Starting a Small Claim (20:V)

A. Settlement Letter

The fastest and least expensive way to resolve a dispute is to tell the other person what you are claiming from them and why you are claiming it. If the other person agrees with the amount or responds in a manner that leads to a settlement, both parties will save the time, effort, expense, and uncertainty of a lawsuit.

Bona fide attempts to settle may involve concessions and admissions of liability. For example, a claimant may offer to settle for less than the claim to account for the cost, time investment, and risk of going to trial. A defendant, for example, may admit liability but dispute the amount owed. Whenever parties can agree on certain points, the likelihood of settlement increases.

Because of the strong public interest in settlement, these bona fide settlement attempts are protected by settlement privilege. This means that, if the matter is not settled, any reductions in the claim or admissions made disappear and cannot be used against the party who made them38. It is prudent to include the words “WITHOUT PREJUDICE” in correspondence involving bona fide attempts to settle to indicate that the party sending the document wishes to rely on settlement privilege; settlement privilege will still apply, however, even if “WITHOUT PREJUDICE” is not included.

Settlement letters should be brief, factual, and clearly state the amount claimed even if that amount exceeds $25,000. Settlement letters should have a courteous tone as a letter that invokes a hostile reaction from the recipient will be counter-productive. A party writing a settlement letter should never threaten criminal or regulatory penalties; extortion is a criminal offence.

B. Identifying the Defendant(s)

When drafting a notice of claim and throughout the litigation process, it is important to stick to the relevant facts. Court is not a forum for airing grievances that do not give rise to a claim. For example, in a claim for breach of contract, the fact that the defendant acted rudely is generally not relevant to the claim. Including irrelevant facts confuses the issues, wastes time, raises tensions, and makes it more difficult to successfully prove the claim. A good rule to follow for each type of claim is to include only the facts necessary to satisfy the legal test for that type of claim; brief is better.

It is important to make your cause of action (e.g., negligence, breach of contract, etc.), type of damages, and amount of damages very clear. Do not let the judge guess what you want.

1. Suing a Business

a) Corporation

A corporation is a legal entity that is separate from its shareholders and employees. It is identified by a corporate designation such as Incorporated, Limited, Corporation, their abbreviations Inc., Ltd., or Corp., or their French equivalent following the business name.

A corporation may register a sole proprietorship or partnership and operate under that name. To sue such a company, a claimant should include both the corporate name and the name of the proprietorship or partnership: e.g., 0123456 BC Ltd. dba Joe’ s Bakery. The letters dba stand for “doing business as”. Variations such as “coba” meaning “carrying on business as” are also acceptable.

A corporation can enter into contracts and can sue or be sued. Generally speaking, a corporation’ s shareholders, officers, directors, and employees are not liable for the actions or liabilities of the corporation or their own actions while acting within the scope of their office or employment. A person who feels that a shareholder, director, officer, or employee of a corporation might be liable should obtain legal advice.

Corporations may be either provincially or federally incorporated. A federal company is incorporated under the Canada Business Corporations Act, RSC 1985, c. C-44 [CBCA]. A BC corporation is incorporated under the Business Corporations Act, SBC 2002, c 57 [BCBCA]. Corporations may also be registered under the laws of the other provinces and territories.

Because a corporation can have multiple locations, every corporation, including non-BCBCA corporations, doing business in BC must provide an address where it can be served with notices of claim and other important documents. A claimant must perform a company search to obtain the current registered address for the defendant corporation3940. This address must be listed as the corporation’ s address on the notice of claim form.

b) Partnership

A partnership can exist between one or more persons and is governed by the Partnership Act, RSBC 1996, c 348 [PA]. A person includes a corporation.

The rules for determining whether a partnership exists are set out in s 4 of the PA. Generally speaking, all partners are personally liable for the debts of the business: s 7 of the PA. As it is impossible to tell whether a business is a partnership or a sole proprietorship from the name alone, a claimant should perform a company search to learn the true structure of the business as well as the name and address of each partner.

The proper way to list each partner on the notice of claim is:

Jane Doe d.b.a. XYZ Partnership

John Doe d.b.a. XYZ Partnership

ABC Company Ltd. d.b.a. XYZ Partnership

NOTE: “d.b.a.” stands for “doing business as”NOTE: One should be careful to not confuse partnerships with limited partnerships (LP) or limited liability partnerships (LLP). c)Sole Proprietorship A sole proprietorship allows a single person or corporation to do business under a business name. Sole proprietorships are registered under Part 4 of the PA. A sole proprietor is personally responsible for the debts of the business. As it is impossible to tell whether a business is a partnership or a sole proprietorship from the name alone, a claimant should perform a company search to learn the true structure of the business as well as the name and address of the proprietor. The proper way to list a sole proprietor on the notice of claim is: Jane Doe d.b.a. XYZ Company John Doe d.b.a. XYZ Company ABC Company Ltd. d.b.a. XYZ Company NOTE: “d.b.a.” stands for “doing business as”d)Other For other forms of businesses such as limited partnerships (LP), limited liability partnerships (LLP), and unlimited liability corporations (ULC), legal advice isrecommended. 2.Suing a Person over 1 9 Years Old Do not use titles such as Mr., Mrs. or Ms. Use full names, not initials (i.e., “Dr. D. Smith”should be “Doris Smith”). Claimants may sue more than one defendant if the claim against each defendant is related. Divide the “To” space in half and use one half for the name and address of each defendant; alternatively, the notice of claim filing assistant41 makes it convenient to add multiple defendants. 3.Suing a Society A society is a type of not-for-profit corporation registered pursuant to the Society Act, RSBC 1996, c 433. The procedure and principles for suing a society are the same as for corporations. A company search is required to ascertain the society’ s registered address42. 4.Suing I.C.B.C. A claimant who is suing for the deductible portion of an insurance policy must name both the driver and the registered owner of the vehicle as defendants rather than ICBC. A claimant who only has the number plate of the vehicle can obtain the owner’ s name by writing a letter to ICBC’ s Vehicle Records Office. ICBC Insurance Enquiries 151 West Esplanade North Vancouver, BC V7M 3H9 Telephone: (604) 661-2233or 1(800) 464-5050