Small Claims: Sometimes Less is More
What are the benefits of filing damages in small claims ($5,000) versus county (more than $5,000 but less than $15,000) court?
It’s counterintuitive, but in some cases, reducing the damages you seek to less than $5,000 will let you recover more than seeking the full amount you are owed.
This is not tricky math, just a tricky legal system problem.
When you file a lawsuit in Florida, the court you appear before depends on how much you are seeking in damages. If you are seeking $5,000 or less, you file in small claims court. If you are seeking $5,000.01 to $15,000, you file in county court. Anything above $15,000 is in circuit court.
The purpose of this article only is to discuss the benefits of small claims court versus county court. Federal cases or those with $15,000.01 or more in damages will have to be set aside for later.
I had a consultation recently with a prospective client that wanted to file a lawsuit for $10,000. The case, according to my review, was a good one to win. However, the defendant may not have enough money to pay all of the damages even if we were to win. Nonetheless, this particular client clearly wanted an attorney to assist in the case. It was also clear that the defendant would likely defend the case without an attorney.
I had to make a bad business decision—but I believe ethical advice—and recommend that the client reduce the damages sought to $5,000 and bring the case in small claims court.
There are attorneys who will disagree with my advice, but I believe I am right and would like to offer my perspective. And though I generally charge a flat fee for small claims cases, this perspective applies regardless of whether your attorney charges either a flat fee or by the hour, or even you decide to represent yourself.
There is a significant difference in time and expense between filing a small claims case versus a county court case. In the counties in which I have litigated small claims cases, a small claims case is usually quick, efficient, and cost-effective.
In most counties, when you file a small claims case, you receive from the clerk of court a notice of your pre-trial conference immediately. Typically your pre-trial conference is within thirty to sixty days. If the defendant is served with the lawsuit but fails to appear, you win. If the defendant appears and denies the debt, you are then asked to discuss the case with the defendant that day in a mediation conference to see if the case can be settled then and there.
If you cannot reach an agreement, you typically are given a trial date. Trials are short, often one or two hours. In essence, most cases can reach resolution within three or four months even with a trial. In “attorney time” or “court time” this is lightening fast. In fact, in a standard small claims case, there are two court appearances and then you learn whether you win or lose.
Additionally, small claims cases procedure is designed to help lay people navigate the court system without attorneys. The forms are available here on the Florida Bar’s website.
This website has forms for just about any small claims lawsuit you could file. Additionally, unless each side has an attorney or the court otherwise allows, you do not have to deal with the dreaded “discovery.”
In contrast, “discovery” and pre-trial “civil procedure” is front and center in a county court case. The dates are not automatically set in most situations. The average time for reaching a resolution is increased substantially. The necessity for an attorney becomes increasingly important. And, in my experience, it is not unusual for a county court case to take more than 12 months.
For instance, in a simple breach of contract case in small claims, I can litigate the entire case in about seven total billable hours. A typical county court case, on the other hand, can take at least fifteen hours and up to, well, it can be pretty high depending on the case. I can assure you that the court costs and legal fees billed most of my county court cases wind up exceeding the amount in dispute.
Thus, back to my perspective. If you can litigate a small claims case by yourself—which is the intent of small claims procedure—and navigate the system easily, that means you can collect up to $5000 plus interest without attorneys fees. If you have an attorney, you are unlikely to pay him or her more than what you are seeking in damages.
But in a county court case, navigating the court system is much more difficult. The time it takes to litigate the case is increased. And, if you hire an attorney, you may pay more than what you are seeking in damages.
As such, in my new client’s case, it was a better business decision to seek only $5,000 rather than $10,000 and it may be for you too.
Important Disclaimer: There are as many variations in the facts of one case or another that could completely change the analysis above—for instance, “fee shifting” or “attorneys’ fees” provisions and the collectability of your defendant. You always should consult with an attorney to make an informed decision as to whether to proceed with a lawsuit, in which court it should be brought and whether you should go it alone or seek professional assistance.