ISSUE 9 FEBRUARY 2016

ESTABLISHING SMALL CLAIMS COURTS AND THE IMPACT

ON SERVICE DELIVERY IN THE JUSTICE SYSTEM
By Heike Gramckow and Omniah Ebeid 1

Introduction
Using alternative dispute-resolution (ADR)
mechanisms, such as mediation and conciliation
justice, is one of the ways that courts have
attempted to reduce their caseload while still
resolving disputes fairly and providing access to
court services. Another alternative that courts have
opted to provide is the small claims court. These
courts have been in existence in some form in
several countries since as early as the 1930s and
have historically stemmed from the recognition that
simple disputes over a small amount of money
may not require the same procedures and rules
but can instead be resolved differently.2 With the
understanding that the complexity of court processes
can be prohibitive and can also discourage parties
(especially those who are unrepresented by
counsel or who have limited financial means) from
resorting to formal justice institutions, small claims
courts provide an effective and efficient mechanism
for ensuring access to court services for all while World Bank
also freeing up the system’s resources to handle
more complex commercial disputes. The success of What is a small claims court?
small claims courts has been demonstrated across
A small claims court is a specialized court that is
many countries; indeed, it was recently recognized
created by law with specific duties and powers
as a good practice for courts worldwide as part of to adjudicate and resolve small-value monetary
the new methodology used by the World Bank’s disputes.3 The jurisdiction of these courts may be
Doing Business report for assessing the contract limited to certain types of cases, and the benefits
enforcement indicator.
3 Singapore’s small claims courts were established
1 Heike Gramckow is a Lead Counsel and Omniah by the Small Claims Tribunals Act, and the Washington,
Ebeid is a Senior Justice Reform Specialist with the DC small claims court is governed by the D.C. Code §§
Global Governance Practice of the World Bank. 11-1321 and 16-3901 et seq. (1981), also known as the
2 The small claims court in Washington, DC was Superior Court Rules of Procedure for the Small Claims
established in the 1930s. and Conciliation Branch.

worldbank.org/j4p
ISSUE 9 FEBRUARY 2016

generally include reduced court costs for the With regard to subject matter jurisdiction, small
parties, simplified and faster procedures, and claims courts are generally limited to resolving
specific support services, including mediation in simpler disputes involving some type of debt
many cases. The issue of whether the parties recovery, as opposed to complicated commercial
are required to represent themselves or have the disputes. In some jurisdictions, simple traffic fine
option of hiring a lawyer is also determined by law cases may be handled in a small claims traffic
and varies by jurisdiction.4 fine court. In addition, small claims courts do not
generally have jurisdiction over divorce and custody
Small claims courts are considered an ADR cases, bankruptcy lawsuits, or libel or slander cases.
mechanism that provides litigants with a forum These subject matter limitations are specified by the
and opportunity to resolve their disputes in court law establishing the court.
in a simpler, quicker, and cheaper manner. The
courts are premised on the use of straightforward What are some of the main features?
procedures that are easier for litigants to follow,
Small claims courts are unique and effective
e.g., they apply uncomplicated rules for presenting
because of their many features including the
evidence and notifying parties. In addition, they are
following:
less formal and often eliminate the need for parties to
be represented by lawyers. They have streamlined • Limited Jurisdiction. Small claims courts do
processes that allow for a quicker resolution of not have jurisdiction over all minor disputes
disputes (e.g., limitations are set on the time it takes but will generally be limited to simpler disputes
to serve a defendant, answer a petition, schedule usually involving some type of debt recovery.
a hearing), and they have reduced associated
court costs.5 Many well-performing small claims • Simplified Procedures. Small claims courts
courts also provide litigants with a mechanism for will generally have different sets of rules that
requesting a waiver of even the limited court fees, outline all legal requirements and procedures
as well the choice to mediate their dispute at a that the court and parties must use. These
reduced or even no cost. rules are different from those used in other
courts, namely codes of civil procedures, in
What types of cases are handled in that lay individuals with no legal education or
a small claims court? background can more easily understand and
Generally, the jurisdiction of the small claims court follow them. Although the rules are simple and
involves minor cases where the amount in dispute do not involve many requirements, they still
is low, an amount that varies from one judiciary to ensure due process and provide the necessary
another, depending on the threshold as determined procedural safeguards to the litigants.
by each country. For example, the threshold in the
District of Columbia Small Claims Court in the United • Speedy Resolution. In addition to having
States is US$5,000; if the disputed amount exceeds simplified procedures, small claims courts
that amount, the plaintiff is prohibited from using that generally have specific and short time limitations
court. The small claims court in Ontario, Canada has for each case process that is undertaken by the
a threshold of $25,000 Canadian dollars, while the court and required by the parties. Some courts,
one in Singapore has a cap of $10,000 Singapore such as the Singapore small claims court, have
dollars. The latter, however, provides that the small developed even shorter time limitations for
claims court may still adjudicate cases in which the certain actions. Thus, for example, if a claim is
amount in dispute is up to S$20,000, if both parties filed by or involves a tourist, the court will set
consent in writing. the case for mediation within 24 hours of filing,
providing for even quicker resolution.

