On December 6, the Justice Statutes Amendment Act passed the first reading in the legislature, bringing drastic changes to the Alberta civil division (“small claims”) process one step closer to law. They will not be that “small” for much longer.

The proposed legislation amends section 9 of the Provincial Court Act to increase the limit on Provincial Court civil claims from $50,000 to $200,000. Previously, any claim over $50,000 would have to be dealt with in the Court of King’s Bench or partially abandoned to fall under the $50,000 threshold in Provincial Court.

This significant increase in the claim limit is meant to reduce pressure on courts and allow more Albertans to file claims in Provincial Court. But what impacts will that have? We considered what these effects will be and while there will be many effects, we considered three specific issues: (1) more litigation; (2) complicated production; and (3) costs considerations.

1. More Litigation in Provincial Court
   
   A quadrupled claims limit combined with less-stringent procedural rules will almost certainly see many more Albertans bringing cases to Alberta Provincial Court instead of the Court of King’s Bench. While this may be the most obvious effect of the claims increase, it may be accompanied by a range of less-obvious “side effects.”
   
   One such side effect may be more matters going to trial and being appealed at King’s Bench. Provincial Court has fewer procedural requirements than King’s Bench, which means that the expense of proceeding to trial in Provincial Court will be cheaper than in the Court of King’s Bench. Parties may be less motivated to settle before trial. An increase of trials will likely also mean an increase in appeals to the Court of King’s Bench. Parties caught up in appeals may incur greater legal expenses than if they began their action in King’s Bench in the first place.
   
   A further side effect may be a demographic shift in parties in Provincial Court. A higher claims ceiling may see more self-represented litigants or litigants’ representation by agents or other alternative representation. This would likely have a mixed effect. On the one hand, it would allow greater public access to the justice system. On the other hand, an increase in unsophisticated litigants could mean that disputes take longer, more likely to go to trial than resolve, and cost more to resolve.
    
2. Different Rules of Records Production
   
   An increase in larger claims being brought to Provincial Court may also affect document production and case assessment. Alberta courts essentially follow two different sets of rules for producing documents. Disputes in the Court of King’s Bench must follow the discovery procedures of the Alberta Rules of Court, whereas production in Provincial Court is governed by the Provincial Court Act. 
   
   In a personal injury action in King’s Bench, for example, Rule 5.5(2) requires that the plaintiff produce an affidavit of records containing relevant medical records, etc. within three months of pleadings. Rule 5.17(1) then entitles the defendant to question the plaintiff about their medical records. With these records and evidence, the defendant can assess the claim at an early stage and formulate a response long before trial, and most of the cases for this reason resolve without the necessity of a trial.
   
   In Provincial Court, production rules are much less rigid. The Provincial Court has the discretion to adopt the Rules of Court but is not obligated to. There is no prescribed affidavit of records or automatic right to questioning. Parties must simply comply with the Court’s directions to produce documents. Courts might not order production until a pre-trial conference—possibly long after the claim is filed.
   
   The defendant in the personal injury example above would not have the benefit of early assessment. They would have to either wait for an order for production or bring applications for interlocutory orders to compel records or question the plaintiff. These processes will likely become more common as larger claims begin to frequent Provincial Court.
    
3. Costs Considerations
   
   The influx of Provincial Court claims will have cost recovery implications as well. Costs currently awarded in Provincial Court are discretionary and are often pronounced based on a table of recoverable costs similar to Schedule C in the Rules of Court. The Provincial Court table stipulates different cost awards on claims ranging from $2,501 - $50,000. It, too, will be amended to reflect the increased jurisdictional limit.
   
   In some cases, parties in Provincial Court for large disputes may also have to deal with more costs than in the Court of King’s Bench. Because Provincial Court does not have the same robust production requirements as the Court of King’s Bench, parties may have to seek records through interlocutory orders and incur further costs for those applications.
   
   In addition to having a separate costs table and having to file more applications, cases normally heard in the Court of King’s Bench are subject to different costs rules in Provincial Court. The Court of King’s Bench, for example, often awards party-party costs as 40-50% of actual legal fees incurred as set out in McAllister v. Calgary (City). The Provincial Court has historically ignored this principle and has also been known to set aside contractual provisions for solicitor and client costs. This may lead to less predictability of cost awards and potentially reduce recoverable costs in Provincial Court.

Takeaway

The proposed increase of the civil claims limit from $50,000 to $200,000 opens up the Provincial Court to larger and more complex cases and will result in more cases going to Provincial Court overall. This gives litigants more flexibility in choosing which court they choose to commence their action. The differences in the procedural rules require parties commencing an action to assess the pros and cons of each Court and make a strategic decision on which to choose. For defendants, you can expect to have more claims brought in Provincial Court and the strategy to resolve those claims will be different from those actions commenced in the Court of King’s Bench.

If you have a claim, or will be facing a potential claim and require assistance in determining the best way to resolve the issue, our Disputes group can help. Contact Rob Rakochey or Anthony Burden in Calgary at (403)-260-8500 or Jeremy Taylor in Edmonton at 780-423-7624 for more information.