"Small Claims" Get Bigger—Increases to Monetary Limit for Small Claims in Alberta Will Impact Wrongful Dismissal Litigation

April 10, 2023

Written By John Gilmore, Keely Cameron and Michael VanderMeer

In December 2022, the Alberta legislature passed a bill allowing for an increase to the limit on civil claims in the Alberta Court of Justice (formerly, the Provincial Court of Alberta and sometimes referred to as "small claims court") from the existing maximum of $50,000 to up to $200,000. On April 5, 2023, following a survey of the courts and legal community, the government announced that the civil claim limit will raise to $100,000, effective August 1, 2023.

Any civil claims for amounts above $100,000 will still have to be brought at the Court of the King's Bench.

There are significant procedural differences between the Court of Justice and the Court of the King's Bench. As a result, the Alberta government's decision to double the maximum claim amount at the Court of Justice is likely to significantly alter the civil litigation landscape in Alberta, especially in the area of wrongful dismissal.

Differences Between Court of Justice and the Court of the King's Bench

The Court of Justice was created under the authority of the Provincial Court Act. In addition to hearing criminal, regulatory and family matters, it also hears civil claims of up to the prescribed amount, which will soon be $100,000.

The Court of Justice was designed to offer parties a comparatively accessible and streamlined means of litigating disputes. Some of the notable differences between the Court of Justice and the Court of the King's Bench processes include:

• The Court of Justice has its own procedural requirements with fewer required steps, although it may adopt and adapt King's Bench procedures from the Rules of Court.
• The procedural rules for the Court of Justice do not automatically establish timelines and processes by which the parties will be required to produce all relevant documents, or be presented for questioning, prior to trial.
• Either party to a Court of Justice claim has the ability to apply for document production or examination in advance of the trial, but leave of the Court will need to be sought.
• Once a claim has been filed, the Court of Justice has the discretion to send the case to mediation where the parties are encouraged to resolve the issue and/or discuss procedural issues, or to trial.
• The Court of Justice does not require parties to be represented by legal counsel.
• Anyone who wishes to pursue a claim in the Court of Justice waives their right to recover anything above that limit. However, there may be negative cost consequences if someone commences a claim at the Court of the King's Bench and it becomes clear that it should have been brought at the Court of Justice.
• Decisions of the Court of Justice may be appealed to the Court of the King's Bench.

Key Takeaways for Alberta Employers

With the limit for civil claims in the Court of Justice increasing to $100,000 on August 1, 2023, Alberta employers should begin factoring that reality into their decisions regarding terminations and layoffs.

Given that any termination arising now will likely be subject to these changes, Alberta employers must give immediate attention to the decision to terminate an employee with or without cause, and the amount of any without prejudice settlement offer. With greater access to expeditious and cost-effective litigation in the Court of Justice, employee litigants may be less concerned about the cost and procedural barriers of civil litigation when termination of employment occurs.

In advance of this change, employers should also expect that they will face more claims and in a less procedurally onerous environment. While the underlying law will remain the same, litigation strategies may need to develop to take into account the benefits and disadvantages of litigating at the Court of Justice.

If you have any questions or concerns about these changes or are facing any employment related litigation in either the Court of Justice or the Court of the King's Bench, please contact the Bennett Jones Employment Services group.

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