When a painter ruins a homeowner's $1,500 antique rug, the place to go is usually small claims court. There the parties can resolve the dispute by themselves without resorting to costly litigation.

But what if the rug were worth $15,000? Or even $20,000? Many small claims courts could not take the case because the amount in dispute exceeds their jurisdictional limit. And many lawyers wouldn't take the case because it just isn't worth their time.

But a Washington, D.C.-based legal reform group is charging into this jurisdictional no-man's-land with plans to draft model legislation raising the limit of each state's small claims court system to $20,000. The proposal is part of a package of reforms planned for next year by HALT -- An Organization of Americans for Legal Reform.

All but six states have some form of small claims court, but the claim limits vary widely, from a low of $1,000 in Virginia to a high of $15,000 in Delaware and Tennessee, according to 1996 research by the National Center for State Courts in Williamsburg, Va.

Also, HALT wants to allow small claims courts to provide injunctive relief as well as damages and to eliminate the use of lawyers.

The Best of the Courts

"What we are trying to do is to identify the practices that work best in small claims courts nationwide and pull them together as a clearinghouse and a stimulus in trying to adopt the [best] processes," says James Turner, HALT's executive director.

Turner admits there is no statistical rationale to the $20,000 figure, but he says he believes the figure marks a point below which most lawyers will refuse a case.

"For most, if not all, lawyers in private practice, a dispute where there is less than $20,000 in issue is below their radar," Turner says. "It does not make great economic sense for a lawyer to get involved in a private matter with that small of an amount."

But others question whether the increase in limits will undermine the reason that most states' small claims courts were created: as a forum to provide speedy resolution of simple legal issues without the need for the rules of civil procedure, evidence, discovery and jury trials.

The proposal also could result in a loss of business for general practitioners who do handle claims falling into HALT's target zone.

Larry Ramirez, chair of the ABA's General Practice, Solo andSmall Firm Section, says his concern is not so much for the lawyers as it is for the litigants.

"I would be concerned about their ability to protect their own interests;" says Ramirez of Las Cruces, N.M.

"I don't know if people understand that if you have a $10,000 claim, it may be worth spending a few thousand dollars on a lawyer so that you do not end up with nothing."

Judge Frederic B. Rodgers of Golden, Colo., chair of the AsA Judicial Division, cautions about the risks of increasing the monetary limit. He warns that larger claims now handled in regular courts are more complex than smaller ones, and that there is a benefit provided by the procedural safeguards that are usually not a part of small claims court.

"Every time you get a more complicated dispute, you provide a greater opportunity for surprises at trial," Rodgers says.

"It is not justice," he adds, "when you suddenly wish you had talked to a lawyer or had done research or availed yourself of a traditional law court where you have rules of procedure, evidence and discovery."

For that reason, Turner points out, HALT's model legislation will include a provision to increase the use of alternative dispute resolution among litigants in small claims courts.

"There is a continuum between hiring [Robert] Bennett and going it alone," Turner says. "There are many stops along the way, including self help books, independent paralegals and legal aid. It is a faulty dichotomy to say you are either with a lawyer or you are on your own."

Proponents of small claims courts are hoping that spectrumcan be widened enough for more cases to ease through.