Small Claims

The first question in deciding whether or not you have a Small Claims matter is to realize that Small Claims was designed to enable persons to avoid incurring attorney's fees for representation in disputes where the attorney's fees might cost more than the amount of the lawsuit. Thus, it is the preferred court to bring a lawsuit against a person or entity when the amount of the lawsuit is under $5,000.00.

Before you begin to analyze the amount of the lawsuit, you should remember that since you cannot have an attorney in small claims in most instances, you will be representing yourself. Thus, you will be doing everything from start to finish and you will be spending your own time. While certain tasks might be delegated, it is a good idea to control each aspect of your case. You will not, absent special circumstances, be allowed to have another person appear and argue your case in court. If you are handicapped, check the rules regarding any special procedures with the Small Claims Court clerk. Also, if you are one of several parties being sued, or having an interest in this case, you might allow the other person suing, or being sued with you, to do most of the talking, but you must appear and you must file any papers required of you.

Your failure to appear is the same as forfeiting a game. If you are being sued and fail to appear in court, or fail to file certain documents, a judgment may be entered against you. If you are suing another person and you fail to appear or file certain documents your case may be dismissed and you cannot collect against the party whom you filed the lawsuit.

As we mentioned, in every lawsuit, whether large or small, many aspects of the lawsuit are governed by the amount of the lawsuit. It makes no sense to pay a $5,000 retainer fee to an attorney to sue a person for causing $35 damage to your car door. Likewise, it makes no sense to hire such a lawyer to sue the cleaners for a new blouse worth $150 which was lost by the cleaners.

However, it may be sensible if someone owes you a large sum such as $25,000 to hire a lawyer at the cost of $5,000 in an attempt to recover the money, if it is likely the amount can be recovered. In any lawsuit, the amount of money you will spend to win your case is a decision made by you, not an attorney. An attorney can suggest the approximate costs and fees in a lawsuit, but no attorney can guarantee the costs involved in any lawsuit.

The Small Claims Court is designed to accept cases, without attorneys representing the parties, for less than a certain amount of money, usually $2,500. You should call your local Small Claims Court Clerk to find the actual limits in your state.

Thus, if your case involves an amount of $1,000 and you feel that a person owes you this amount, you may want to sue in Small Claims Court. This will enable a judge to decide if you are right or wrong, and settle the matter. Such an amount might be just right for Small Claims, since it is certainly too little of an amount to retain an attorney to handle. If the amount for which you are suing is a little over the jurisdictional limit, for example the limit is $2,500 and you have lost $3,000, you might consider the following analysis. First, it is possible, but unlikely the Small Claims court judge will award more than the $2,500, assuming you won everything. [Always ask, even if the judge refuses, just in case he might say yes]. So in order to recover the full $3,000 you might have to hire an attorney. But, most reputable attorneys will not bring a lawsuit, which may involve several years of legal wrangling, for under several thousand dollar retainer fees. You should check with your Plan Attorney for the exact fees.

In short, you may spend several thousand dollars to attempt to win $3,000. While this may be your desire, it certainly makes no sense economically. You may easily end up spending more than you recover. Also, the time spent in recovering any money award might be several years depending upon your local court backlog.

For this reason, it is worth it to reconsider Small Claims. Even though you may lose $500 of the amount you are seeking, you might still recover $2,500 in a short period of time, usually ninety days or less and not have any legal expenses, except the charges associated with filing your lawsuit.

Also, if the amount for which you are suing is under $100, you may want to consider whether it is worth it to sue at all, for several reasons. First, the filing fees might cost close to this amount and if you lost, you might be out of pocket twice the amount of money.

Second, the American Legal System is not a system founded on principle. That is, it is not a good system to simply maintain a lawsuit just to get even with someone. Nor does it punish very well. Most Americans believe that "I want to sue that person and punish him/her for not paying me and causing me grief." While it depends on the type of matter, most cases in Small Claims Court, and most lawsuits in general, will not punish a person for not paying. The court may order him/her to pay, and sometimes award interest and fees to the person who had to sue, but the courts, in most cases, will not award a fee to punish. [Of course there are exceptions to this general rule.]

Thus, if you are suing for $ 60, and the filing fees are $50, the total award you receive might be $110 assuming you win. However, to get this award, you have to take time off of work to file the papers, you might have to spend money researching your case, and you have to take another day or days off of work for court. Clearly, such a lawsuit on principle makes sense because you won, but it sure makes no economic sense.

On the other hand, if the amount is significantly over the Small Claims Court jurisdictional amount or is over $10,000 it is crucial to call your Plan Attorney through our toll-free Legal Hotline. You can discuss this matter at no charge with your Plan Attorney. If the amount you are seeking is between $2,500 and $10,000 it may be a judgment call on your part as to whether to pay attorneys fees, or whether to sue in Small Claims Court. If you are seeking this amount of damages you should understand your attorneys fees may be significant and might eat up a good portion of the $10,000.

Also, certain cases are not proper for Small Claims Court. Several Examples: Marital disputes and divorces, child custody and support issues, real estate matters involving significant amounts of property, bankruptcy, cases involving actual personal injuries, criminal acts, or matters seeking injunctions or similar relief, such as TROs, all are not usually brought in Small Claims Court. Also improper for Small Claims are specialized areas such as patents, income tax, immigration or securities matters. For these areas, it is crucial to use the Legal Hotline and call your Plan Attorney to discuss these matters at no cost to you.

Points to Remember

• Small Claims usually means the amount of the suit is under $5,000.00 (check your local Small Claims Court to determine the actual limits in your state).
• You must usually represent yourself in most cases.
• You must appear in court at the appointed date and time.
• Evaluate whether the suit is worth the time and energy.
• Some cases that are not appropriate for Small Claims Court are: marital disputes and divorces, child custody and support issues, real estate matters involving significant amounts of property, bankruptcy, personal injury cases, criminal acts, or matters seeking injunctions or similar relief, patents, income tax, immigration or securities matters. If you have one of these types of matters, call the Legal Access Hotline for the number of your Plan Attorney.