The majority of parties to a Small Claims Court action are regular folks and small businesses who want to recover relatively miniscule damage awards for things like sums like sofas that were never returned to a proper owner, or three months of rent that was never paid. In Ontario’s Small Claims Court, the maximum claim for damages is $10,000. Because the claims are so small, it makes little sense for a party to expend vast sums of money on lawyer’s fees and engage in the technical and costly legal manoeuvring common in courts where the stakes are higher.
Taking the clientele and goals of Small Claims Court into account, the paramount guiding principle of Small Claims Courts is that parties should be able to conduct their own cases without recourse to a lawyer. For this reason, the rules of civil procedure and evidence tend to be simplified so that they are accessible and easy to follow for the unrepresented party who is typically unschooled in the formal law.
To encourage parties to resolve the dispute within the framework of such low key legal expenditures, the maximum costs awarded against a losing party are generally set very low. Such a low ceiling in fact discourages parties from injecting their claim with the expertise of lawyer.