Throughout 2010, HALT will meet with state legislators nationwide to discuss how its model legislation to improve small claims courts can be implemented without an adverse financial impact on state governments. Small claims courts allow people to resolve small money conflicts such as the collection of small debts, property disputes and disputes between landlords and tenants. Studies by HALT, academics and others have shown, however, that these courts often fail to serve the needs of the average citizen.

To correct problems within the system, HALT is advocating reform legislation that can strengthen these courts in six key areas: raising the jurisdictional dollar limit, making the collection process more fair, providing small claims advisory services, expanding court room hours, offering mediation programs and authorizing judges to issue court orders.

“Meaningful reform is needed for small claims courts to act as a true people’s court,” says HALT Senior Counsel & Policy Director Tom Gordon. “We plan to initially push for reforms that will cost courts very little to implement, but that will greatly improve the small claims court experience for the average citizen.”

Current low dollar limits in many states mean that consumers who can’t afford lawyers are completely unable to use the courts. Accordingly, HALT believes that people should be able to use small claims for disputes involving up to $25,000—about the cost of a typical automobile. Already, two Tennessee counties, Shelby and Anderson, allow small claims of up to $25,000. The statewide limit in Tennessee and Georgia is $15,000. Alaska, Illinois, New Mexico and Texas allow small claims for cases involving up to $10,000.

Another way for small claims to be cost efficient is to streamline the collection process from judgments. After winning in small claims court, a litigant still has to collect what is owed, which can mean going through another proceeding in regular court. Allowing small claims courts to enforce their judgments would significantly streamline this process and help provide prompt compensation once a case is decided.

While the collection process needs to be streamlined, consumers need to receive due process before a judgment is granted against them. Therefore, small claims courts should implement procedures to ensure that defendants receive proper notice of small claims filed against them and prevent the courts from becoming an arm of commercial collection agencies.

Additionally, states should authorize small claims judges to issue court orders in addition to awarding monetary damages. Fully empowering small claims judges to handle cases and problems (such as noise complaints) that require someone to do something or to refrain from doing something would allow them to resolve more common types of disputes. This would also prevent people from avoiding payment due to debtor protection laws.

When court budgets increase, HALT will eventually call upon states to establish Small Claims Advisory Services to help users navigate the judicial system. The idea is modeled after the California advisory service. California requires each court to have a small claims advisor to help people prepare for trial, providing them with informational materials, referring them to other appropriate agencies and programs, and acting as their guides and teachers.

Small claims courts should also expand their courtroom hours, at least one evening and one weekend session per week, in order to accommodate people’s busy schedules. New York and Utah small claims courts currently hold evening sessions and Washington DC holds Wednesday night and Saturday morning sessions.

Finally, prior to appearing in court both parties should be referred to a mediator in an attempt to reach a settlement. Many small claims cases involve disputes between people who already know each other, and who often must coexist in the future. Mediation and other alternative dispute resolution methods are one way to avoid some of the lasting antagonisms that are produced by court fights.