Costs Awarded in Ontario Small Claims Court: The 15% Rule

Winning or losing a Small Claims Court case in Ontario doesn't just mean the judgment amount — costs can add thousands of dollars on top. Understanding how the court awards costs helps you assess the real financial exposure of defending a claim.

The 15% Cap on Representation Costs

Section 29 of the Courts of Justice Act generally caps representation costs at 15% of the amount claimed, not the amount awarded. On a $40,000 claim, the ordinary limit is $6,000; statutory exceptions can apply.

This applies to fees paid to a licensed paralegal or lawyer who represented the party at trial. Court filing fees and out-of-pocket expenses (disbursements) sit outside the 15% cap and are awarded separately.

What Gets Awarded Beyond the Cap

Filing fees and disbursements are recoverable on top of the 15%:

• Defence filing fee: $77
• Defendant's Claim filing fee: $108
• Motion filing fee: $127
• Trial fixing fee: $308 (infrequent claimant) or $403 (frequent)
• Witness summons: $33 per witness
• Process server costs, photocopying, and expert report fees

These disbursements are awarded at the judge's discretion based on reasonableness. Keeping receipts for every litigation expense is essential.

Rule 14 and Double Costs

Rule 14.07 creates cost consequences tied to settlement offers. A plaintiff whose offer was rejected may be awarded up to twice the costs of the action if the judgment is as favourable as or more favourable than the offer. A defendant whose offer was rejected may be awarded up to twice the costs awardable to a successful party from the offer date if the judgment is as favourable to the plaintiff as or less favourable than the offer. For either cost consequence, the offer must be served at least seven days before trial and remain unwithdrawn and unexpired through trial.

For defendants, this means two things:

1. Take written offers seriously. A $15,000 offer on a $30,000 claim that you reject — followed by a $20,000 judgment — could result in increased costs against you if the offer met Rule 14.07's timing and availability conditions.
2. Make your own offer. If you serve a Rule 14 offer at least seven days before trial, the plaintiff rejects it, and the judgment is as favourable to the plaintiff as or less favourable than your offer, the court may award increased costs.

What Self-Represented Defendants Can Recover

If you represent yourself and succeed, the court may award up to $500 for inconvenience and expense under Rule 19.05, where the amount claimed exceeds $500, exclusive of interest and costs. A separate amount of up to $1,500 is available under Rule 14.07(3) only when the court awards you Rule 14 offer costs after the other side rejects an offer that meets the rule's conditions.

These amounts compensate for inconvenience and expense. The court decides whether to award them and in what amount. Document your out-of-pocket costs and time spent, and present them at trial.

When the Court Penalizes Bad Behaviour

Costs can also be awarded as a penalty. Under Rule 19.06, the court can order a party or representative who has unduly complicated or prolonged the proceeding, or otherwise acted unreasonably, to pay an amount as compensation. Any costs award remains subject to section 29 of the Courts of Justice Act, including its exceptions to the usual 15% limit.

Examples that trigger penalty costs include: filing frivolous motions, refusing to participate in the settlement conference in good faith, failing to make required document disclosure, or acting abusively toward the other party or the court.

Practical Impact for Defendants

On a typical $20,000 claim, your cost exposure if you lose at trial looks roughly like:

• Judgment: $20,000
• Representation costs (15% of $20,000): up to $3,000
• Disbursements: $500–$1,500
• Pre-judgment interest: varies by period and rate

Total exposure can easily reach $25,000 on a $20,000 claim. Factor costs into every settlement decision — sometimes paying $15,000 to resolve a $20,000 claim is the rational choice when costs and interest are added.

Our Defending a Claim in Ontario Small Claims Court guide breaks down the full cost picture alongside settlement strategy, so you can weigh your options with real numbers.

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