Small Claims Costs and Penalties (20:XV)

The court expects parties to act reasonably and follow the rules. Parties who do not follow the rules or are unsuccessful may be liable for certain costs and penalties.

A. Costs to Successful Party

Generally, the unsuccessful party must pay the successful party’s expenses (Rule 20(2)). Any reasonable expenses directly related to the proceedings may be claimed. This includes filing fees, costs for document reproduction, and other costs incidental to the trial process.

A list of expenses should be brought to trial and can include expenses incurred due to the lateness, unpreparedness, or general misconduct of a party (Rule 20(6)) as long as the party claiming the expenses has actually spent that amount of money. (Weeks v Ford Credit Canada Ltd, [1994] BCJ No 1737).

Wages lost for attending court cannot generally be recovered. (See McIntosh v De Cotiis Properties Ltd, 2002 BCPC 57 (CanLII)). Where a claim before the small claims court has been withdrawn and there are no appropriate grounds to recall it, neither costs nor penalties can be assessed. (See Rule 8; and Northwest Waste Systems v Szeto, 2003 BCPC 431 (CanLII)).

In circumstances where the successful party has acted unfairly, withheld information, misled the court, or wasted the court’s time, the successful party may have to pay the unsuccessful party’s costs. (See Tilbert v Jack, [1995] BCJ No 938).

NOTE: A lawyer’s fees cannot generally be claimed as expenses. (See Small Claims Act: s 19(4); and Weeks v Ford Credit Canada Ltd., [1994] BCJ No 1737). The only exception is where the contract between the parties requires the reimbursement of legal costs however this only applies to legal fees that are not related to the claim. (See Wetterstrom et al. v Craig Management Enterprises Ltd., 2009 BCPC 165 (CanLII)).

B. Frivolous Claims

A judge has discretion to order a penalty of up to 10 per cent of the amount claimed or the value of the counterclaim if the party proceeded through trial with no reasonable basis for success (Rule 20(5)).

C. Failure to Settle

If there has been a formal offer to settle under Rule 10.1 that was not accepted, a penalty, in addition to any other expenses or penalties – up to 20 per cent of the amount of the offer to settle – may be imposed if the offer was the same or better than the result at trial.