One of the most common things we hear from our clients is, “I’m out money…what do I do?”, to which we almost always ask “How much money?” When hiring a lawyer to represent you in court, calculate your damages to know if it belongs in small claims court, arbitration, or the court of common pleas.
We don’t ask that question to judge, but rather to find out what type of case we are dealing with and to help determine whether we can help and whether we can cut some of your legal expenses.
How to tell if a lawsuit belong in small claims court, arbitration, or the court of common pleas?
Small Claims Court
Small Claims Court is a local court that can be found online depending on which county you are in. By searching for “Small Claims Court in [YOUR COUNTY HERE]” you are able to find all of the different magisterial districts in your county. A Small Claims Court oversees matters where the damages are $12,000 or less. Although this number may fluctuate county by county and state by state, in Pennsylvania, we practice in Philadelphia County, Bucks County, and Montgomery County where $12,000 is the damage limit for small claims court.
A simple way to think Small Claims Court is to think about Judge Judy on TV. You file a complaint, you come in with all of your evidence on the date of the hearing, the judge will hear your side, then the judge listens to the other side, and then the judge will make a ruling. Sometimes the ruling will be made on the same day. However, in most cases, you will get a decision in the mail a few weeks later.
In most cases, for a Small Claims Court judgement you do NOT need to have an attorney present to represent you. If you are unhappy with the judge’s ruling, your next course of action would be to appeal to the Court of Common pleas by filing an appeal — within 30 days of the ruling.
Arbitration
Pennsylvania lawsuits seeking damages ranging from $12,000 to $50,000 will automatically be directed to Arbitration. That being said, like rules vary state by state, and in some cases county by county. In some counties the damage threshold may be lower. If you are suing in Philadelphia, Bucks County, or Montgomery County, cases between $12,000 and $50,000 will almost always be directed to arbitration. Whatever the range in your county may be, if damages you are seeking falls in that range, the case is typically subject to mandatory arbitration.
42 Pa.C.S. § 7361 is the Pennsylvania rule that relates to “compulsory arbitration” or mandatory arbitration. It states that no matter shall be referred to compulsory arbitration if it exceeds $50,000 or involves a dispute about title to real property (or real estate).
According to Lexis Nexis, there are 6 main differences between arbitration and litigation in regards to their appealability, cost, flexibility, publicity, predictability, and timeline.
The main difference between having your dispute heard by arbitration and the court of common pleas is that, in arbitration, the entire litigation timeline and process is streamlined. That means you get discovery sooner and a hearing date much sooner. Overall, everything will be expedited. By doing things a bit quicker, costs are typically kept low and the parties will get a much quicker decision on the legal issue or dispute.
When your are involved in a business dispute, there is usually already a lot of pressure to come to a resolution. If your case can fall within the monetary limit for arbitration, it can be an opportunity to get things heard quickly.
Statutory arbitration is different from voluntary arbitration. We discuss other differences between arbitration and litigation in our video about the differences between mediation, arbitration and litigation.
If you disagree with an arbitration verdict you can also appeal that decision to the Court of Common Pleas for a “trial de novo”. When a court of common pleas hears a case “de novo,” it is hearing the issues anew and deciding them without giving effect to any legal conclusion or assumption made by the arbitration court.
Court of Common Pleas
The next level of court is the Court of Common Pleas. In Pennsylvania, we have the Philadelphia Court of Common Pleas, Bucks County, Montgomery County, etc. (one for each county).
These courts will hear either an appeal from small claims or arbitration. Also, the court of common pleas will be the first court to hear a case if the damages involve more than $50,000.
In the Court of Common Pleas, the client will be subjected to the entire legal process which can get expensive and easily cost in excess of tens of thousands of dollars. In an effort to avoid any additional fees, we ask about the value of the case from the initial conversation. If we are able to make the distinction early and properly identify which court your complaint should be filed in, it will save both your and your attorney’s time and money.
A Court of Common Pleas will hear almost all litigation disputes, including shareholder disputes, small business litigation, personal injury, real estate, employment disputes, and many more. For more information about the types of legal disputes Kaminsky Law handles, please see our practice areas page.
For an in-depth review of the Pennsylvania Court of Common Pleas and more resources for the PA court system, we welcome you to visit Pennsylvania’s Court of Common Pleas website.
If you need further assistance:
Kaminsky Law is happy to help! What we would recommend that you do before you call a lawyer is think about what your damages are. Once you determine the approximate amount, it will be much easier for us to help guide you in the right direction for your case.
We can help either guide you with your next steps in your small claims issue, represent you in arbitration, or represent you in a dispute where the damages exceed $50,000 in the applicable Pennsylvania county Court of Common Pleas.
Whichever the case may be, call us at 215-876-0800 to set up a free consultation or fill out a form here!
