Effective July 1, 2011, the Wisconsin legislature raised the jurisdictional limit for actions that may be handled through the small claims court, from $5,000 to $10,000.
Previously, any cause of action for a money judgment greater than $5,000 against a person had to be filed before the circuit court, rather than the small claims court. Over the years, inflation raised the cost of living, but the jurisdictional limit remained at $5,000. As a result, a greater proportion of cases had to be filed in the circuit court. This had two negative effects.
1. Actions in circuit court are much more formalized, requiring more time, money and effort to proceed with a claim. Small claims court has a more relaxed set of procedural rules, which makes small claims court much more economical to utilize as a judicial tool whenever possible. Many cases that were more appropriate for the simplified procedures of small claims court had to go to circuit court instead.
2. Because of the higher costs associated with circuit court cases, people had the difficult choice of spending extra money to prosecute a relatively small claim through the circuit court, not prosecuting the claim at all, or bringing the claim in small claims court, but being limited to only recovering $5,000, when their case might be worth more. The decision on how to proceed was particularly difficult when the amount of a person’s claim was only slightly more than the $5,000 small claims limit. As a result, people were not filing valid causes of action, choosing to limit their recovery to $5,000 for the sake of speed and simplicity, or were forced to spend extra time and effort to recover on claims with low values, which defendants often used to their strategic advantage.
Now that the small claims court jurisdictional limit has been raised from $5,000 to $10,000, a substantially greater number of cases can be handled using the more efficient and convenient procedures of the small claims court. For example, small personal injury cases, which could easily accumulate $2,000 to $4,000 in medical bills, can often now be handled far more quickly. Small business disputes, claims by or against contractors, commercial landlord/tenancy cases, minor traffic accidents, and many other types of money judgment cases can now be filed using the simplified procedures of the small claims court, rather than the more complicated procedures for large claims court.
If you need an attorney to assist you with a money judgment case, please feel free to contact this office at 262.728.0700 to further discuss your circumstances.
This blog entry was prepared by Steven C. Harvey, partner, Wassel, Harvey & Schuk, LLP. It does not constitute legal advice, create an attorney-client relationship, or constitute legal authority.