Small Claims Court costs and the section 29 cap

Costs are discretionary

In the Small Claims Court, costs are always in the court's discretion. Winning does not automatically produce a costs award, and the amount ordered is often less than what a party actually spent. The costs framework is set by section 29 of the Courts of Justice Act and Rule 19 of the Rules of the Small Claims Court.

The ordinary 15% cap on section 29

Section 29 generally limits costs other than disbursements to 15% of the amount claimed or the value of the property sought. In practice, this puts a hard ceiling on representation-related costs - for example, the paralegal or lawyer fee a court can order the losing side to pay.

What sits outside the cap

Disbursements - court fees, service fees, transcript costs, and similar reasonable out-of-pocket expenses - are not subject to the ordinary 15% cap and are considered separately. The court may still tax or disallow disbursements it does not consider reasonable or necessary.

The unreasonable-behaviour exception

The court may exceed the ordinary cap where it considers a higher amount necessary to penalise a party or a party's representative for unreasonable behaviour in the proceeding. Only the court decides whether the exception applies and what, if any, costs are awarded. Do not treat any online estimator as a prediction of a costs award.

Rule 14.07 offers to settle

Rule 14.07 provides costs consequences where a party makes a written offer to settle that meets the Rule's conditions and does at least as well at trial as the offer. In that situation the court may award an amount not exceeding twice the costs of the party who made the offer, excluding disbursements, from the offer date forward - the doubling is a ceiling, not an automatic entitlement, and it remains subject to Rule 14.07's conditions and the court's discretion. Compliance with the Rule's timing, form, and content requirements matters, and mistakes are common.

Representing yourself

Self-represented parties can also be awarded costs, but a court is generally more conservative in setting an amount because there is no professional fee to indemnify. Rule 19 allows a compensating amount of up to $500 for a self-represented party's inconvenience and expense. That is a discretionary maximum, not a fee for time spent, and it is separate from proved disbursements.

Three contrasting situations

Fictional teaching examples - not legal authority.

A represented plaintiff who wins outright. On a $10,000 claim that succeeds in full, the ordinary ceiling for costs other than disbursements is $1,500, and proved court and service fees are claimed separately. What the paralegal actually billed does not raise the ceiling, and the court may allow well under it.

Divided success. Where a plaintiff wins part of the claim and the defendant succeeds on a counterclaim, there is no arithmetic that resolves who pays whom. The court may order costs to one side, split them, or order none at all. A ceiling computed on the amount claimed says nothing useful about that outcome.

An offer to settle in play. A defendant offers $6,000 well before trial and the plaintiff recovers $4,500. If the Rule 14.07 conditions are met, the costs analysis can move in the defendant's favour even though the plaintiff obtained judgment. Whether the Rule's timing, form and content conditions were met is a legal question and is deliberately not modelled anywhere on this site.

Common mistakes

• Reading the 15% ceiling as an entitlement or as the likely award.
• Adding the ceiling to disbursements and quoting the sum as an expected recovery.
• Applying the percentage to the judgment instead of the amount claimed.
• Inflating the claim to raise the ceiling, which carries its own costs risk.
• Assuming preparation and service costs are recovered in full, when Rule 19 ordinarily assesses them at much lower amounts.
• Relying on an offer to settle without advice on whether Rule 14.07 is engaged.

What this guide cannot determine

• Whether costs will be awarded to anyone in your case, or in what amount.
• Whether any behaviour was unreasonable. That finding belongs to the court alone.
• Whether the court will exceed the ordinary ceiling.
• Whether a disbursement was reasonably incurred and adequately proved.
• What a particular offer to settle triggers on your facts.

Selecting expenses or hiring a representative does not prove recoverability. Nothing here is legal advice or a prediction.

Practical next steps

• Model the ceiling and the disbursements separately with the Ontario Small Claims Costs Estimator.
• Collect receipts and proof of payment for every disbursement you intend to claim.
• Read the current text of s. 29 and Rule 19 before making a costs submission.
• Take any offer to settle or unreasonable-behaviour allegation to a lawyer or licensed paralegal.