimed.
- Whether the amounts claimed for fees are reasonable for the work involved.
- How each side behaved, including whether anyone missed deadlines or ignored a reasonable offer.
- Whether a formal offer to settle was made and what the result was against it.
Offers to settle and costs
A formal written offer to settle can affect who pays costs. If you win, or if the court's result is as good or better than an offer you made, that can matter when costs are decided. If you receive an offer, consider it carefully and, if you reject it, be ready to explain why. A short written offer sent early gives you a better chance of costs protection.
Practical steps
- Keep every receipt, with dates, for anything you may claim as a disbursement.
- Keep a record of the time you spent and what for, in case you need to ask for compensation as a self-represented party.
- Ask for costs at the end of the trial or hearing, and have your figures ready on a short list.
- Before suing, work out whether the likely recovery justifies the cost, once the cap is considered.
Common questions
Will the other side pay all of my paralegal's fees?
Rarely. A successful party can ask for a reasonable representation fee, but the 15% limit and the court's discretion usually mean only part of the fees are recovered.
Do I get costs if I settle?
Only if the settlement says so. Settlement terms usually cover costs, so agree on them in writing.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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