Can I recover my legal costs in Small Claims Court?

While some legal costs can be recovered in Small Claims Court, the amounts awarded to successful parties are significantly limited by the Rules of the Small Claims Court and the Courts of Justice Act. This is why it is important that you seek legal representation that is experienced with Small Claims Court litigation, and offers fees that are proportional to the nature of these claims.

In cases where the parties reach a settlement out of court, your paralegal may agree, as part of the settlement with the other party(ies,) to include some amount in the agreement to cover some of the legal expenses of the litigation.

In matters that proceed to trial, the Rules of the Small Claims Court (in conjunction with section 29 of the Courts of Justice Act) provides that a successful party may recover expenses associated with legal representation fees (i.e. your paralegal fees) for up to 15% of the amount being claimed in the action. That means that if the action seeks an award of $20,000, the successful party may be awarded up to $3,000 in legal fees. Generally, a successful self-represented party will not be awarded more than $500 for the inconvenience and expense associated with the action.

Parties may be able to recover amounts in excess of this 15% rule for their paralegals fees in cases where a successful party made an offer to settle, that was not accepted by the opposing side, and the party obtains a judgment that is as favourable, or better than the offer. The cost consequences associated with this failure to accept an offer cannot amount to more than twice the costs that would be awarded to the successful party.

Disbursements (other costs associated with the litigation) are recoverable in addition to the paralegals fees, though there are also some limitations provided in Rule 19 of the Rules of the Small Claims Court. For example, a party will not normally be awarded more than $60 for the costs to effecting service (per defendant). The amounts of disbursements associated with preparing a Plaintiff’s Claim or Defendant’s Claim shall not exceed $100. Examples of other costs that may be recovered in addition to your paralegals’ fees are expert fees, copying costs, and reasonable expenses for travel and accommodation.

The Rules of the Small Claims Court also provides that a penalty may be awarded against a party which has unreasonably complicated or prolonged the action, though this type of award is rare.

Since all these rules are complex, you should be represented by someone familiar with them in order to maximize the costs that may be awarded to you if you are successful in the litigation. A competent representative will also help minimize the costs awarded against you, if you do not succeed in your claim