January 25, 2013
The N.B. legislature abolished N.B.’s Small Claims Court in 2010. The Small Claims Court gave claimants the option to deal with certain types of claims of up to $6,000 in a faster and simpler way, primarily by employing adjudicators instead of judges and eliminating certain procedural steps applicable to larger claims. Two completely new “expedited” court processes – Rules 79 (“Simplified Procedure”) and 80 (“Certain Claims not exceeding $30,000”) – that saw Court of Queen’s Bench judges adjudicate claims up to $75,000 and $30,000 respectively, replaced the Small Claims Court.
Effective January 1, 2013, N.B.’s current provincial government enacted a regulation reinstating a Small Claims Court in New Brunswick, and simultaneously repealed Rule 80. The new Court became operational on January 2, 2013. Key aspects of the “new” Small Claims Court are:
Click here to read the Regulation bringing to new Small Claims Court into effect.
Click here to see the new Small Claims Act.
N.B.’s “new” Small Claims Court has a number of features harkening back to the pre-2010 small claims regime, and represents a significant departure from the regime created by the now repealed Rule 80.
The Small Claims Court has two jurisdictional limits; it can only deal with:
Thus, if a claim is less than $12,500, but is not a type of claim that the Small Claims Court has the authority to adjudicate, the claimant must resort to the other available court processes. If the claim is one with which the Small Claims Court can deal, but the amount exceeds $12,500, the claimant can choose to abandon and forfeit the amount over $12,500 and proceed under the new rules; however, a claimant cannot split a single claim into two or more amounts to fit within the Small Claims Court’s monetary limit.
ADJUDICATORS NOT JUDGES
The new Court will once again utilize appointed adjudicators, rather than Court of Queen’s Bench judges, to adjudicate small claims. Adjudicators are immune from legal action, though there is a complaint process for misconduct allegedly committed during the adjudication of a claim.
There is a fresh set of forms for Small Claims Court matters, but the document filing procedure will remain largely unchanged. Some timelines for filing and serving documents, however, are different from those under Rule 80:
The rules for serving documents are also relaxed compared to those under Rule 80:
When the defendant admits, either in full or in part, a claim for a debt, then the defendant may request that the matter proceed directly to a payment hearing, at which the parties can arrange a payment schedule for amounts they agree are owed to the claimant.
RELAXED EVIDENCE RULES
As was the case with the pre-2010 Small Claims Court, the new Court has less stringent rules for the admission of evidence than under Rule 80. An adjudicator can admit oral testimony and documents as evidence at a hearing when it is:
A party is not required to file a list of the witnesses and documents upon which it intends to rely before the hearing.
MANDATORY SETTLEMENT EFFORTS
Also as in the pre-2010 small claims regime, parties are mandated to attempt to settle their dispute, and must engage in settlement conversations before a matter will be permitted to go to a hearing. There is a confidential mediation process available that will not affect the court record if settlement efforts are unsuccessful.
The new Small Claims Court rules permit an adjudicator to order a maximum of $500 in costs against a party for unreasonably bringing or defending an action. Under Rule 80, cost awards were based on the Rule 59 tariff and could thus be much greater.
A party dissatisfied with an adjudicator’s decision has two possible appeal avenues:
EFFECT ON RULES 79 AND 80
Rule 80 is repealed, and it is no longer possible to file claims under Rule 80. However, there is no effect on Rule 80 claims commenced before January 1, 2013, and furthermore such claims cannot be transferred to the Small Claims Court. There is no change to Rule 79, which remains in full force and effect and continues to apply to claims in excess of $12,500 and up to $75,000.
The reinstitution of a Small Claims Court in N.B. has a number of positive implications for litigants; however, it is questionable whether the changes will have any practical effect for corporate and institutional litigants:
Since many corporate and institutional “small” claims are likely to be between $12,501 and $75,000, and Rule 80 is repealed, these corporate and institutional litigants will have to proceed under Rule 79 for “smaller” claims. For a summary of Rule 79, click here to read McInnes Cooper’s October 7, 2011 Legal Update “Keep It Simple: The Highlights of Simplified Procedure and the New Small Claims Regime.” Thus, practically, most corporate and institutional litigants will still find themselves in the traditional court system.
Please contact your McInnes Cooper lawyer or any of member of our McInnes Cooper Insurance Team to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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