Small Claims at a Glance
You can use the Small Claims court if you have a dispute with a person, company or government agency involving money. An individual (including a sole proprietorship) cannot ask for more than $10,000.00. Corporations, partnerships, and other entitles cannot ask for more than $5,000.00. You can file as many claims as you want for up to $2,500.00 each during a calendar year. But you can only file 2 claims in a calendar year that ask for more than $2,500.00. Attorneys are not permitted to represent clients in small claims actions except in limited circumstances.
Small claims court is often a great resource. But a dispute in small claims court is still a court case, in a courthouse, before a judge, and the court process can be long, time consuming, and frustrating. A great alternative to small claims is mediation, where you and the other side meet with a neutral person – called a mediator – who is specially trained to help people resolve their disputes without having to go in front of a judge.
You should consider mediating your case because:
- During your court hearing, you only have about 5 or 10 minutes to present your case. In mediation, you have as long as you and the other side need to talk about your situation, even as long as 2 hours.
- Court hearings are open to the public and everything you say to the judge will be heard by everyone who is sitting in the courtroom. Mediation is confidential and private, so what you say in mediation cannot be used against you in court later.
- If you go in front of a judge, the judge has to apply the law to the facts of the case and take into account only those facts that the law considers relevant. In mediation, you can talk about other issues that may not be directly related to the law but are very important to you and how you feel about the dispute.
- A judge usually has to make a decision about money, and whether 1 side owes the other money. In mediation, the parties can reach an agreement that goes beyond the money issues and can include, for example, giving 1 side a chance to fix a problem, return property, or apologize. In mediation, you have more room to create an agreement that suits the 2 of you and your particular situation, including the possibility of a payment plan if money is owed.
- Different types of cases have different deadlines or statutes of limitations for filing. If you file a claim in court after the deadline for your type of case has passed, the judge will have to apply the law and you will lose your case. But, in mediation, you have more flexibility than the judge and can make an agreement beyond what the law requires.
- Mediation can be very helpful in disputes between neighbors and family members because of the importance of the relationships between the parties.
- When the judge makes a decision, at least 1 side usually does not like the judge's order, and often neither side is happy. In mediation, both sides usually agree on the outcome so they all accept it. Mediated agreements are often more likely to be followed than a court order that is imposed by the judge.
- If you are the plaintiff and win in court, getting paid can be very difficult and you may have to spend more money and time. If you reach an agreement through mediation, you will not need more court hearings, and the other side is more likely to pay you because they were part of reaching that agreement and had a chance to really be involved in the resolution of the dispute.
- If you are the defendant and you lose in court, the court will enter a judgment against you, which will show on your credit report and could hurt your credit. In mediation, you can reach an agreement with the plaintiff and there will not be a court judgment entered against you, so your credit will not be affected. Also, you may be able to negotiate a payment plan.
You may find the following resources helpful in preparing for your small claims matter.