By Samantha Hicks, Paralegal
You are owed money for services rendered; the invoices are beyond due and all attempts to contact the customer have failed.
You are ready to throw in the proverbial towel and write-off the amount outstanding; however, you are worried about the precedent that you are setting.
It has been suggested that you commence a Small Claims Court action to collect the amount owing, but you are hesitant…this isn’t something you want to navigate on your own nor do you want to spend more money on legal/representation fees than you are looking to collect.
You recall watching a movie (or was it a television show?) in which the loser was ordered to pay the winner’s legal/representation fees and wonder whether this 'loser pays' principle applies to the Small Claims Court?
The answer is 'yes' – the 'loser pays' principle does apply to the Ontario Small Claims Court. However, like all good things, section 29 of the Courts of Justice Act provides the maximum amount awarded to the winner for legal/representation fees is, generally, capped at 15% of the value/amount being claimed.
For example:
- $15,000.00 due and owing for invoices rendered (value/amount being claimed from customer)
x 15% =
- $ 2,250.00 being the maximum amount awarded for legal/representation fees in the within example
It is quite possible that, as the winner, you will spend more on legal/representation fees than the amount awarded by the Court…in which case, you need to look on the bright side – not only have you won, but you were also able to recover at least some of your legal/representation fees.