What Is Small Claims Court? Advice on the Small Claims Process

Small claims are a type of legal case handled less formally than many other cases and are heard by small claims courts. Generally, the procedures are simplified, allowing someone to represent themselves in a small claims case without hiring an attorney. However, the procedure does not stop anyone from getting a lawyer if they become involved in a small claims case. However, where someone intends to hire an attorney, they may have to obtain special permission from the judge to do so.

The importance of small claims courts in the United States Court System cannot be overemphasized. They are a quick, readily accessible, and inexpensive means of resolving minor civil disputes for individuals and businesses. Small claims courts are primarily designed to provide judicial resolution of disputes involving small amounts of money. Generally, civil claims cases are decided quickly and economically. Instances in which small claims courts may help resolve disputes include landlord-tenant disputes, property damage, unpaid debts or loans, and breach of contract.

Understanding Small Claims Court

Small claims courts are courts meant for the judicial determination of disputes involving limited amounts of money. They are sometimes called the people's court, as they provide informal and uncomplicated means of resolving certain civil disputes. Any individual or business may use small claims court to resolve a civil dispute if the amount in contention is small enough. Small claims courts are generally different from other regular courts. Essentially, they only handle minor disputes, and unlike other courts, small claims courts usually have a maximum monetary limit for cases they can handle, which differs by state. Depending on jurisdiction, a person may sometimes sue the government in small claims court for a limited amount of money as decided by the court system.

Differences Between Small Claims Court and Other Courts

The following are some of the major differences between small claims courts and other types of courts:

• Hiring an attorney for cases in small claims courts is not necessary, even though a person may opt to use the service of a lawyer. However, cases handled by other courts are usually complex and often require legal representation, even though it is not mandatory.
• While small claims cases are typically decided quicker in small claims courts, it may take longer to rule on cases in other regular courts.
• Filings for cases in small claims courts are relatively cheaper than in other courts.
• In small claims court, it is impossible to use discovery to obtain information about the other party in a case, including post-judgment discovery. In contrast, one party in a case may request the other party provide certain information or answer questions using the formal discovery process in other courts.
• Court rules and procedures are informal and usually simpler in small claims courts. On the other hand, the court processes in other courts are more complex. Similarly, formal rules of evidence are typically observed, and even if a person does not have an attorney, they must comply with all the court rules. This is why having legal representation in other courts is vital.
• In small claims courts, trials are usually set within a few days or weeks after filing of complaints. It may take longer in other courts.

Jurisdiction of Small Claims Courts

In the United States, small claims courts' jurisdiction varies by state, but they largely handle cases involving monetary claims below specified thresholds. In most states, small claims courts have the authority to hear civil cases in which the plaintiffs seek a monetary judgment not exceeding $25,000. For some states, it is $5,000, but the maximum limit possible in most states is $25,000. Legal matters such as name changes, guardianships, divorces, and criminal cases are unsuitable for small claims courts.

Small claims courts have jurisdiction over different geographical areas as designated by a state's Chief Court Administrator. Typically, a person may file a small claims matter in the court handling small claims cases for the town or city where they live, where the defendant lives or has a business, or where the injury or transaction happened. Similarly, a business entity may file a small claims case in the court handling small claims cases for the town or city where the defendant is doing business, where the defendant lives, or where the transaction or injury took place.

What Are Small Claims?

Small claimsare legal procedures for determining civil disputes involving a considerably small amount of money. Typically, depending on the state, they include legal claims that fall below a statutory threshold, mostly between $2,500 and $25,000. The limit may be lower in some states.

Common examples of small claims cases include the following:

• Cases between landlord and tenant to resolve the disagreement over a security deposit in a residential tenant and landlord relationship.
• Cases involving the recovery of money where the amount claimed does not exceed a certain threshold, excluding any costs that may be awarded by the court and interest. For instance, a situation where a person or business paid for a good or service that was not delivered, and the individual or company seeks a refund.
• A case where a person lends money to someone and the borrower refuses to pay their obligation
• A motorist runs into another person's car and dents the victim's car door but refuses to pay for repairs. Such a dispute may be resolved in small claims court.
• If an individual was harmed by another person's dog and wants to be paid, they may file small claims at the small claims court.

