Small Claims Court Basics for a First Time Lawsuit

I get lots of calls from fledgling business owners facing the prospect of their first civil litigation. Frequently, this takes place in the District Court Division – Small Claims, or Small Claims Court. Does one need a business lawyer for these types of smaller contract disputes? Well, Small Claims Court actions are a less formal proceeding. Generally, they are filed over specific claims (breach of contract, possession of property) for less than $5,000.00.

North Carolina law requires that corporations be represented by an attorney when they appear in court, except in the majority of small claims actions. Accordingly, it often does not make financial sense to obtain a lawyer for a short hearing over $5,000.00.

Two solutions for small claims court representation

I generally respond to small claims inquiries from business owners with two potential solutions. The first, involves having a firm like Maginnis Howard available on retainer. This is the best option for business owners who deal with frequent disputes over relatively small amounts of money. For example, vendors who deal with sales in volume. Having a lawyer on retainer involves a small monthly payment, so there are no surprises in legal fees. You’ll have a qualified legal representative standing by for any situations that arise.

The other solution is to let the individual take their chances in small claims court. Does this sound like a terrible idea? Well, not necessarily. So long as an appeal is announced in open court at the hearing or filed within 10 days of the judgment, the parties will have a de novo trial in District Court. De novo simply means that the process starts completely over; it’s as if the small claims proceeding never happened. Your attorney can then file a Motion for Repleading and Further Pleading. Once granted, this motion will force the other side to litigate this case just as if it had been filed in District Court in the first place. The thought of having to obtain and pay for their own lawyer is often enough to convince the other side to settle the matter without you having spent an enormous amount on legal fees.

We can help.

Is your business facing the prospect of small-claims civil litigation? Or facing the prospect of being the plaintiff in MANY small claims actions? Contact Maginnis Law, PLLC for a consultation on company’s best options in getting a cost-effective solution for your business’s smaller litigation issues. As your business grows, you’ll be much more prepared for the inevitable larger legal issues that unfortunately are likely to arise when your business is successful.

Maginnis Law, PLLC is a full-service business litigation law firm based in Raleigh, NC. Maginnis Law handles matters throughout the Wake County area, including Wake Forest, Rolesville, Youngsville, and Franklinton. Contact the firm at 919.526.0450 for an initial consultation or visit our website at www.maginnislaw.com