Perhaps because dollar limits have risen in recent years, businesses increasingly are turning to small claims court to help them resolve problems such as customers who aren’t paying their bills or suppliers or contractors who fail to deliver as promised. In Wisconsin, small claims court will handle claims of up to $10,000 for financial judgments, $25,000 for repossessions and $5,000 for personal injury. The limit for Minnesota, where small claims go through “Conciliation Court,” is also $10,000 for general claims.
Small claims court can be a good solution for businesses because it’s a simpler, quicker and less-expensive way to resolve business disputes. Filing fees generally are less than $100 in Wisconsin. That compares with filing fees of more than $250 for a civil action. Cases in small claims court also are heard more quickly. They generally come before the court within a month or so compared with several months or years for traditional courts.
While many businesses will consult an attorney to determine whether they have a valid claim, learn nuances about the law or help in resolving the matter short of filing a complaint, they are not required to have attorneys argue their cases. Businesses that choose to consult attorneys and have those attorneys appear in court with them are entitled to recover some of the fees if they win.
As in traditional court, each side will have a chance to present its evidence. The key is to be certain you’re prepared. This is another point where businesses often look to attorneys for advice about the rules and effective ways to present the case. Generally, you’ll need the following in order to prove your case:
- A timeline of the circumstances leading to the dispute and attempts at settling.
- Documents, receipts and any communication, including electronic exchanges, between you and the opposing party.
- Witnesses who can affirm your position in the case. Keep in mind that written statements or affidavits will not suffice. While friends and family may be happy to appear on your behalf, professionals and others who may not have a vested interest to appear in person may need to be subpoenaed and paid a witness fee of about $16 plus mileage. If you win, those fees may be added to any judgment.
Once you get to small claims court, the session begins with the plaintiff representing his case. This is the point where you introduce all the above-mentioned evidence. The defendant then gets to respond with his defense. Both sides may cross-examine the other, and the judge or commissioner may also ask questions.
Judges and commissioners usually render their decisions on the spot or at least within a few days. If a commissioner decides your case, you may request an appeal before a judge. If you are dissatisfied with a judge’s decision and wish to pursue it further, you will need to file an appeal in the Wisconsin Court of Appeals, outside of the small claims system and into the complex, lengthy and sometimes expensive traditional court system.
While small claims court can be an effective way to resolve financial disputes, it doesn’t always ensure the judgments will be paid. If the debtor doesn’t pay immediately, you can garnish wages (or better yet, file a stipulation for income withholding) or “docket” the judgment, making it a lien against any real estate the debtor owns. The court clerk can guide you to the proper forms.