Right to File a Small Claim

Any natural person or business has a right to file small claims, but there may be certain requirements for filing depending on the state. For instance, some states require a person to be at least 18 years old to be eligible to file small claims cases. The person who files a claim is known as the plaintiff, while the individual against whom the claim is filed is referred to as the defendant.

Only the original owner of a claim can file it or sue someone in a small claims court. For a business that wants to file a small claims case, any of its employees, directors, or officers qualify to act and file on behalf of the company. However, only certain civil cases, typically monetary disputes, whose amount in contention does not exceed a particular threshold in dollar amount qualify as small claims and may be filed by eligible individuals in small claims court. The maximum limit is around $25,000 for most jurisdictions/states.

How Does Small Claims Court Work?

Every jurisdiction has varying processes and approaches for handling small claims court cases. While there is ultimately a universal procedure that most states adopt in handling eligible civil disputes in small claims courts, it is recommended to research a state's law and process on small claims to ensure compliance. Generally, the process is initiated by the petitioner or complainant who files a petition with the court, stating the reason for filing the complaint. Afterward, the petitioner must serve the defendant a copy of the petition or paperwork through an authorized process server. Once the defendant is served, a court date will be scheduled to hear the case, and the judge will decide afterward.

Even though small claims procedures may vary by state, small claims courts are generally more accessible to citizens than other types of courts. This is why they are called the people's courts. Also, compared to other types of civil cases, small claims court rules are mostly informal, facilitating the possibility of people representing themselves without having to hire lawyers. The processes are generally streamlined to enable quick and inexpensive resolution of small claims cases.

Filing a Small Claim

Before filing small claims in a small claims court, a complainant should first make a demand, if possible. This entails sending a demand letter to the defendant asking them to pay what is owed, and where the claim is for possession of a property, asking the defendant to return the property. If the defendant refuses to yield to the demand, the petitioner can then initiate the small claims process. By law, there are limits on how long a petitioner has to file a small claims lawsuit. This is called a statute of limitations. In most cases, it is expected that a person files a small claims case within 2 years of when the dispute occurred.

Generally, a petitioner must file a small claims complaint in the right court and jurisdiction. Otherwise, it will be dismissed unless the defendant personally shows up at the hearing and agrees to the hearing of the case. Usually, a small claims case should be filed in the small claims court in the municipality where the petitioner lives or where the defendant works or does business. They may also file it in the jurisdiction where the matter that prompted the petitioner's complaint occurred. Before entering the small claims process, the complainant should ensure they have all documentation in order and determine if the amount in dispute does not exceed the state's allowed maximum. The following are the major steps to filing a small claims case in the United States:

• The petitioner files a complaint in the right court using a designated form provider by the court clerk. Typically, the reason for initiating the small claims court case must be stated. A citation will be generated after filing the form with the clerk, which the petitioner is expected to serve on the defendant. The petitioner will be required to pay all the applicable filing fees. They are inexpensive compared to other types of civil court cases. Information needed to complete the petition form will, at a minimum, include the following:
  • The defendant's name
  •  The defendant's address
  • The basis of the claim and the disputed amount
• The complainant serves the defendants copies of the citation, which serves as a formal notice of the small claims suit, using the service of an authorized and experienced process server.
• The court hears the case as scheduled.

The Court Process

All parties involved in a small claims case should be present during the hearing of the matter. If the case involves a business as the petitioner or defendant, an employee or director of the company will represent them. Generally, small claims cases are tried in an informal manner and do not necessarily require either party to hire a lawyer. At trial, most judges will briefly explain the procedure to be used. Each party may be asked to swear to tell nothing but the truth and will have the opportunity to explain to the judge or magistrate why judgment should be entered in their favor without interruption. They will also present evidence to back up their claims or defense.

