Category: Small Claims FAQ

What are small claims courts?

Small Claims Courts are especially designed to handle disputes between individuals, or an individual making a claim against a business, where the amount of money involved is relatively “small” – at least in terms of the cases courts usually decide.

Small Claims Courts typically can hear disputes that involve amounts that range from $1,000 to $5,000.

The precise limit depends on the local laws in each jurisdiction. In some states, Small Claims Courts can also handle minor disputes between individuals and a government agency.

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Is the matter more serious than is appropriate for a small claims court? For example, for you are worried about domestic violence, the $200 to replace a door your ex-spouse kicked in may not be the real issue.

We urge you to be very careful before starting any Small Claims action, and to consider consulting with a lawyer before you do. For example, before you start suit consider the following:

There is always the possibility of a “counter claim”. If you sue someone in Small Claims Court, it is usually possible for the person you sue to “counterclaim” which essentially means to sue you back. If so, this can mean that you may not collect on the fender bender, and instead may have to pay the other side’s claim for damages to its car.

Limited damages are available. Every Small Claims Court has a maximum amount it can award. If the maximum amount you can recover in your state’s Small Claims Court is $2,000 and you have the potential to recover $10,000, you would be giving up your right to seek the extra $8,000.

Simplified procedures may hurt you. For example, in Small Claims Court you generally can’t get to examine records that may be very important to your case which the other side – or third parties – have.

Limited rights to appeal. What the judge or court appointed arbitrator says is usually final, even if the judge or arbitrator made a serious error in terms of the facts or the law.

Lack of “punitive damages” and “value as precedent”. If the defendant’s conduct was outrageous, in some instances it is possible for a regular court to award “punitive damages” to punish the defendant and discourage others from similar behavior. Most Small Claims Courts can not award “punitive damages.

Small Claims decisions are rarely useful as “precedent” in other cases involving the same issue or the same party. So if you were just one of many victims of a fraudulent sales scheme or defective product, and you want “to teach the wrongdoer a lesson” a Small Claims action may not be the way to go.

Impact on your other rights. Say you successfully sue for the damage to your car. That may preclude you from recovering anything for the whiplash that you later recognize was caused by the fender bender. Also, if a passenger in your car later sues you, you may not be able to turn around and sue the other driver.

Again, in many cases it may makes sense to consult with an attorney before you bring suit in Small Claims Court.

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If I lose, what happens?

You may have to pay the other side’s “chargeable” costs and expenses. This means certain money they may have had to pay, but not their lawyer’s fees. In theory at least you sometimes may be then sued for “malicious prosecution” or “abuse of process”.

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How long does it take to learn if I won after the trial?

In a few cases the judge or arbitrator will decide right there. Most do not. They don’t want to get into an argument with the losing party — or a winning party who feels she should have won more.

Generally the results are sent by mail to the parties, even if the decision is clear to the judge or arbitrator right away. This may take a few days or much longer.

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