On October 1, 2025, Ontario increased the monetary limit for claims in the Small Claims Court from $35,000 to $50,000 via an amendment to O. Reg. 626/00: Small Claims Court Jurisdiction and Appeal Limit, as well as related updates in the Rules of the Small Claims Court.
In addition to the monetary limit change, the appeal threshold will also increase: in many cases, only judgments above $5,000 (previously $3,500) will be eligible for appeal to Divisional Court.
The increase is intended to expand access to a simpler, more affordable forum for a broader class of civil disputes.
Earlier in 2025 (effective June 1, 2025), Ontario also introduced a number of procedural changes to the Small Claims Court Rules (O. Reg. 258/98) to modernize and streamline the court’s processes—things like trial management conferences, more clarity on hearing method (in-person, video, telephone), increased compensation for self-represented litigants, and tighter restrictions on adjournments.
Why this matters (and what it changes)
1. Expanded access for more disputes
By elevating the ceiling to $50,000, more claims that would previously have been forced into Superior Court can now be heard in Small Claims Court. Examples of cases newly eligible include:
• Contract disputes (unpaid invoices, services, goods) that fall between $35,000 and $50,000;
• Property damage or repair claims (e.g. motor vehicle damage, damage to goods) where the loss is within the new limit;
• Smaller personal injury claims (slip & fall, minor accidents) that would not reasonably exceed $50,000 when considering medical costs, lost income, etc.;
• Some employment/wrongful dismissal claims (especially for non-executive employees with modest notice entitlements);
• Landlord & tenant disputes (unpaid rent, damage) — note that in many cases the Landlord and Tenant Board (LTB) jurisdiction will also be aligned with the $50,000 threshold for enforcement actions.
In short: more litigants, especially individuals and small businesses, can access a lower-cost, more streamlined forum for disputes of moderate size.
2. Cost, speed, and procedural simplicity advantages
The Small Claims Court is designed to be less formal and more accessible than the Superior Court. Some of the advantages include:
• Lower court fees and reduced cost burden (less procedural overhead)
• Greater ability for self-representation or representation by licensed paralegals (as opposed to always requiring lawyers)
• A generally more predictable, quicker path from filing to resolution
• Fewer formalities (less discovery, fewer procedural motions, more constraints on complex evidentiary regimes)
• The reforms in the rules (from June 2025) will further support that by emphasizing the “just, most expeditious and least expensive determination” as the primary objective in every proceeding.
3. Strategic implications for litigants & counsel
For plaintiffs (claimants)
• The expanded ceiling means plaintiffs can seek greater damages in a more favourable procedural environment. Many disputes that were “too big for Small Claims but too small to justify Superior Court” now fall comfortably in the Small Claims sweet spot.
• If you currently have a claim in Superior Court that is under the new $50,000 threshold, you may consider transferring it to Small Claims Court to take advantage of the simpler procedure.
*Note: transfers are not always automatic—consent may be required, or procedural obstacles may arise.
• For existing Small Claims matters (matters that fall under $35,000), there may be opportunities to amend the claim upward (subject to rules about amendments and timing) to take advantage of the higher ceiling. We’ve already seen a large amount of pre-existing claims amended to reflect increased damages sought as a result of this shift.
• Because the higher ceiling may attract more claims, defendants may feel greater pressure to settle earlier, and plaintiffs may gain more leverage in settlement negotiations.
For defendants
• Businesses (especially small- and medium-sized) should prepare for a likely increase in litigation risk. Claims that previously would have been uneconomic for plaintiffs might now be pursued.
• Contract drafting may need to become more defensive: adjusting limitation of liability clauses, interest and penalty provisions, dispute resolution clauses (e.g. arbitration, mediation) to manage exposure.
• For employers, wrongful dismissal claims or claims for exemplary/moral damages may increasingly be litigated in Small Claims if they fall under $50,000.
• Defendants should re-assess their litigation strategy: Will it be worthwhile to defend in Small Claims? Is settlement more attractive given the lower cost environment?
For counsel, paralegals, and courts
• Smaller firms, junior associates, and paralegals may find more work in the Small Claims space—there is room for growth in handling the increased caseload.
• More matters will require greater comfort with streamlined procedure, efficient case management, and possibly greater use of settlement mechanisms (mediation, early resolution) to avoid backlog.
• The courts will need to scale: more judges or deputy judges, more administrative support, potential modernization of digital infrastructure, and more aggressive scheduling to avoid excessive delay. Some critics warn that unless capacity is increased, the increased volume might simply shift delays from Superior Court into Small Claims.
4. Risks, challenges, and caveats
• Caseload pressure: Some jurisdictions (Toronto, Ottawa, Peel) already experience lengthy delays in Small Claims. Without commensurate investment, the increase might exacerbate waiting times.
• Complex cases: Some disputes, even if technically under $50,000, may involve complex legal or factual issues (multiple parties, cross-claims, expert evidence) that test the limits of the simplified regime. Such cases might not fare well in Small Claims.
• Limits on remedies: Small Claims Court has constraints (on discovery, scope of evidence, procedural motions, cost awards), which may limit the ability to execute complicated litigation strategies.
• Amendment and procedural hurdles: While existing claims may be amended, courts have discretion to refuse amendments that are not just or timely. Also, not all Superior Court claims will be eligible for transfer.
• Appeal constraints: With the raised appeal threshold, some parties may find themselves unable to appeal smaller judgments, reducing recourse in marginal cases.
• Strategic behavior: Some litigants may fragment claims or restructure claims to stay under the limit or use the limit to pressure settlement. Conversely, some plaintiffs may “cap” their claims at $50,000 even if their true entitlement is higher, purely to stay in the simpler forum.
Practical takeaways & advice
1. Review existing cases
If you currently have a pending claim in Small Claims or Superior Court that falls near or under $50,000, re-assess whether it makes sense to amend or transfer to Small Claims when the new threshold takes effect.
2. Contract drafting & risk management
Re-visit your standard contracts to include protective measures (limitation clauses, dispute resolution provisions, interest/penalty caps) to mitigate exposure now that the “small claims” risk envelope is larger.
3. Litigation budgeting & strategy
Parties (especially defendants) should re-evaluate cost/benefit analysis in defending claims in Small Claims vs seeking early settlement. Settlement may become more attractive. Plaintiffs should revisit pipeline cases to see which ones make sense to initiate under the new regime.
4. Prepare for procedural shifts
Lawyers and paralegals should gear up for more frequent use of trial management conferences, efficient disclosure, and alternative dispute resolution tools (mediation, settlement at early stages). Getting comfortable with streamlined procedure is essential.
5. Advocate for resources
To ensure the reform truly improves access to justice, stakeholders should press for adequate judicial appointments, staff, case management systems, and technology (e-filing, remote hearings) to prevent bottlenecks.
On its face, the Small Claims Court reform broadens access to a more affordable, faster, and less formal venue for many civil disputes, potentially alleviating pressure on the Superior Court. But its success will depend heavily on whether the courts and government bolster capacity and modernize infrastructure to absorb the anticipated increase in caseload.
For litigants, counsel, and businesses, this change will shift strategic calculus: which cases to bring, where to defend, and how aggressively to litigate or settle. The $50,000 ceiling may become the new “sweet spot” for many mid-sized claims.
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