Woodland Hills personal injury lawyer Barry P. Goldberg meets with hundreds of prospective clients who have questions whether it makes sense to hire a lawyer or “do it on your own.” Most often, the decision focuses on the amount in controversy. If the amount in dispute is $10,000, or less, a prospective client can usually slug through the system and obtain a decent result.
However, with more money at stake, most prospective clients are ill equipped to handle the matter on their own. Moreover, at that point, most prospective clients would rather pay a percentage to a law firm to handle communications with insurance companies and medical providers and eventually negotiate a fair settlement. As a rule, our office does not recommend that prospective clients handle their own litigation. If a lawsuit needs to be filed—you need an experienced lawyer—period.
On the other hand, for claims under $10,000, a prospective client may be well served to handle the matter in small claims court. In fact, in most cases, lawyers are not allowed! So, the procedures and demeanor are set up for a non-lawyer to be successful on their own. Small claims court is a special court where disputes are resolved quickly and inexpensively. The rules are simple and informal. Understanding the dollar limits can be confusing.
An individual cannot ask for more than $10,000 in any single claim. Businesses and other entities cannot ask for more than $5,000. This limit on businesses does not apply to sole proprietors, who are treated as natural persons. You can file as many claims as you want for up to $2,500 each. But you can only file 2 claims in a calendar year that ask for more than $2,500.
For auto accidents which include bodily injuries, there are some exceptions to the $10,000 limit for individuals. If you are filing a claim for bodily injuries as a result of a car accident against a person who has car insurance that includes a “duty to defend,” you can only sue that person for $7,500. That means that you are free to take an insured person to small claims court! Unfortunately, the maximum bodily injury recovery is limited to $7,500.
Often, our office will recommend that a prospective client proceed to small claims court even if the amount in controversy exceeds $7,500—-slightly. If the damages are say $9,000, you may choose to accept a reduction to the limit rather than pay a lawyer a third of the recovery. It is a simple business decision. There are some other limitations that involve guarantors that are not addressed in this article.
Check out our website with has an interactive infographic, with forms, for handling your own car accident case. Good luck!