Difference between revisions of "Responding to a Small Claim (20:VI)"

Many insurance policies cover more liabilities than their description would suggest.   For example, many homeowner and tenant policies cover claims for damages or injuries arising from acts or omissions by the insured anywhere in the world.   An example would be accidentally tripping  a person who falls and breaks their hip.   These policies also tend to include most people in the household including young children and foster children.  

There are many exclusions and limitations but it is always best to let the insurer know about a claim against you.   If the insurer will defend  you, the insurer will bear the costs of your defence and possibly pay any damages that are awarded.  

'''Note: It is important to contact the insurer as soon as possible and to not make any admissions that might jeopardise a defence.   Failing to promptly notify the insurer, admitting liability, or taking steps in the claim may permit the insurer to deny coverage.'''  

Many lawsuits arise or continue because a wrongdoer has not apologised to the party who was wronged. The ''Apology Act'', SBC 2006, c 19 allows a person to apologise for a wrongful act or failure to act without the apology becoming an admission of liability.A sincere apology can often avert litigation or form an important foundation for a settlement.  

If a defendant pays the entire amount of the claim directly to the claimant,102 the defendant need not file a Reply. The defendant should retain a receipt as proof of payment and request that the claimant withdraw the claim. Only the claimant may withdraw a claim and, if a withdrawal is filed, all parties who were served with the Notice of Claim must be served with a copy of the withdrawal.  

When considering this option, a defendant should be aware of other possible problems aside from the lawsuit. For example, if the claimant has  placed derogatory information on the defendant’s credit file, the defendant should ask the claimant to remove this negative information as part of the settlement. If the claimant is unwilling to remove the information, the defendant may still settle the claim but may find it difficult or impossible to remove the information from the credit file. The process for removing incorrect information from a person’s credit file is outside the scope of this guide.  

If the entire claim is admitted but the defendant requires time to pay or only part of a claim is admitted,103 the defendant must file a reply form but may also propose a payment schedule for what is admitted. The payment schedule must detail how the amount will be paid back. The Registrar can order the proposed payment schedule if the claimant consents to it104. If the claimant does not  consent to the proposal or no payment schedule is proposed, the claimant may summon the defendant to a payment hearing105.  

A defendant who opposes all or part of the claim106 must file a Reply form detailing what is admitted, what is opposed, or what is outside the defendant’s knowledge. The reply should list reasons for any parts that are opposed. A defendant should avoid a general denial of the entire  claim; a detailed examination of each element of the claim and why the defendant thinks it is wrong is much more persuasive.  

Before deciding to oppose a claim, a defendant should ensure that there is a legal defence to the claim. A penalty can apply if a defendant  proceeds through trial with a Reply that is bound to fail107.  

Whether or not a defendant agrees or disagrees with all or a part of the claim, the defendant can counterclaim108. A defendant who wishes to counterclaim should review the “Do You Have a Claim” and “Choosing the Proper Forum” sections of this guide. A counterclaim is essentially a notice of claim but on a different form. A counterclaim must have a legal basis; there are penalties for proceeding to trial if there is no reasonable basis for success109.  

Although a defendant can start a separate claim either in Small Claims Court or another forum instead of counterclaiming, if the parties and  witnesses are the same and the claim falls within the Small Claims Court jurisdiction, it is preferable that the defendant file a counterclaim so that both matters are heard together. If the defendant has commenced an action in a different forum, this should be mentioned in the Reply.  

A counterclaim is made on the Reply form by following the instructions and paying the required fee. The fee for a counterclaim is the same as the fee for a notice of claim and is eligible for a fee waiver.  

The relationship between a counterclaim and a set-off should be noted110. A counterclaim is a standalone claim and it is possible for a defendant to succeed on a counterclaim when the claimant has been unsuccessful. A set-off is a defence. If the claimant is successful, a set-off will reduce the amount payable to the claimant.   If the claimant is unsuccessful, the set-off defence does not apply; the defendant is not awarded the amount of the set-off.  

As the counterclaim is on the reply form, it must be filed at the same time as the Reply111, within the time allowed for filing a Reply112, and at the registry where the notice of claim was filed113.

The registry will serve the claimant with the reply and counterclaim within 21 days of it being filed114.  

Once served, the claimant (now a defendant by counterclaim) must follow the same rules as replying to a Notice of Claim115.   The claimant should review this section of the guide in its entirety.  

If the defendant who has filed a Reply believes that a person or legal entity other than the claimant should pay all or part of the claim, he  or she may make a claim against that other party by completing a Third Party Notice116. If a settlement conference, mediation session, or a trial conference has not been held, leave of the court is not required117. If any of these have been held, the defendant must  apply to the court for an order permitting the counterclaim to be filed against the third party118.  

A third party claim is different from a claim against the incorrect defendant. A third party claim is made when a defendant believes that a third party should reimburse them if they are found to be liable to the claimant.For example, if a defendant is sued for a credit card debt, the defendant may third party the cardholder who actually spent the money giving rise to the debt.  

A defendant who wishes to issue a third party notice should review the “Do You Have a Claim” and “Choosing the Proper Forum” sections of this  guide.   A third party claim is essentially a notice of claim but on a different form.   A third party claim must have a legal basis and there are penalties for proceeding to trial if there is no reasonable basis for success.  

To start a third party claim, the defendant must complete Form 3 and file it in the same registry where the Notice of Claim was filed119.   The defendant must serve the third party with a copy of the filed Form 3, a blank Reply form, a copy of the Notice of Claim, a copy of  the Reply to the Notice of Claim, and all of the documents and notices the other party would have received120; all of these documents are to be served in the same manner as serving a Notice of Claim121. A defendant has only '''30 days''' after filing to serve the third party and file a certificate of service122  at the registry.   If the third party is not served and the certificate of service is not filed within 30 days, the third party notice expires but can be renewed123.  

The registry will serve the claimant with the third party notice within 21 days of its being filed124.

Once served, a third party must follow the same rules as replying to a Notice of Claim125.The third party should review this section of the guide in its entirety.