When potential clients come to me with problems, at the end of the first meeting I always ask – what is the best way to achieve the client’s goal? Depending on the amount in controversy, I may recommend that the potential client consider small claims court, even though that means I will not be involved. In small claims court, individuals and businesses can choose to resolve certain types disputes in court without attorneys.
So what are the differences between a small claims lawsuit and a typical, civil lawsuit? Here are a few.
Maximum Recovery: The most a plaintiff can ask for in small claims court is $6,000, even if the plaintiff believes it is entitled to more. In other words, if a plaintiff is owed $10,000 on a contract, the largest judgment it could recover is $6,000. On January 1, 2021, the maximum increases to $6,500. On January 1, 2024, it increases to $7,000. As a plaintiff, this may be a disadvantage if potential damages exceed $6,000. But as a defendant, it may be an advantage because there will be a ceiling on damages.
No Attorneys: Attorneys are not allowed represent parties in small claims court. So attorney fees are avoided, but parties will not have a lawyer representing their interests and answering questions.
Expedited Case: Cases in small claims court may get resolved quicker than a typical civil lawsuit, perhaps in as little as one hearing. But you may not have a sufficient opportunity to further investigate your claims or uncover new facts while the lawsuit is pending.
The next time you have a legal issue but are concerned about attorney fees, consider whether a small claims lawsuit is right for you. Of course, you can also try to avoid a lawsuit through out-of-court options, such as mediation.
For information on filing a lawsuit in small claims court, click here.
For a list of frequently asked questions, click here.
The above is for informational purposes only and not a complete or exhaustive summary of the law regarding small claims court. The appropriate or best strategy, including but not limited to whether you should proceed in small claims court, will depend on the facts of each case.