What Happens In Small Claims Court?

It's expensive to litigate a case in trial courts. There are many complex court rules and laws that only attorneys understand. Without a lawyer, you're at a big disadvantage. Yet, hiring an attorney may cost more than losing these low-dollar cases. Small claims court exists to solve this problem. In small claims court, the rules and procedures are relaxed so that non-lawyers can argue their own cases. Court costs, such as filing fees, are lower. As a result, small claims court hearings are much less expensive.

Small claims court is often not a separate court. Instead, it's the small claims division within a district court or superior court. The district or superior court judge will hear the case but will apply the special rules for small claims cases. This article will explore what kinds of cases you can bring to a small claims court and how this court differs from other courts.

Small Claims Is a Court of Limited Jurisdiction

Only small-dollar cases are allowed in small claims courts. Every state has its own limit for this amount for small claims actions. Sometimes the limits vary within the same state among the different counties and cities. The amount in controversy is the amount you're suing or being sued for. Usually, the ceiling for these lawsuits is between $3,000 and $15,000. Some states may have lower ceilings while others have higher ceilings.

Small claims courts are usually only allowed to hear civil cases for money damages. In some states, the small claims courts may be able to hear eviction cases. Small claims courts don’t  hear domestic relations matters (like divorce or child support matters), injunctive relief cases, or personal injury cases. Because the kinds of cases that can be heard in small claims courts are limited, it's considered a court of limited jurisdiction.

Examples of appropriate cases for small claims court include:

• You sue your former landlord for not returning your $600 security deposit.

• Your car is under warranty, but the dealership refused to repair it for free or at least for the amount provided for in the warranty. You sue to recover the money you had to pay.

• In many states, credit card companies and debt-buyers will sue in small claims courts.

In the second example above, had you not paid the dealership to repair the car, you probably wouldn't be able to bring the case in small claims court. That is, if you were suing so that the court would order the dealership to repair the car, it wouldn't be a case for a money judgment. This would probably disqualify it from small claims court. You would bring that type of case in the district court or the superior court.

Credit card companies may be effectively barred from small claims courts in states where lawyers aren't allowed. Credit card companies need to hire attorneys to represent them.

In some states, there may be a smaller ceiling for companies that sue in small claims court. For example, in cases where a person files the suit, the limit might be $10,000. But, for a company bringing a lawsuit, it may be $5,000. These types of rules limit the ability of large companies to use attorneys against unrepresented individuals in small claims courts. This helps level the playing field. Yet, many states don’t have such protections.

How Small Claims Court Is Different Than Other Courts

There are many limitations on the tactics available in small claims court. These limitations exist to make the cases simple enough for people who haven't spent years in law school and courtrooms. For example, in small claims court, most cases don’t have a discovery period, which is a formal period to ask for and gather evidence. Where discovery is allowed, the parties usually need to get permission from the judge. Discovery includes techniques like interrogatories, requests for production, and depositions. These techniques are used to exchange information necessary for the trial preparation.

Interrogatories are written questions sent to the opposing party. These questions must be answered within a set time limit. Depositions are in-person questioning of an opposing party. Court reporters record the testimony given in depositions. Requests for production are used to exchange documents necessary for trial preparation.

With small claims courts, such discovery procedures are usually streamlined. The discovery process may consist of exchanging information in the hall outside the courtroom on your small claims hearing date. This approach prevents hours of going over documents and questioning witnesses.

Instead of the legal pleadings used in higher-level courts, small claims courts may have a set of court forms for you to use. You can usually find these forms on the court's website. You may want to look at the FAQ if you have trouble finding the forms.

Although jury trials are allowed in some small claims courts, they almost never happen. Trying to convince a jury without knowing the rules of evidence and rules of civil procedure would put a non-attorney at a great disadvantage. 

The right to appeal a small claims judgment is often restricted. The plaintiff (the party suing) may not have a right of appeal if they lose the case. The defendant (the party being sued) may have a right of appeal. The defendant wouldn't be able to appeal any counterclaim they bring. A counterclaim is when the defendant sues the plaintiff as part of their response to the plaintiff's complaint. In some states, appeals from the small claims court may go to the district court or the circuit court. The decision of this higher court may be the final judgment. In other states, the losing party might be able to appeal to higher courts.

The factors considered in the appeal vary among the states. In some states, on appeal, the judge may only look to see if there were any errors of law in the small claims court. In other states, the judge may look to see if there were any errors in the small claims judge's decision on the facts or the applicable law. Other jurisdictions may have the litigants do the trial over in the higher-level court.

Let’s Summarize…

As mentioned above, the rules used in small claims courts vary greatly among the states. To know the rules for small claims court where you live, it's a good idea to see the FAQ on your local small claims court's website. The rules applicable where you live can have a great impact on the best way to prepare your case.

Even if you live in an area where lawyers aren't allowed in small claims court, it could be a great help to consult with an attorney.  They'll still be able to provide legal advice and help you with your case preparation.