This year brought sweeping changes to Ontario’s Small Claims Court. While virtually all of the discussion centred on the increase in the claims limit to $25,000 from $10,000, what slipped under the radar were the various rule changes.

Perhaps the most significant rule modification was to disallow alternative service of a plaintiff’s claim by regular mail and instead obligate service by registered mail or courier, both with verified receipt of the defendant.

In my opinion, this rule has turned the Small Claims Court into a defendant’s paradise for a number of reasons.

As a result of the changes, defendants are evading service and getting away with it. I have seen evasion of service increase significantly since the new rules took effect. Whereas in the past plaintiffs could swear an affidavit of service proving a claim was served by mail, they must now obtain the defendants’ verified signature.

This means that even if their spouse signs for the registered delivery of the claim, defendants won’t have to defend and can now ensure they avoid signing for unanticipated registered mail.

In fact, I had one such case in which my client served a defendant by registered mail and, because the defendant’s wife signed for it and thereby tipped him off, my client had to obtain the services of a process server.

In response, increased service costs are discouraging plaintiffs. Because of the difficulties with serving a defendant, I know of many potential plaintiffs who are discouraged from starting a lawsuit because of the costs they now face.

While I believe process servers play a vital role in litigation when necessary, it’s unfair to burden plaintiffs with the added cost of having to hire one. Of course, it’s a burden that didn’t exist prior to January.

Moreover, in cases where professional process servers can’t effect service, plaintiffs have to worry about spending additional legal fees on motions for substituted service.

In fact, one Small Claims Court clerk verified this concern by confirming that, to her knowledge, there has been a sharp increase in motions for substituted service since the rule changes this year.
In addition, plaintiffs are in the dark as to what constitutes proper service.

In the past, they could serve defendants at their place of business as their last known address. But now, according to the rules of the Small Claims Court, one may only serve a claim by registered mail or courier at the defendant’s residence.

But what happens if you only know where the defendant works?
A conversation with one Small Claims Court staffer revealed that many clerks would accept registered mail or courier to a defendant’s business.

When I asked how this can be as it’s contrary to the rules, the clerk had no answer for me. When I asked if this means that some clerks will allow such service while others won’t, the clerk answered in the affirmative.

Apparently, service of a claim by registered mail or courier has now become a guessing game as to whether or not the court will accept it.

Finally, defendants can still set aside default judgments with ease. With increased strictness on serving claims, one would think that at least the deputy judges have gotten tougher on defendants who attempt to set aside default judgments by alleging that the claims never got to their attention.

Unfortunately, that hasn’t been the case. In my experience, defendants are just as likely to succeed in a motion to set aside a default judgment as they were prior to the rule changes.

At the same time, despite plaintiffs’ increased service costs, I haven’t noticed any increase in the amount of costs awarded to plaintiffs even in cases in which defendants succeed in having the default judgment set aside.

It’s difficult to understand why the government revoked the rule allowing service by regular mail. It’s possible the change was a result of the common occurrence of defendants claiming they never received a copy of the claim.

But is the answer to make things more difficult for the plaintiff who is trying to get access to justice?

There were other options available to the court, such as allowing service by e-mail or fax. As it stands, it appears that the decision to revoke service by regular mail is a mistake that has undermined access to justice, an ideal the court is so rigorously trying to achieve.

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Jordan Farkas is an Ontario litigation lawyer and litigation solutions consultant. He is founder of mrsmallclaimscourt.ca, lawyerletter.ca, and canadianlegaloutsourcing.ca.

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For more on this issue, see "Cyber-service a 'new frontier.'"