Small Claims Court for your small business

Legal information, not legal advice. This guide and our free tools give legal information. They do not give advice about your case. A licensed lawyer can give legal advice.

The answer

Small Claims Court is the main court for business debts up to $50,000. Even when you win, costs for a representative cannot pass 15% of the claim, except as a penalty. That cap is why many businesses run their own claims, with software or with help in parts.

Why businesses use this court

• Invoice claims are claims for a set amount. With no Defence, the clerk can sign a default judgment.
• An employee can represent the corporation in this court.
• Fees are set and small: $108 to file, $308 for a trial date.
• Your contract interest rate applies if the customer agreed to it.

The frequent-claimant level

After 10 claims in the same office in one calendar year, each new claim costs $228 instead of $108. Trial dates rise to $403, and default judgment requests to $128. Read: the 10-claim fee rule.

Set up a simple collection process

1. Put payment terms and an interest rate in every contract.
2. Send the demand letter on a set schedule, for example 30 days after the due date: /demand-letter.
3. File before invoices age. The 2-year clock runs on each unpaid invoice, in most cases.
4. Use the exact legal name from your own records. Read: name the right defendant.
5. Track every case deadline. The clerk dismisses a stalled case at its 2nd anniversary.
6. Claim your fees in each case: the court can order the defendant to repay them.

Deadlines and fees

• File a claim: $108, or $228 at the frequent level.
• Defence window: 20 days; then a default judgment request is $94, or $128.
• Garnishment: $144. Writ or examination: $68.

Common mistakes

• Do not let invoices pass the 2-year mark.
• You can put several unpaid invoices from one customer into one claim.
• Do not ignore collectability. A judgment against an empty company gets you nothing.
• Do not split one cause into 2 claims to fit under $50,000.

When to get a lawyer

Get legal advice when a customer disputes the work, or files a claim against you. Legal services provided by Mithril Law — Jonathan Kleiman, licensed Ontario lawyer.

Free tools

• Check if your claim is worth it: /check
• Write a demand letter: /demand-letter
• Fill in your court forms: /build/7a
• Calculate your deadlines: /calculators/deadlines