From the Multnomah Lawyer: Tips from the Bench - What to Do with Your Client’s “Small” Case: Is the Small Claims Department the Answer?

Your time is valuable. Ergo, litigation is expensive. What can you say to a client who has a solid but small case? One answer is to decline to conduct a full-length interview because you know that you will conclude by saying that the recovery is not large enough to justify the time that will be required for you to see the case through to completion. And that may be true, particularly if the client will be required to pay your fees. But that result may leave the client with the impression that our courts are only open in any real sense to parties who have the funds to seek justice. Or, as an alternative corollary, your client will conclude that people and businesses that treat other people in a manner that the law says is wrong can do so with impunity, so long as the monetary value of the wrongdoing is not too substantial.

First, consider whether the other party may be held responsible for your attorney fees and court costs. If the case involves a contract, many contracts contain a fee shifting provision. If the contract’s language only provides for the other side to be awarded fees, ORS 21.096 makes the fee shifting clause reciprocal. Even if the contract contains no mention of attorney fees, ORS 21.082 makes attorney fees generally available if the principal and interest due at the time of the filing of the complaint is $10,000 or less. Small torts (claims for $10,000 or less) also have an entitlement to attorney fees under ORS 21.080. Under the small contract and small tort statutes, there is a requirement of a pre-filing demand that may bring your client the compensation they seek more promptly than he or she would have imagined. Of course, there are myriad federal and state statutes in the areas of consumer and landlord and tenant cases, and many other cases, that provide for the prevailing party to be awarded attorney fees. It’s worth investigating whether your client’s claim fits under such a statute. It is also worth considering whether the coercive hammer of a claim for attorney fees will encourage an early settlement and avoid prolonged litigation.

Now, let’s assume that either no basis for being awarded attorney fees from the other side is apparent or, while there is a basis for being awarded fees, you have a reasonable concern as to whether this seemingly meritorious case will be successful. Are you willing to spend your time on a case where getting paid depends on getting a judgment in your favor? What other options can you offer? Consider having your client file his or her case in the Small Claims Department. For claims that do not exceed $10,000, the Small Claims Department is an option. (Some plaintiffs reduce claims that exceed $10,000 to the jurisdictional amount to avail themselves of this forum.)

There are certain practical advantages to going the small claims route. The filing fees are lower than circuit court - $55.00 or $99.00 depending on the size of the claim. Pleadings are simplified – the court provides forms.

The time to get to a judgment in the Small Claims Department is also much faster than in circuit court. The defendant has only 14 days after service of the claim to file a responsive pleading. If the defendant denies the claim or files a counterclaim, the parties will be notified of a mediation to be held at the courthouse within four to eight weeks following the filing of the responsive pleading. Trained volunteer mediators assist the parties in assessing the strengths and weaknesses of their cases, understanding the other parties’ view of the evidence and the law, determining what compensation or result they really want, and all of the other products that flow from a mediation session. In 2019, the mediation coordinator reports that 55.93 percent of Multnomah County cases were settled at the mediation. Further, of the 277 cases scheduled for trial, 50 of those cases settled before trial. For cases that are not resolved at mediation, trials take place within four to eight weeks. Moreover, for those parties going to trial, thanks to the mediation session, they are now equipped with a more realistic view of their case, as well as the opposing sides’ view.

Small claims trials are informal. The rules of evidence are relaxed. The judge may make inquiries as necessary to achieve a “right, just and equitable determination...of the controversy.” ORS 46.415(3). Attorneys may appear in the Small
Claims Department only by leave of court (ORS 46.415(4)) and leave is rarely granted in an effort to keep the proceedings informal and to avoid giving one side an undue advantage over the other. Judgments are generally issued from the bench and they are not appealable. Judgments for $3,000 or more create a judgment lien when entered. For judgments of $10 or more but less than $3,000, a fee must be paid to create a judgment lien.

It may be appropriate to offer legal services to your client if the client decides to pursue their case in the Small Claims department. Attorneys are not allowed to appear in the case but there is nothing to suggest that some unbundled legal services cannot be provided that will greatly increase the likelihood that the client will prevail and will achieve a judgment that is commensurate with the harm that is the basis of the action. Lawyers and judges have a way of viewing, analyzing, and processing information that is decidedly different than the mental processes of ordinary humans who have not been subjected to three years of law school. Providing assistance in identifying the elements of the claim; what testimony or documents will provide evidence of the necessary elements; the proper chronology of the case’s story, stripped of irrelevant and confusing information; and foreseeable arguments, defenses, and counterclaims will be invaluable to most clients if they elect to pursue their small claims remedy. Your client will not generally recover for such legal fees so it is important to consider how much help your client needs and the degree to which your legal guidance will reasonably improve the outcome.

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