Dear Alex:
I own a computer consulting company, and three months ago I finished a $5,000 project for a client. I have sent several invoices and requested payment over the phone multiple times, but the client won’t pay me.How can I compel this client to pay for my services?
In a case like this, I usually recommend against hiring a lawyer. Although a stern letter from an attorney can compel action in many instances, hiring a lawyer for much more than a letter is usually cost-prohibitive for this size of a dispute.
It may seem counterintuitive for a lawyer to say such a thing, but the reality is that the amount of money in controversy does not justify the cost that attorneys’ fees would amount to in pursuit your $5,000.
The cost of the lawyer could quickly exceed the amount you are owed. This dispute sounds like the type of matter that small claims court was designed to resolve. Although you have the option of filing a limited civil case in superior court, the small claims process is faster, less expensive, and the rules are simplified to allow people and small businesses to act as their own advocates.
One thing to remember is that in small claims court, you cannot be represented by a lawyer. This helps to keep an even playing field, but can be a frightening prospect if you are unfamiliar with courts or are afraid of speaking in public.
Also, small claims court really is limited to smaller claims. Businesses can only file for damages of $5,000 or less, and individuals can file for damages of $10,000 or less. Correspondingly, the filing fees are also low. A limited civil case in the regular court system costs at least $240 to file, while small claim actions can cost as low as $30 to file, depending on the size of the claim.
In small claim court, your dispute will be heard by the judge between 20 and 70 days after filing, which is much faster than in the standard court system, which can take many months or upwards of a year before the matter is finally heard.
You will want to be well prepared and have pre-planned what you want to say and the evidence you wish to bring with you. Evidence is very important in small claims, so consider bringing copies of contracts, receipts, photographs, invoices and witnesses who can testify about facts relevant to your case.
Common cases brought to small claims court include property or personal injury claims after car accidents, rental property security deposit disputes, and contractual disputes.
The system is designed to be accessible to people who aren’t experts at the law or familiar with the courts system. If your dispute is for less than the small claims limit, it may be the best way to recover the money you are owed.
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