Bill Would Affect Small Claims Court

There is an effort under way in Sacramento to make the people’s court a richer place to visit.

A state assemblyman has introduced a bill to increase the amount you can win in small claims court. The current limit is $1,500, while the amended bill increases the cap to $2,500.

And thanks to Judge Joseph A. Wapner, the retired judge whose current bench is in the studio of the television show “The People’s Court,” the bill has a better chance of passing now than it did last year, when it never even made it out of committee. (Though Wapner’s show is for television, it uses real people in real situations. They sign an agreement waiving their rights to go to small claims court.)

Author of the Bill

Judge Wapner’s testimony in support of the legislation before the Assembly Judiciary Committee “made the difference” this year, explains Charles W. Bader (R-Pomona), the author of the bill, A.B. 301. The Judiciary Committee recently approved the bill, after amending the limit from $3,500, as originally proposed, to $2,500. It should be considered by the full Assembly within a week, Bader says.

Critics say the limit should not be raised because small-business men and other individuals should not be allowed to lose such a significant amount of money without the protections of a formal court proceeding and legal counseling.

(Lawyers are not permitted in small claims court to represent any of the parties. The hearing is conducted in a relatively informal manner and often by “pro tem” judges, who are lawyers volunteering their time.)

But, as Assemblyman Bader points out, that criticism ignores the fact that a losing defendant has “two swings at the ball” and can appeal the decision and have a completely new trial, a trial de novo, by the Superior Court “with all the attorneys and a formal court hearing that they would otherwise have.”

There is organized opposition to the bill, especially from the insurance and collection industries.

“Collection agencies view it as direct competition,” Bader says. “The more that people can handle (collections) for themselves in small claims court, the less business the collection agencies will get.”

Bader expects the bill will pass in the Assembly, but says it may face a rough time in the state Senate, where he expects heavy lobbying against it.

Currently, you can still bring a case to small claims court that involves more money than $1,500, but you just can’t collect more than that. In other words, by going to small claims court, you waive any recovery above the jurisdictional limit.

Save Attorney’s Fees

Many people still prefer small claims court with the current cap, even when they are owed $2,000 to $5,000. Although they can now only collect $1,500, they might spend thousands of dollars on legal fees if they filed their case in municipal court, and they can handle the small claims case themselves. In essence, Bader says: “They write off a substantial portion of their claim,” rather than spending money on an attorney.

Incidentally, if you file suit in small claims court, you have the right to have your case heard by a municipal court judge, rather than a volunteer lawyer acting as a temporary judge. Simply tell the court clerk that you will not accept a temporary judge.

The State Bar Assn. publishes a helpful brochure entitled “How Do I Use the Small Claims Court?” For a free copy, send a stamped, self-addressed, business-size envelope to State Bar Pamphlets (SC), 555 Franklin St., San Francisco, Calif. 94102.