If you are unable to settle a legal matter without some sort of assistance, there are several types of alternative dispute resolution available.
Arbitration. The most traditional and well-known form of alternative dispute resolution, arbitration is usually agreed to well in advance of a dispute between the parties. The parties submit their dispute to a neutral party who renders a legally enforceable decision.
Facilitation. A process in which a neutral third party uses his or her skills to promote communication between parties to a dispute. The focus of facilitation is communication.
Fact-finding. This process involves an impartial third party used to analyze the issue(s) and to present findings of fact and make recommendations for a resolution. Fact-finding can be used by the parties to continue their own negotiations for settlement.
Mediation. Mediation is very popular form of alternative dispute resolution. It is an informal process geared to the settlement of disputes between parties by the action of an intermediary, or neutral party. Participation in mediation is typically voluntary. The mediator does not render a decision at the end of mediation; instead, mediation leaves the control of the outcome (i.e., the actual settlement of the dispute) to the parties. A mediator does not render a formal decision as to which party is correct or to blame, although he may provide his opinion as to the strengths and weaknesses of a case.
Neutral/case evaluation. A non-binding process where an experienced neutral case evaluator is brought in to evaluate the facts and offer an evaluation of likely outcome of the case.
For detailed discussions about mediation and arbitration, see Pros and Cons of Mediation and Pros and Cons of Arbitration at AllBusiness.com. Small Claims Court Basics Small claims courts exist for the purpose of resolving simple disputes quickly and economically, and they are considered courts of limited jurisdiction. Parties are typically not represented by attorneys in small claims court actions. The procedures in small claims court are much more informal than in other types of litigation. The judgment is usually rendered immediately after the hearing. Appeal rights for both plaintiffs and defendants are limited.
There is an abundance of assistance available for filing your claim in small claims court. It is generally assumed that an individual or small business owner will be filing a small claims action without the benefit of an attorney, and as such, most states provide information and assistance to parties involved in those actions. For a comprehensive list of links to each state’s self-help resources and information centers, go to the National Center for State Courts Web site. For a guide to Small Claims Court where information is provided about each state’s rules and requirements, go to ConsumerAffairs.com.
Dollar limits. Small claims courts serve to resolve disputes over comparatively small dollar amounts with dollar limits ranging from $1,500 (Kentucky) and $2,000 (Massachusetts) to $10,000 (Alaska and New Mexico) and $15,000 (Delaware, Georgia, and Tennessee). A chart listing the small claims court limits for each state may be found at Nolo.com.
Statutes of limitations. Statutes of limitations are laws that set the deadline or maximum period of time within which a lawsuit or claim may be filed. The deadlines vary depending on the circumstances of the case, and the type of case or claim. The periods of time also vary from state-to-state. If a lawsuit or claim is not filed before the statutory deadline, the right to sue or file a lawsuit or claim is barred. Under certain circumstances, a statute of limitations will be extended beyond its deadline. Statutes of limitations apply to actions filed in small claims court as well as other courts.
For a detailed discussion, see Statute of Limitations Basics at AllBusiness.com.
Types of disputes. The types of disputes and claims typically brought in small claims court include:
- Failure to repay a loan;
- Failure to provide personal service;
- Failure to pay for personal services;
- Failure to fix a car or other major appliance properly;
- Landlord/Tenant disputes (i.e., failure to return security deposit, destruction of rental property);
- Debt collection;
- Return of personal property;
- Claims for equitable relief; and
- Breach of warranty (claim that an item purchased does not work the way it is supposed to work).
Some types of claims may not be filed in small claims court:
- Divorce proceedings;
- Bankruptcy proceedings;
- Guardianship proceedings;
- Suits against the federal government, a federal agency, or a federal employee; and
- Criminal proceedings.
Attempt to settle prior to filing. Before you sue in small claims court, you should make one more demand on the other party for payment, return of property, or whatever else you plan to ask the judge to make that party. It is a good idea to make this demand in writing because you may be required to demonstrate to the judge that you made an attempt to settle the dispute before filing your claim in small claims court.
Where to file. A small claims court action must generally be filed in the county in which the party being sued resides or does business. It may also be filed where a contract was signed or where a personal injury occurred.
If a defendant has no contact or business in your state, you will likely have to sue in a state where the defendant resides or does business. If it becomes necessary to file your small claims court action in another state, the process may become unwieldy, complicated, and expensive. If this occurs, it may not make sense to pursue your matter in this manner.
Notify the defendant. After you have filed your claim in small claims court, you must arrange to give each defendant a copy of your claim before your case is scheduled to be heard. It is your responsibility to make sure that each defendant is notified. The cost of the notification is borne by the person filing the claim.
There are three basic ways to effect notification of the defendant:
- Certified mail by the court clerk;
- Personal service by process server; and
- Substitute service by process server at the defendant’s home or place of business.
Preparing for the case. You should prepare your case as thoroughly as you can. You are the one who best knows the facts that occurred. Gather documents. Seek out witnesses and ask them to appear in court on your behalf. Think of what the defendant will say and what evidence he or she will bring to court. Make notes of what you will ask the defendant. Practice what you will say to the judge. Write notes of what you will say.
It is also a good idea to go to the court where your claim will be heard and watch a couple of small claims court cases so you will know what will be required of you. In doing this, you will also get an idea of the temperament of the judge who will hear your case.
Your day in court. Make certain that you have all of your documents and that your witnesses are available for court. Arrive early to give yourself enough time to get organized and relax. The courtroom procedures for small claims court actions are informal, and the judge will give you guidance for how to proceed. When your case is heard, the judge will do everything to guide you through the process.
Be brief and succinct when explaining your case. Answer all of the questions the judge may pose. Be prepared to explain the amount of money you are claiming. Don’t get into an arguing mode.
If you win, you should ask the judge to award you your court costs and any other costs reasonably incurred in bringing the action.
Appealing a small claims court decision. Appealing a small claims court decision is limited for both plaintiffs and defendants. In many states, only the party who was sued can appeal. In some states, a decision may only be appealed if there was a mistake of law, not a mistake on the facts of the case. Also, there is typically a very short time within which to appeal a small claims court decision, generally ranging from 10 to 30 days after the decision was rendered.
A party may be represented by an attorney on appeal of a small claims court decision. The reason an attorney is allowed on appeal is that appeals from small claims court decisions are heard in formal court. And although attorneys are allowed for small claims court appeals, the court proceedings remain informal, as with the small claims court trial itself. It will be up to you whether you decide to hire an attorney for an appeal. For a more detailed discussion, see Appealing a Small Claims Court Decision at AllBusiness.com.