Increases Are Coming to the Monetary Jurisdictions of the Small Claims Court and for Rule 76 Simplified Procedure Actions Effective January 1, 2020

I.          Increases in Small Claims Court and Simplified Procedure Claim Limits

A recent announcement by the Ontario Ministry of Attorney General has advised that, effective January 1, 2020, a party will be permitted to claim up to $35,000¹ in Ontario Small Claims Court proceedings, and up to $200,000² in Rule 76 Simplified Procedure proceedings in the Ontario Superior Court of Justice.³

Ontario Regulation 344/19, which amends the Rule 76 Simplified Procedure effective January 1, 2020, also includes a number of other changes to the Simplified Procedure, some of which are highlighted below.

II.         New Limitations on Cost Recovery in Simplified Procedure Actions

The amendments also include a new restriction on the quantum of costs which may be recovered by a party in a Rule 76 Simplified Procedure action commenced on or after January 1, 2020. Specifically, in such proceedings, no party will be permitted to recover costs exceeding $50,000, or to recover disbursements exceeding $25,000, exclusive of HST.⁴ These restrictions will not apply in the case of an action commenced before January 1, 2020.

III.        Examination for Discovery Time Limits Increased

Currently, the time for oral examinations for discovery to be conducted by each party under the Rule 76 Simplified Procedure is limited to a total of two hours. With the amendments to Rule 76, this time limit will now be increased to three hours effective January 1, 2020.

IV.        Trials Shall Now Be Limited to 5 Days for Rule 76 Simplified Procedure Actions

To balance the expanded scope of the Simplified Procedure with its purpose as an expedient means to resolve disputes, the amendments will now place a 5-day limit on Rule 76 Simplified Procedure trials, and no longer distinguish between ordinary trials and summary trials, while instead prescribing a new procedure⁵ that applies to all trials of Simplified Procedure actions.

V.         Continuing Existing Actions in the Small Claims Court and Under Rule 76

Parties to litigation may be wondering whether existing Simplified Procedure claims between $25,001 - $35,000 may be transferred to the Small Claims Court as of January 1, 2020, and whether plaintiffs having existing actions for claims between $100,001 - $200,000 may “opt in” to the Simplified Procedure as of January 1, 2020. In short, the answer is “yes”.⁶

In determining whether it will be appropriate to transfer such an existing Simplified Procedure action to the Small Claims Court, or to continue an existing Ontario Superior Court of Justice action pursuant to the Rule 76 Simplified Procedure, parties will need to consider several factors, including: (i) the current stage of the proceeding, and the costs which have already been incurred; (ii) the need for oral examinations for discovery, and the time required for them, which examinations are not available in the Small Claims Court; (iii) the restrictions on costs recovery in the Small Claims Court, where the general rule is that no party is permitted to recover costs exceeding 15 percent of the amount of the claim, exclusive of disbursements;⁷ and (iv) the amount of trial time needed.

How these upcoming amendments will impact wait times in Ontario Small Claims Courts, and in the Superior Court of Justice, remains to be seen.

¹ Currently, the monetary limit for Small Claims Court actions is $25,000, exclusive of interest and costs.

² Currently, the monetary limit for Simplified Procedure claims under Rule 76 of the Ontario Rules of Civil Procedure is $100,000, exclusive of interest and costs.

 ³ Ministry of the Attorney General, News Release, “Ontario Making It Faster, Easier, More Affordable to Settle Small Claims” (October 23, 2019); see also Ontario Regulation 344/19.

⁴ The existing adverse cost consequences under rule 76.13 for misuse of (or failure to use) the Simplified Procedure will continue to apply.

 ⁵ See the new trial procedure included in subrules 76.12 (1) and (2) of the Rules of Civil Procedure at Ontario Regulation 344/19.

⁶ In the case of the former, subsection 23(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 permits an action in the Ontario Superior Court of Justice to be transferred to the Small Claims Court with all parties’ consent. In the case of the latter, see subrules 76.02(7) and (8) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which governs when a plaintiff may continue an existing action under the Rule 76 Simplified Procedure.

 ⁷ Courts of Justice Act, R.S.O. 1990, c. C.43, s. 29.