• Informality. Court proceedings in small claims

4 The U.S. states of Michigan and California, for courts are more informal than those in other first
example, prohibit lawyers from representing parties in instance courts. This feature alleviates the level
small claims courts. of apprehension on the part of self-represented
5 Washington, DC’s small claims court fee structure parties and allows them to be more comfortable
is as follows: filing a new claim costs US$5.00 for claims with representing themselves without fear of
of $500 or less, US$10.00 for claims over US$500 undermining their case.
and up to US$2,500, and US$45.00 for claims over
US$2,500 and up to US$5,000. The plaintiff must also • Reduced Court Costs. The cost of filing
pay the cost for service on the defendant(s). See also and processing a case in small claims court
h t t p : / / w w w. d c c o u r t s . g o v / i n t e r n e t / d o c u m e n t s /
is significantly lower than in other courts. As
SmallClaimsHandbook.pdf.

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stated, many courts will also provide litigants lawyer, successful courts ensure that users
with the option of requesting and obtaining have access to detailed information about
a waiver of the fees provided that they meet navigating the court system (e.g., how to file a
certain criteria required by the courts. case, what documents are required, what filing
and other court fees are involved, how to serve
• Access to ADR Services (Mediation, a party and request a hearing, how the case
Conciliation and Arbitration). The majority will be handled in court, etc.). Providing simple
of small claims courts provide litigants with the checklists and forms, as well as electronic
right and opportunity to mediate their disputes, services such as e-filing and e-payments, also
at times even before filing the lawsuit. Flexibility enhances access by making it even easier to
in the way in which disputes are resolved is interact with the court. In jurisdictions where
an important feature of a successful and well- the population may be linguistically diverse,
performing court. For example, the rules of the the court should provide this information in
Washington, DC small claims court provide the multiple languages (e.g., the Washington, DC
parties with the option of voluntarily appearing court provides informational brochures in ten
together and submitting their dispute to the languages).
judge for conciliation without having to issue
any notification. The rules also allow one of What are the benefits of a small
the parties to request a conciliation, in which claims court?
case however, notice must be provided to the • Providing an effective and efficient alternative
opposing party before the conciliation session mechanism for resolving small, less complex
can be held. Regardless of how conciliation is disputes
requested, the dispute is heard in an informal
setting, and the judge will endeavor to reach • Eliminating or significantly reducing the financial
an amicable settlement between the parties, burden of litigating a case for the parties
who nevertheless have the right to have
their lawyers present Once an agreement • Freeing up court resources (financial and
is reached, the clerk of the court will record human) so that they may be dedicated to
it in the court record, making it enforceable. resolving larger and more complex disputes
If however an agreement is not reached, the
DC court goes even further by providing the • Increasing access to court services and
parties with the additional option to arbitrate ensuring that the needs of all court users,
the dispute. The rules provide that all parties especially those with little financial means or
must agree to participate in arbitration; cannot legal knowledge, can avail themselves of the
withdraw from the arbitration once it has begun; services provided by justice institutions
and cannot appeal the arbitral award once it is
issued. In other countries such as Singapore, • Providing access to ADR services at low or no
once a party files a claim in small claims court, cost
he or she will be required to attend a mediation
• Reducing the judiciary’s backlog
session within a short period of time after filing.

