Starting a lawsuit in Small Claims Court takes time and costs money. Are there any alternatives to Small Claims Court in Ontario?
You should also consider the possibility that you might lose the case and be ordered to pay costs.
Even if you win, you will not get your money automatically.
The person or business you sued may not pay you or return your goods. If this happens, you will need to enforce (attempt to collect) the judgment, which also involves fees. It’s worth noting that if you are successful in your claim and are awarded a judgment in your favor, you may be able to recover some or all of the filing fees as part of your costs. However, this is subject to the court’s discretion, and you should consult the rules and procedures of the Small Claims Court for further information on cost recovery.
Alternatives to Small Claims Court in Ontario
If you want to resolve a conflict, you have three common alternatives to starting a lawsuit: negotiation, mediation, and arbitration.
You could send a letter or talk to the person who owes you money. Explain the situation and what you think they owe you. You can communicate directly to the other person, or you could communicate through a representative (such as a lawyer or paralegal). You might be able to come to an agreement without going to court.
Mediation is a voluntary process where a neutral third party, the mediator, helps facilitate negotiations between you and the defendant to reach a mutually agreeable resolution. However, the parties make any final agreements themselves.
If successful, the terms of the settlement are recorded and become binding. The mediator does not take the place of a lawyer. Each party is encouraged to get independent legal advice before and throughout the mediation process. Mediation services are offered by private practice mediators. Also, the court may refer your case to mediation.
Mediation works well if the parties are in the best position of solving the problem themselves and willing to reach an agreement.
An arbitrator is a neutral third party who can help you resolve a case without going to court. Parties who arbitrate a case must agree to be bound by any decision made by the arbitrator.
What is the difference between mediation and litigation?
- Litigation is the act, process, or practice of settling a dispute in a court of law
- Mediation is a voluntary process where an impartial third party neutrally assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques.
Advantages of mediation
There are some advantages of mediation:
No party is forced to use a mediator, nor are they forced to agree to a particular settlement.
Neutrally assisted negotiation
The mediator is an impartial third party who helps the parties to reach a fair and mutually acceptable settlement. Unlike a lawyer, the mediator does not represent one side or the other. A mediator’s job does not involve giving legal advice. The mediator’s role is to try to bring the parties to agreement.
The mediator does not decide for the parties, but helps them make their own decision. Moreover, the mediator may also provide substantive options to the parties.
Mediation is the more relaxed and informal process than a court lawsuit. There are no prescribed rules of procedure and few rules other than those agreed to by the parties themselves.
Confidential not public
If it is decided that the mediation should be confidential, the parties and the mediator can sign a confidentiality clause to determine the extent to which they restrict disclosure and withholding of information.
Faster and less expensive
While moving a case through standard legal channels may take months or years to resolve, mediation usually achieves a resolution in a matter of hours. Taking less time means expending less money on hourly fees and costs.
A decision made by an arbitrator is legally binding and enforceable against the parties. Arbitration is a less formal process than a trial and many people find it a more comfortable process than going to court. An arbitration process may be more complicated and expensive than mediation, but arbitration can be faster and be less expensive than suing in court. Arbitration services are offered by private practice arbitrators.
By Carlos Perdomo