What to Do When a Claim is too Small to Hire a Lawyer
Many people and companies have disputes or potential lawsuits involving damages in the thousands, or tens of thousands of dollars. While these claims are important, they are often too small for the party to hire a lawyer to file an action.
I have often explained to potential clients why a claim for several thousands of dollars, while a significant sum, was not large enough to justify hiring a lawyer to litigate, since the costs and attorney’s fees they would pay would be far greater than any judgment they might win.
Fortunately, there is an alternative other than walking away from the claim. The California Legislature has provided for Small Claims Courts to resolve such disputes quickly and inexpensively.
In Small Claims Court a person or company can quickly bring a claim to trial without lawyers, who may not represent either party; and without expensive pre-trial motions and discovery. However, the damages which can be claimed in the Small Claims Courts are limited.
In most cases, an individual can seek damages up to $10,000, while a corporation or business is limited to damage claims of $5,000. If a party’s claim is worth more than the allowable damages, the party can still bring a small claims action, but the party’s damage award may not exceed the maximum damage award allowed under the statute. Filing fees for a small claims case range from $30.00 (claims up to $1,500) to $75 (claims of $5,000 to $10,000).
The rules of evidence and other legal formalities do not apply in Small Claims Court, since there are no lawyers involved. The parties tell their stories — presenting their witnesses, documents and other evidence to a judge, as there are no jury trials.
The Los Angeles Superior Court has an excellent website explaining the small claims process, fees, service of pleadings, etc.
Small Claims Court is a very useful tool when a claim is important, but not large enough to hire a lawyer.
Paul C. Bauducco is the Chair of our Business Litigation Practice Group. Contact him via email: firstname.lastname@example.org.