Small Claims Court facing challenges

Nearly two years after it changed the rules governing the Small Claims Court, the province’s plan to make the so-called people’s court more accessible by increasing the monetary jurisdiction is facing a number of challenges, including delays and an increased caseload involving more complicated matters, according to lawyers and paralegals who do work there.

Originally proposed by former associate chief justice Coulter Osborne in the 2007 civil justice reform project report, Ontario’s plan to increase the monetary jurisdiction of small claims matters to $25,000 from $10,000 took effect in January 2010.

In a bid to improve access to justice, Ontario joined the ranks of Alberta, British Columbia, Nova Scotia, and the Yukon in increasing the monetary cap for small claims.

By transferring claims from the Superior Court to the Small Claims Court, the province argued the legal system would be easier to access and more affordable for individuals.

But Toronto paralegal Rick Goodman says the province’s plan is having the opposite effect as increased delays and an overworked system plague the Small Claims Court.

“We’re seeing more claims going through the Small Claims Court than ever before,” says Goodman of Fredrick Goodman Paralegal in Toronto.

“Also, the quality of the claims are increasing and becoming much more sophisticated. The topics have become newer and more modern, and there’s a trend where people are bringing more actions in that they never would have considered under the old $10,000 cap.”

The result, according to Goodman, hasn’t been positive.
“Because the attorney general has not increased the resources given to small claims courts, there aren’t enough clerical staff, no updated computers, and no extra judges to handle that increase,” he says.

“That leads to people not being given proper notice, an inordinate amount of time and resources being wasted, and, inherently, delays, because the courts just cannot keep up.”

Goodman notes trial lists often collapse as a result. In some cases, people simply fail to appear for their matters and judges go home due to vacant courtrooms.

“From the litigators to the court staff, everyone is being affected and there really is no logical reason why this should be happening,” says Goodman. “It was bad enough before, but the increase to $25,000 has just compounded it.”

But Sergiy Timokhov, a lawyer at Garfin Zeidenberg LLP, says while it may be true that the Small Claims Court has become busier, many in the legal community expected the increased caseload due to the monetary change.

At the same time, he has noticed the government has allocated additional resources to it in the last few years.

“What is new are the number of deputy judges appearing before the small claims courts as a result and the number of lawyers that have come into the small claims practice,” says Timokhov.

“Before the cap increase, there were
usually more paralegals than lawyers. Now, that is not the case. Now, the cap increase gives lawyers more flexibility in terms of their reach, which is attracting more of them to Small Claims Court.”

The crowd has also begun to include some lawyers and firms people wouldn’t expect to see in the Small Claims Court, according to Goodman.

“The big Bay Street law firms are starting to show up now,” he says. “On the one hand, I enjoy the challenge and I think it’s much better for the file. On the other, when the cap was only $10,000, a lot of firms would send their articling students or smaller members to get the experience.

But now, there’s a tendency for more experienced lawyers to come forward because the stakes are considerably higher. It’s good for the clients but not necessarily the people being wedged out.”

An example mentioned of the trend towards lengthier and more complex cases is a libel matter that’s currently in settlement discussions.

In Corrigan v. Hechter, London, Ont., immigration lawyer Edward Corrigan is seeking $25,000 in libel damages from Excalibur Capital Management president William Hechter, who’s also a non-practising lawyer.

Hechter had allegedly sent an e-mail to several Law Union of Ontario members calling Corrigan an anti-Semite and an “idiotic spammer.” The e-mail, according to Corrigan’s statement of claim, was in response to his comments about the Israeli-Palestinian conflict. None of the allegations have been proven in court.

“These types of cases wouldn’t have come up in the Small Claims Court under the previous monetary cap,” says Goodman. “They are sophisticated cases and trials, if they reach that point, that demand more resources. But they also bring in a higher level of litigation and representation that is positive for clients.”

But as Timokhov notes, the number of cases in the court system in general hasn’t necessarily increased. Instead, matters have simply trickled down from the Superior Court and thereby transferred the delay from one area to another.

“You could say there has been an increase in the number and complexity of cases before the Small Claims Court in Toronto precisely because a percentage of the cases that were before the Superior Court are now being transferred to the Small Claims Court as cost awards increase to $25,000,” says Timokhov.

“I think a better term for this would be a switch, though. The number of cases in small claims courts hasn’t really increased. Minor matters are simply being taken from the Superior Court and switched to the Small Claims Court.”

Either way, according to Goodman, delays and increased costs go against the province’s original plans and aren’t good for justice.

“Justice delayed is justice denied,” he says. “The purpose of access to justice and Justice on Target is to allow cases to be heard in a more expeditious way. So far, that isn’t happening and everyone is being affected.”

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