The purpose of small claims court is to allow for people to resolve their disputes quickly and inexpensively, for claims that are usually less than $10,000. Knowing when to use them, on the other hand, is a little more complicated. Here’s a look at when they’re worth the bother.
When should you use a small claims court?
Small claims courts are a good option if you’re seeking a decisive ruling from a judge for disputes involving money—but not too much money. The maximum dollar amount can vary between $3,000 and $10,000 in most states, though a some can get as high as $25,000 (you can check your state’s maximum here).
Small claims judges can only award money judgments, which means they won’t order people to do things like turning down loud music or enter people into drug rehabilitation programs. Depending on the state, attorneys are actually allowed in small claims court, but they don’t get to collect fees. Generally, the procedures are less strict than regular court, and people tend to represent themselves.
So, what kind of disputes can actually be brought before the court? While the types of cases that qualify vary from state to state, here are a few common scenarios:
You loaned out some money and the debtor has failed to pay it back.
You paid for car repairs improperly done by a mechanic.
Your former landlord has failed to return your security deposit and hasn’t provided a reason for keeping it (the latter of which is required in most states).
A contract or warranty has been breached by the other party and you wish to sue for monetary damages.
On the flip side, here are some things you can’t bring to a small claims court: filing for divorce, libel (in some states), false arrest, guardianship disputes, and federal employee complaints against the government (these must be filed in certain federal courts).
Your biggest consideration is cost
Just because it’s called “small claims” court doesn’t that it’s worth the cost. The most important question to ask is whether it’s really worth your time. Let’s say you need to leave work to appear in court for a dispute that’s worth $2,000. Once you factor in your total costs, which include lost wages (the cost of your time) and fees, filing a claim can cost you anywhere from $100 to $2,000, which possibly cancels out your financial gain.
In some cases, you can also ask for court costs to be included in what the defendant owes you. If the court rules in your favor, you may be able to recoup upfront court costs. However, if the court rules against you, or comes to a middle-ground arrangement that involves both parties walking away with something, you probably won’t get that money back.
Consider other options first, like mediation
Taking a dispute to small claims court isn’t your only legal option, and in fact, may not be the best option for you. Consider these options first, as they will take much less time than going through the courts:
Mediation skips a court hearing in favor of a voluntary, mediated settlement between the plaintiff and defendant. A third-party mediator, often a lawyer, will bring both sides together and act as a referee until a mutually agreed upon resolution is reached. Mediation is especially useful when your dispute is someone that you know, or otherwise involves an ongoing relationship (like a business partner or neighbor), and there’s some willingness to compromise. Most small claims courts have policies that encourage, or even mandate mediation, and as result is usually cheaper than going through a court hearing (in fact, some mediations are free). If you’re looking for a judgement that is 100% in your favor, however, a mediated settlement may not be for you.
Arbitration is a similar process within small claims courts that involves both parties agreeing to resolve their dispute through a third party, in this case an arbiter, who again is usually a lawyer. The difference here is that the arbiter makes a final ruling that is legally binding to both parties. Since there are many more voluntary arbitrators than judges, opting for arbitration will resolve the dispute much faster (and usually cheaper) than going through the courts, although it’s typically more expensive than mediation.
File a complaint with an impartial agency/corporate superiors: If your complaint involves a private company, try to contact a corporate office. If you’re dealing with a dispute with your landlord, you can attempt to contact your local Apartment Association. If you can resolve the problem on your own without the help of the courts, all the better.
Just move on: No matter what avenue you pursue, the court system will cost you money. If a claim worth $500 is going to take weeks out of your life and stress you out, it may be better for your overall health and happiness to let it go.
This story was originally published in 2013 and updated April 26, 2021 with updated context and new information.