Motor Vehicle Personal Injury Claims and Small Claims Court: Important Lessons about the Deductible, the Threshold and the Monetary Jurisdiction of Small Claims

Increasingly, plaintiffs are opting to commence their motor vehicle personal injury claims in Small Claims Court. There are undoubtedly advantages to litigating in Small Claims including expediency, accessible procedures, and less onerous discovery obligations. Perhaps the most alluring aspect of Small Claims Court is the ability to circumvent the costs risks of litigation in Superior Court.  

Whatever the reasons may be, this upward trend has been endorsed by the Divisional Court which has confirmed that there is neither inability nor lack of jurisdiction in Small Claims to adjudicate personal injury claims.[1] 

However, for lawyers who are accustomed to litigating motor vehicle personal injury claims in Superior Court, Small Claims Court can raise a number of questions and possible concerns, particularly surrounding the application of the monetary threshold and deductible. This article seeks to answer these questions, and provide general guidance on litigating motor vehicle personal injury actions in Small Claims.  

Small Claims Generally and Discovery Requirements 

The Small Claims Court is a branch of the Superior Court with a monetary jurisdiction of up to $35,000.00. It is presided over by deputy judges who act in a similar capacity as Superior Court judges. Small Claims is subject to its own set of rules – the Rules of Small Claims Court – which, as discussed above, provide streamlined procedures that are meant to be accessible, particularly to self-represented litigants. 

One of the biggest differences between Small Claims and Superior Court is the discovery process. First and foremost, there is no oral discovery in Small Claims, meaning that there is no opportunity for parties to ask each other questions under oath. Practically speaking, this also means that parties are deprived of the opportunity to obtain a better understanding of each other’s cases and positions on issues in dispute.

Once pleadings are closed, a mandatory settlement conference will take place. The Court with jurisdiction over a matter – there are over 90 Small Claims Courts in Ontario – will assign the parties a settlement conference date on which they must attend or risk having costs awarded against them, among other possible penalties at the Court’s discretion.

Settlement conferences are similar to mediations in that they are confidential and therefore allow the parties to have a frank and open discussion about the issues involved in an action. They are presided over by deputy judges or other officers of the Court who, unlike mediators, have the authority to make orders relating to the conduct of the action. For example, a deputy judge may order a party to produce relevant documents. Deputy judges are also able to make orders as to costs awards; for example, a party make seek costs if an opposing party has failed to produce any documents in advance of the conference.

At least fourteen days prior to the settlement conference, the parties are required to serve a copy of any document they intend to rely on at trial, including any expert reports. The parties are also required to serve a list of proposed witnesses. There is, however, no requirement that these documents be disclosed in a sworn document like an Affidavit of Documents. Of course, the parties are always at liberty to make requests for productions from one another, but there is no requirement that these documents these be made available until fourteen days prior to the settlement conference. 

The Application of the Verbal and Monetary Threshold and Deductible in Small Claims Court 

Another important matter to consider in the context of motor vehicle personal injury claims is the interplay between the verbal threshold, the monetary threshold, the deductible, and the monetary jurisdiction of Small Claims Court. 

For starters, claims for general damages in actions arising from motor vehicle accidents are subject to the “threshold test”. This is true whether the claim was commenced in Superior Court or Small Claims Court. Thus, a Small Claims Court deputy judge presiding over a trial is required to determine whether the plaintiff has sustained a “permanent serious disfigurement” of a “permanent, serious impairment of an important physical, mental or psychological function.”[2]

Next are the monetary threshold and deductible, which are determined by the Financial Services Regulatory Authority of Ontario (“FSRA”). Each year, the FSRA, by virtue of the Insurance Act, publishes updated statutory monetary thresholds and deductibles which are applied to claims for general damages made in motor vehicle accident cases. As of January 1, 2023, the statutory threshold is $147,889.59 and the deductible is set at $44,367.24. Both figures increase every year. This year’s deductible will therefore be applied to any award of general damages below $147,889.59. 

It is important to note the monetary threshold and deductible apply even in the case of motor vehicle personal injury claims commenced in Small Claims Court. While the current deductible clearly exceeds the Court’s $35,000.00 monetary jurisdiction that does not matter, given that the deductible is not applied until trial. The decision in Lock v Waterloo, [2011] OJ No 4989, 2011 CarswellOnt 15974 (SCJ), reminds us that while the Small Claims Court cannot award damages in excess of its monetary jurisdiction (i.e. $35,000.00), the Court may assess damages in any amount.[3] Accordingly, the statutory deductible is not deducted from the Court’s monetary jurisdiction, but rather from the assessment of general damages at trial.[4] 

For example, if general damages are assessed at $60,000.00 at trial, the deductible will reduce the plaintiff’s award to $15,632.76, which falls well within the Small Claims Court’s monetary jurisdiction. If, as another example, damages are assessed at $95,000.00, the deductible will drop the plaintiff’s award down to $50,632.76. The Court’s monetary jurisdiction will then further reduce their award to $35,000.00, the Court’s monetary limit.

Of course, as in Superior Court, claims for special damages will not be subject to the same monetary threshold and deductible.

Conclusion 

This should serve as a reminder to counsel that Small Claims Court is a venue with jurisdiction to litigate personal injury claims arising from motor vehicle accidents. However, plaintiffs deciding to commence their claims in Small Claims Court must also remember that their claims will still be subject to the verbal threshold test, and the monetary threshold and deductible, irrespective of the Court’s monetary jurisdiction. What’s more, while Small Claims may not have as onerous discovery requirements as Superior Court, it is in the bests interests of all parties to produce any documentation that is relevant to their claim or defence. Defence counsel in particular should take note of the tools at their disposal, namely the ability to request an order for productions at the settlement conference, or to request that a plaintiff be sanctioned with costs for failing to produce relevant documentation in advance of the conference. Generally speaking, counsel handling a personal injury matter in Small Claims Court should treat it like a Superior Court matter, while being mindful of the Court’s unique rules and limitations.

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