Generally, the judge has the discretion to admit useful evidence. Even if a piece of evidence does not adhere to all the legal requirements, the judge will still welcome it since the proceedings at small claims courts are less formal. However, the judge may not permit witnesses to testify until they have sworn privileged communications, which are statements by certain individuals barred by statutes from being used in any trial. At the end of a small claims case, the judge or magistrate will enter their decision/judgment for either the complainant or the defendant. If a defendant receives proper notice and fails to appear in court on the date scheduled for small claims hearing, the judge will enter judgment in favor of the petitioner for the amount claimed.

Advantages and Disadvantages of Small Claims Court

Even though small claims courts are generally known for their simplicity as the people's courts, they also have some setbacks. The advantages and disadvantages of the court are discussed below:

Pros

The following are the advantages of filing a case at a small claims court in the United States:

• The fee required for the process is generally inexpensive and can be afforded by most people.
• The court environment and process are less intimidating because the process is generally informal, unlike other courts.
• The petitioner may appear pro se. In other words, they do not require legal representation, and in most cases, the court will provide forms to make the process easier.
• Due to the informal nature of the court process, small claims court cases are usually heard and decided more quickly. The court does not apply formal evidentiary or discovery rules in the proceedings, making the process less time-consuming and faster.

Cons

Common disadvantages of using small claims court include the following:

• Due to the informal nature of small claims court processes, there is potential for loose ends, particularly if a party appears pro se.
• Sometimes, the outcome of a case in small claims court may be unpredictable.
• Unlike some other courts, rather than injunctive relief, small claims courts may only grant monetary damages.
• Trusting evidence presented by the other party in a small claims case can be difficult since small claims courts have no formal discovery or evidentiary rules.
• The possible damages awarded by small claims courts cannot exceed a set maximum limit, including court courts, depending on the state or jurisdiction.
• Enforcing the collection of judgment made by a small claims court may sometimes be challenging.
• While some states give people a right to appeal small claims judgments, some do not. The decision of the small claims court is final in states where there is no right to appeal a small claims judgment.

What Happens After a Small Claims Court Judgment?

Once a small claims court decides on a small claims case, the judgment will be prepared in written form and filed with the court. Both parties involved in the case (the plaintiff and defendant) will each receive a copy of the judgment. If the plaintiff wins, the court is not responsible for collecting the money owed to the complainant. Instead, the defendant will be ordered to pay money owed to the plaintiff. However, if the defendant fails to pay as ordered, the plaintiff is allowed to take further actions to collect on the judgment.

Collecting the Judgment

When a small claims court issues an order instructing a party to pay money owed to the other party in the case, it is unlikely that the money will be paid immediately. The responsibility of collecting the judgment lies solely with the plaintiff. Generally, collecting a small claims court judgment can be challenging and frustrating, especially if the defendant is unwilling to pay voluntarily. Even though small claims court decisions carry legal weight,  they may be hard and sometimes impossible to enforce. Besides refusing to pay, the defendant may sometimes not even have the money.

Where collecting a judgment becomes challenging, there are enforcement procedures that may be explored to get a defendant to pay. However, these measures require extra effort, including funding, on the plaintiff's part. One such measure is for the winning party (plaintiff) to have the defendant's bank account or wages garnished. Similarly, the plaintiff may identify where the defendant has property (assets) and take legal steps to seize such assets.

In a bid to collect a small claims judgment, a plaintiff may have some of the defendant's personal assets seized, put a lien on their real property, and have some of their major personal property seized by law enforcement. The plaintiff will have to part with some money to enforce judgment using these means. However, such costs are recoverable from the defendant. If a winning party is willing to take these extra actions to collect a judgment, they must file documents with the court and serve copies of all correspondence or motions filed with the court on the defendant.

Where a plaintiff cannot identify whether the defendant (losing party) has a bank account or assets, they may ask the court to get the defendant to answer under oath questions about their property. If the defendant does not have a bank account, job, significant personal property, or real property, getting a small claims judgment may be impossible.