• Right to Appeal. As in other courts of first

How to determine if there is a need
instance, judgments issued by small claims for small claims courts?
courts can generally be appealed to higher Even though establishing and operating small
courts in many jurisdictions. This issue is one claims courts can save judicial resources, creating
that is determined by each country or other sub- and running them requires financial and human
national government and should be outlined in resources to be made available. Therefore, the
the law establishing the court. decision to establish these courts should be based
on a careful study of the type of cases that could
• Access to Information. An important be assigned to a small claims court to benefit
feature of a successful small claims court court users and to increase their access to court
is the availability of detailed information in services, as well as free up the court resources
paper and electronic formats to court users. required to handle more complex commercial
Recognizing that the target user group may not disputes. Also needed are a series of detailed
have an understanding of the legal framework reviews of: (i) the legal structure governing
governing the processing of cases and/or the processing of commercial cases to identify
may not have the option or means to retain a whether the establishment of a small claims court

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is permissible under the current framework; (ii) made available to users online and in paper format.
commercial caseload data for at least three to To provide greater access to court users, these
five years (including, e.g., filing trends, causes of materials should also be provided in more than one
delays); (iii) existing ADR mechanisms and their language depending on the makeup and diversity
effectiveness in resolving smaller cases and cases of the population. The court should also explore
where the parties are not represented by counsel; providing electronic services such as simple e-filings,
and (iv) user needs. A determination of the required electronic notification and e-payments to reduce the
human and financial resources will also have to financial burden as well as the time and effort spent
be made to identify the initial cost of establishing by court users in filing and processing their cases.
a small claims court as well as the projected future
resources needed to maintain operations. In addition, resources should also be dedicated to
developing and implementing a public awareness
What others issue should be campaign to apprise the public and the targeted court
addressed when establishing small users of the services that will be provided by this new
claims courts? court as well as the associated benefits of using it.
Once operational, a mechanism for obtaining regular
Provided the decision to establish a small claims feedback from court users should be established, the
court has been made, the focus of the judiciary results of which should be reviewed and analyzed
should shift to drafting a comprehensive law and/or regularly, and they should guide any needed or
an administrative decree or order (provided that is desired changes in the way in which the court is
legally permissible) outlining, among other things, operating and providing services.
the jurisdiction of the court, its procedures and fee
structure, and the provision of ADR services along Conclusion
with time standards etc. To ensure that the law
and administrative procedures address the needs Resorting to litigation as the conventional way of
of both the justice sector and court users, the resolving disputes is more often than not a time
judiciary should engage in a discussion of the draft consuming, complicated and costly process to
with its stakeholders including members of the bar, all litigants, particularly those involved in minor
especially lawyers who handle commercial cases disputes and those with little financial means to
as well as legal aid providers, if any, and the public. have legal representation. Establishing small claims
Such an inclusive and participatory approach would courts not only reduces the burden of litigation on
provide the judiciary with reliable feedback, not only these parties by providing greater access to judicial
on the basics of a new small claims court, but also on services, but it also frees up the court’s resources
what, if any, additional services should be provided. so that they may instead be more efficiently and
In addition, this approach has the benefit of allowing effectively allocated to resolving larger and more
the judiciary to address other issues that may have complex cases. Despite the fact that small claims
been overlooked as well as generating buy-in for the court vary from one jurisdiction to another, as
new court and its benefits. they should be based on the varying needs of
the public, the reason for their establishment and
As the law and/or administrative provisions are their benefits remain the same. Like other courts,
finalized, the judiciary should begin developing the key to their success rests on having a clear
and disseminating public informational materials, and detailed legal framework that leaves no room
including brochures and publications on the scope for varying interpretation and room for delays.
and jurisdiction of the new small claims court, how Providing opportunities to even mediate the dispute
to access and use it, checklists that court users throughout the various stages of the case process,
may use when filing their cases, and forms that they removing unnecessary formalities generally
will need to submit to file and process their cases. associated with the justice system, and providing a
Depending on the jurisdiction and the IT capacity of greater level of assistance to users are instrumental
the court, these materials should be provided and to the success of a small claims court.

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