PEI Small Claims Cost Sanctions: What They Are and How to Avoid Them

Under Rule 74, a party who frustrates a settlement conference through inadequate preparation or an unreasonable refusal to discuss resolution can face a costs order. Disclosure failures can also lead to evidence being excluded or a costs order, and the trial judge has discretion to award costs.

When Cost Sanctions Can Be Ordered

Under Rule 74, cost sanctions can arise at several points in the process:

At the settlement conference — If a defendant fails to attend after receiving notice, the presiding officer may dismiss the defence and note the defendant in default. A party who frustrates the conference through inadequate preparation or an unreasonable refusal to discuss resolution can be ordered to pay costs. The general cap is $100, though special circumstances can justify a higher amount.

For disclosure failures — Rule 74, Subrule 13.03(3) requires both parties to serve and file the trial documents they intend to rely on, including their List of Proposed Witnesses (Form 13A), at least 10 calendar days before the settlement conference. Failing to meet this deadline can result in evidence being excluded at trial or a costs order.

At trial — The trial judge has discretion to award costs. In small claims, these typically include court filing fees, process-server charges, and witness attendance allowances.

The $100 Settlement Conference Cap

The $100 cap at the settlement conference stage deserves specific attention because it catches many defendants off guard. If you frustrate the conference through inadequate preparation or an unreasonable refusal to discuss resolution, the presiding officer may order costs of up to $100 — and can go higher in exceptional cases.

The costs order is separate from the amount claimed in the underlying case.

How to Avoid Cost Sanctions

Most cost sanctions are easily prevented:

1. Meet every deadline — file your defence on time, serve your disclosure documents 10 days before the conference, and attend every scheduled court event
2. Prepare for the settlement conference — bring all your documents, know your bottom line, and be ready to negotiate in good faith
3. Attend or get permission not to — if you truly cannot attend a scheduled event, contact the court in advance and request an adjournment rather than simply not showing up
4. Be reasonable — the settlement conference is designed to resolve disputes. An unreasonable refusal to discuss resolution can lead to a costs order.

Costs at Trial

If the case goes to trial, the judge has discretion to award costs. In PEI small claims, these typically include filing fees, process-server charges, and witness attendance allowances.

The judge also has discretion to award costs to a successful defendant.

Managing Costs Through the Process

The PEI Small Claims Response Guide covers the disclosure timeline, settlement conference preparation, and trial procedures to help you avoid cost sanctions and present your case effectively.

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