By Sean S. Carter

As of October 1^st, 2025, changes to O. Reg. 626/00, Small Claims Court Jurisdiction and Appeal Limit will come into force and increase the current monetary limit for claims in Ontario’s Small Claims Court from $35,000 to $50,000, exclusive of costs and interest. This amendment has been made with the stated intent to allow greater access to the Small Claims Court for new plaintiffs and may allow current plaintiffs to increase their claim amount up to the new monetary limit of $50,000 to better reflect the plaintiff’s losses.

The Small Claims Court has jurisdiction to hear actions for repayment of money or the recovery of personal property up to the monetary limit. The court hears matters in a summary manner, encouraging a more timely and efficient resolution. The upcoming monetary limit increase are intended to simplify the litigation of minor disputes by increasing access to justice, with less stringent rules of evidence and fewer procedural steps potentially reducing time and costs in court.

However, charities and not-for-profits should also be aware that as the increase may encourage more claims to be brought in Small Claims Court, the court’s “costs” structure presents particular challenges for organizations with limited budgets. Unlike in other Ontario courts, successful parties in Small Claims Court are not frequently rewarded with meaningful recovery of their legal expenses, with extremely low limits (in comparison to those available in the Superior Court of Justice of Ontario) to reimburse successful parties for their legal costs. In other words, even when a charity or not-for-profit successfully defends against a frivolous or unfounded claim, it will likely still bear the vast majority of the burden of its own legal defence costs, even if the defence is successful and the judgment is for damages less than amounts previously offered to the plaintiff to settle the claim.

The Small Claims Court, with extremely small exceptions, is limited to awarding costs to the successful party of 15% of the amount claimed and 30% if the amount awarded is the same or less than amounts offered by the successful party to settle the matter at a much earlier stage. In the Superior Court of Justice of Ontario, costs are awarded to successful parties as a percentage of the actual amounts spent towards legal fees and disbursements; which could range typically range from approximately 40% (partial indemnity costs) to approximately 80% (substantial indemnity costs) of the actual amount spent by the successful party or the party whose offer to settle was the same or less than the amount awarded at trial.

Ultimately, while the higher limit may improve access to justice, it also has the potential to create unintended burdens for charities and not-for-profits, among other defendants, particularly in the face of frivolous claims. With limited ability to recover defence costs, these organizations face the prospect of increased claims at the Small Claims Court level, which could then result in the diversion of financial resources originally intended for an organization’s charitable or not-for-profit purposes.

​Read the September 2025 Charity & NFP Law Update