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| Michelle Panagiotakos |
Legislative history and rationale
The small claims court is a vital part of Ontario’s legal framework, with a long history of providing a relatively simpler, more expeditious and cost-efficient alternative to proceedings in the Superior Court of Justice. Throughout the years, its monetary limit has periodically evolved in response to the ever-changing economic landscape and growing concerns about access to justice.
The last major increase occurred in 2020, when the ceiling jumped from $25,000 to $35,000; a notable jump from the prior $10,000 limit in 2010. With each successive increase, the province’s ongoing policy objective is clear: keeping less complicated and lower-value claims away from the ever-congested Superior Court docket and, in turn, reserving limited judicial resources for more procedurally complex and higher-value litigation.
The latest jump to $50,000 not only continues this trajectory, but it also signals the legislature’s continued focus on procedural efficiency and proportionality. More specifically, the increase is in line with the principles of proportionality set out in Rule 1.04(1.1) of the Rules of Civil Procedure, which emphasize that the time and expense devoted to a legal proceeding should correspond to the importance and complexity of the issues and monetary amount involved.
It is these principles of proportionality that govern not only the jurisdictional limit but other key procedural benefits of small claims court, such as fewer motions and other pretrial steps, mandatory settlement conferences and more liberal rules.
Implications for new proceedings
The increase in the jurisdictional limit to $50,000 now expands access to these benefits to even more litigants, many of whom might have otherwise faced disproportionate litigation costs and procedural delays in the Superior Court. The range of disputes that can appropriately be determined by the small claims court will also expand considerably.
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Small claims court will also see claims involving new sectors, such as the insurance sector. Insurance disputes have typically been commenced in the Superior Court, sometimes solely due to jurisdictional limits, despite the procedural inefficiency and cost implications of doing so. Now, recovery can be sought more efficiently in disputes involving subrogated claims, overpayment and premium disputes, and first-party and third-party property losses within the new monetary threshold.
In contrast, the Superior Court will remain the proper venue for matters of greater magnitude: higher-value, more complex or precedent-setting matters, such as multiparty actions, estate litigation, injunctions or declaratory relief and personal injury claims exceeding policy limits.
Implications for existing proceedings
The higher ceiling also has implications for existing proceedings, both at small claims court and Superior Court. In many cases, amending or transferring proceedings should be considered.
For existing small claims court matters, plaintiffs can now amend their current claim to increase the amount of their claim up to the new $50,000 limit. This is particularly applicable for those whose losses have increased since they first issued their claim or those who chose to waive any losses that exceeded the prior $35,000 limit in order to stay within the small claims court’s jurisdiction. Generally, a plaintiff can amend their claim up to 30 days prior to trial.
On the consent of all parties, existing Superior Court actions under $50,000 can now be transferred down to small claims court prior to trial, enabling them to take advantage of the more simplified and less costly process. This is only applicable, though, to actions where the only claim is for money or recovering personal property.
Conclusion
The monetary increase in the small claims court’s jurisdiction to $50,000 marks a small but mighty shift in Ontario’s judicial ecosystem. Yet another effort to reduce court backlogs, it expands access to justice for Ontario litigants by streamlining the adjudication of low- to mid-value disputes. It also offers counsel an opportunity to reconsider and adapt their case management, venue selection and settlement strategies in order to resolve moderate-value disputes more efficiently.
In short, Ontario’s small claims court is no longer merely a venue for “small” claims. With this jump, it is bound to become a central forum for a wide range of disputes — even insurance and commercial disputes that have been traditionally in the exclusive domain of the Superior Court — reshaping the litigation landscape for years to come.
Michelle Panagiotakos, of SBA Lawyers LLP, has extensive insurance defence experience in both tort and accident benefits, though her practice focuses more on the latter, including priority and loss transfer disputes. Michelle’s unique experience of working not only for her clients but with them has both deepened her knowledge of insurance defence and fuelled her commitment to delivering exceptional, client-focused support. Michelle’s courtroom adventures span the Court of Appeal, Divisional Court, Superior Court of Justice and the Licence Appeal Tribunal, where she’s known for her impressive success rate and client victories.
The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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