Appealing a Small Claims Court Decision

While the rules covering appeals from small claims court decisions differ by state, some states do not allow appeals for small claims cases. Generally, it is impossible for anyone who did not appear in small claims court to appeal the court's decision. The right to appeal is usually reserved for those who showed up in small claims courts. Some states permit a losing defendant to appeal but do not allow the plaintiff to do so, save to appeal from counterclaims initiated by the losing defendant.

Typically, the dissatisfied party must file an appeal promptly. In most states that allow appeals of small claims court judgments, this is usually within 10 and 30 days of receiving a copy of the judgment. In some states, the losing party has only two days to appeal a small claims court decision. So, parties involved in a small claims case need to research the rules in their state.

In most cases, appeals must be filed using a form provided by the small claims court. It is generally recommended that a person get a lawyer to help present the appeal. Appealing a small claims court judgment generally involves additional expenses, including filing fees, the cost of preparing the hearing transcript, and attorney fees if hiring a lawyer to present the appeal.

Tips for Success in Small Claims Court

Parties to small claims cases appear pro se in most situations. So, the importance of understanding a small claims court process and thorough preparation for court hearings cannot be overstated. Generally, the following tips can help a petitioner succeed in small claims courts:

• Learning as much as possible about the processes, procedures, and rules in the small claims courts within a locality.
• Securing a jurisdiction. There are small claims courts in most jurisdictions in the United States.
• Preparing the complaint or case and gathering the required documentation.
• If there is a witness, the petitioner should find them and prepare them if they are willing to testify in court.
• Practicing how to present the case in court.
• Appearing in court and making a good impression on the judge by being respectful.
• Following up with the small claims court decision after winning the case.

Preparing Your Case

A small claims petitioner needs to prepare their case thoroughly if they must succeed in the small claims court. First, they should gather enough information and evidence for their claim before filing any paperwork with the court. These will largely include photos, receipts, contract agreements, and reports related to the incident or transaction. In addition, they should gather information about the defendant, including their legal name, residential address, office address, email address, and phone number. This is essential because it is technically impossible to serve a defendant whose whereabouts are unknown a copy of the petitioner's complaint.

As part of the preparation for a small claims case, the petitioner should practice how to prepare their case in court. For instance, they may prepare a written script with questions they intend to ask the defendant and their witness, if any. The script should stick to the facts of the case. Similarly, a petitioner may visit the courtroom where the case will be heard to observe other small claims proceedings. Doing this can help them familiarize themselves with the courtroom procedures, including how others present their case and how the judge interacts with the parties to a small claims case.

Common Mistakes to Avoid

The following are some of the common mistakes people make in small claims cases:

• Failing to explore other options before heading to court.
•  Inadequate preparation.
• Underestimating the other party in the case.
• Missing filing deadlines.
• Interrupting the judge and the other party.

Doing the following should help avoid these common mistakes:

• Do not rush into filing small claims cases. Several other options may be considered, like getting the help of a mediator and settling the matter behind closed doors.
• Take time to organize and prepare the case, including collecting evidence and all the required documents.
• Never underestimate the other party in court, even if they seem like a real piece of cake. They stand a good chance of winning if they are more prepared.
• Make sure to complete all filings before the deadlines.
• Even if proceedings in small claims courts are less formal, never interrupt the judge or the other party in the case. Parties should wait until it is their turn to speak.

Small claims courts are an important component of the legal system in any state. They help resolve minor disputes and recover money or property worth less than a certain limit set by the state. In most cases, the parties do not require legal representation, as the court process is less formal.

Regardless of the state where a person lives in the United States, understanding the small claims process before heading to a small claims court is crucial. Knowing the limitations, rules, and procedures of the court will generally help an individual prepare adequately for their case. Ultimately, this will increase the chances of success on their small claims cases. In addition, the need for proper documentation and appearing in court with confidence and respect to everyone involved in the case cannot be overstated.