When Is Small Claims Court?
The goal of small claims court is to enable people to quickly and inexpensively resolve disputes involving claims that are typically less than $ 10,000. On the other hand, figuring out when to use them is a bit tricky. Here’s a look when they’re worth it.
When should you go to small claims court?
Small claims courts are a good option if you want a decisive decision from a judge on disputes involving money, but not too large. The maximum dollar amount can range from $ 3,000 to $ 10,000 in most states, although it can go up to $ 25,000 in some (you can check the maximum amount for your state here ).
Small claims judges can only award pecuniary decisions, which means they won’t order people to do things like turn off loud music or get people into drug rehabilitation programs. Depending on the state , attorneys are allowed to go to small claims court, but they cannot collect fees. As a rule, the procedures are less strict than in a regular court, and people tend to represent themselves.
So, what kind of disputes can be brought to court at all? While the types of eligible cases vary from state to state, here are a few common scenarios:
- You loaned money, but the debtor did not return it.
- You paid for a car repair that was done incorrectly by a mechanic.
- Your former landlord did not return your bond or provide a reason for holding it (the latter is required in most states ).
- The contract or warranty has been violated by the other party and you wish to sue for pecuniary damage.
On the other hand, here are some things you cannot take to small claims court: divorce petitions, defamation (in some states), false arrest, custody disputes, and federal employee complaints against the government (these must be filed in some federal courts ).
Your biggest consideration is cost
Just because it’s called small claims court doesn’t mean it’s worth it. The most important question to ask is is it really worth your time. Let’s say you need to leave your job to go to court in a $ 2,000 dispute. When you factor in the total cost, which includes lost wages (the value of your time) and fees, filing a claim could cost you between $ 100 and $ 2,000 , possibly offsetting your financial gain.
In some cases, you may also ask that legal fees be included in what the defendant owes you. If the court rules in your favor, you will be able to reimburse the legal costs in advance. However, if the court ruled against you, or came to a compromise when both sides left with something, you probably won’t get that money back.
Consider other options first, such as mediation.
Bringing a dispute to small claims court is not the only legal option and may not actually be the best option for you. Consider these options first, as they will take much less time than courts:
- Mediation skips the hearing in favor of a voluntary mediation between the plaintiff and the defendant. An outside mediator, often a lawyer, brings both parties together and acts as an arbiter until a mutually agreed solution is reached. Mediation is especially helpful when your dispute concerns someone you know or is otherwise involved in an ongoing relationship (such as a business partner or neighbor) and there is some willingness to compromise. Most small claims courts have policies that encourage or even prescribe mediation, which is usually cheaper than going to court as a result (in fact, some mediation procedures are free). However, if you are looking for a solution that is 100% in your favor, a mediated settlement may not be for you.
- Arbitration is a similar process in small claims courts in which both parties agree to resolve their dispute through a third party, in this case an arbitrator, who is also usually a lawyer. The difference here is that the arbitrator makes a final decision, which is binding on both parties. Since there are many more voluntary arbitrators than judges, choosing arbitration will resolve the dispute much faster (and usually cheaper) than going to court, although this is usually more expensive than mediation .
- File a complaint with an impartial agency / corporate management: If your complaint is about a private company, try contacting the corporate office. If you have a dispute with a landlord, you can try to contact your local housing association . If you can solve the problem yourself, without the help of a court, so much the better.
- Just move on: no matter which path you take, the judicial system will cost you money. If a $ 500 claim takes you weeks and makes you nervous, it may be better for your overall health and happiness to refuse it.
This story was originally published in 2013 and updated on April 26, 2021 with updated context and new information.