Small Claims Court Changes

Effective October 1, 2025, the monetary jurisdiction of Ontario’s Small Claims Court will increase from $35,000 to $50,000, excluding interest and legal costs. Small Claims Court offers a simplified process with lower procedural and evidentiary requirements compared to the Superior Court of Justice. This change is intended to streamline the litigation process by allowing a higher volume of mid-level disputes to be resolved through a faster, less complex, and more cost-effective process for parties whose claims previously exceeded the $35,000 threshold.

The amendment also raises the appeal threshold. Final orders involving amounts under $5,000, excluding costs, will no longer be appealable to the Divisional Court. This change aims to reduce appeal-related delays and costs for lower-value claims, though it also limits recourse for parties dissatisfied with decisions on smaller matters.

Cost recovery in Small Claims Court remains limited. A successful party may generally recover legal fees up to 15% of the amount claimed, in addition to reasonable disbursements such as court filing fees or process serving costs. For a $50,000 claim, legal costs are capped at $7,500. While this framework keeps litigation more affordable, it also requires parties to carefully evaluate the cost-benefit of legal representation.

The timing of this change is important for both prospective and existing litigants. Plaintiffs with claims close to or slightly above $35,000 may wish to wait until after October 1 to benefit from the new limit. Similarly, parties with ongoing Superior Court matters under $50,000 may consider whether transferring to Small Claims Court could lead to faster resolution and lower legal expenses.

This amendment marks a notable shift in Ontario’s litigation landscape. It is expected to increase the volume of cases in Small Claims Court, which could lead to longer wait times for settlement conferences and trials.

Written by: Raha Zolfaghari