Receivable/Accounts - Information for Credit and Collection Issues

Thursday, February 17, 2011

The Collection Agency Legal Department - Fact or Myth? Part III: Your Day In Court

Let’s start out with an ugly truth from inside the collection agency – most people don’t get their day in court.

Everyone pictures a Perry Mason television episode, with courtroom drama and witnesses and cross examination. It doesn’t really work that way, specifically in Small Claims Court in Ontario.

Firstly, 90% of defendants that my agency has personally undertaken court action against never file a defense. That means default judgment is achieved, and wages are garnished. That’s usually when I finally hear from the consumer. But it's really too late at that point.

So, let’s assume the consumer did file a defense. What happens then? Is there a trial. Well, not at first.

If a defense is filed, the matter is set down for a Settlement Conference. This is a meeting at the court with a court referee (usually a deputy judge) and the Plaintiff and Defendant to sit down and discuss the case. Formally, it’s to narrow the issue if it goes to trial, seeing which points both parties can agree to. However, the realistic main thrust is to settle the claim through compromise on both sides. The court referee will strongly encourage settlement so the matter will not go to trial. However, any negotiations that take place in the settlement conference are off the record, and nothing presented informally in the conference will be used in the trial, if there is one.

If the matter isn’t resolved in the Settlement Conference, the matter will then go to trial. You will receive a trial date, and will be expected to argue your case before the judge – this may only be a 5-15 minute presentation. You can’t present any evidence that was not in the statement of claim or defense (unless the other side agrees), so there is very little last minute drama to be had. You can have witnesses, but again, you shouldn’t be bringing them unless they are specifically named in the statement of claim or the defense.

Ultimately, the judge does not care about you or the creditor, they just want to see the matter resolved. They are not interested in emotion, long-winded presentations, or witnesses. Often I have seen judges short-tempered because people are hot-headed, expect an undue amount of time, or are not interested in settling the matter. I have even seen a case summarily thrown out by a judge because both sides took a hard-line stance – no one won there.

If you are going to appear in court, be brief, respectful, include everything in your defense ahead of time, and be prepared to compromise.


This is obviously a brief, simplistic look at the small claims court process. Be aware that this three-article series is not meant to cover every possible contingency, but to give an overview of what to expect from the creditor's viewpoint.